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Central Excise - Case Laws
Showing 481 to 500 of 81910 Records
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2024 (12) TMI 346
Process amounting to manufacture or not - process of slitting and cutting jumbo paper rolls into smaller rolls - admissibility of CENVAT Credit availed by the appellants in both Unit-I and Unit-II - Applicability of Section 11D of the Central Excise Act, 1944 regarding the collection of excise duty.
Whether the appellant’s activity of slitting/cutting jumbo paper rolls into small paper rolls amounts to manufacture or not? - HELD THAT:- In this case, two units under the same management are involved and there is no dispute regarding the use of paper within Unit-I for slitting, lamination, printing and heat-sealing coating. Similarly, there is no dispute regarding process undertaken at Unit-II with regard to slitted paper and payment of duty thereon. Further, there is no dispute regarding process of heat-sealing coating at Unit-I after receipt from Unit-II, payment of duty from Unit-I and CENVAT Credit thereon.
The process of slitting of papers in the present case amounts to manufacture since the paper in Unit-II cannot be used in the form it is received from Unit-I because it is required to be slit to the required size to fit into the machines of Unit-II. Further, there is a substantial value addition of raw material and huge investments were made in plant and machinery for slitting and after the process of slitting and cutting is completed, a new and distinct product emerges to which the starting material is not capable of being put or used. It is also found that the Department has never raised any concerns regarding the duty paid on final slit paper.
Thus, it is a settled law that once duty on the final products has been accepted by the Department, CENVAT Credit is not deniable even if the activity does not amount to manufacture.
CENVAT Credit availed by the appellants in both Unit-I and Unit-II - HELD THAT:- Once the Department has accepted the duty of the final products and has not raised the objection, then in that case, the CENVAT Credit is not deniable even if the activity does not amount to manufacture in view of the various decisions relied upon the appellants.
Applicability of Section 11D of the Central Excise Act, 1944 regarding the collection of excise duty - HELD THAT:- The first condition to invoke Section 11D of the Central Excise Act, 1944 by the Department to demand is not applicable in present case because Section 11D is applicable on the person who is liable to pay duty under Central Excise Act, 1944, whereas in the present case, in the impugned order itself, it has been held that the appellants were not liable to pay duty on slitted paper, therefore, this condition is not satisfied. Second condition that Section 11D is applicable when a person has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under Central Excise Act, 1944; whereas, in the present matter, it is not a case that the appellants have collected any amount in excess of duty assessed or determined. Hence this condition is also not met. The third condition that Section 11D is applicable when the said person has collected amounts from the ‘buyer' of such goods; whereas, in the present case, there is no distinct seller and/or buyer. It is a case of stock transfer to Unit-II within the same entity and there is no sale and consequently there is no ‘buyer’ from whom amount has been collected representing excise duty. Therefore, this condition is also not satisfied. Accordingly, demand made under Section 11D of Central Excise Act, 1944 is liable to be dropped.
The impugned orders are not sustainable in law, therefore, set aside - appeal allowed.
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2024 (12) TMI 345
Determination of the Retail Price - Central Excise duty on the Retail Price declared on the goods less such abatement - goods were sold at prices higher than the Retail Price declared on the goods - HELD THAT:- It is seen that Rule 4 nowhere provides for adopting a MRP indicated in a Price List but requires ascertainment of the RSP which is either declared on identical goods removed within a period of one month or the RSP in the retail market at which the goods are actually sold at or about the time of removal of such goods from the place of manufacture. The said Price List relied upon in the notice, itself under Terms and Conditions, at Sr. No.7 mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch. The same therefore does not represent the actual retail price at which the goods are sold. Moreover, the requirement is to ascertain the actual RSP at or about the time of removal of the goods to be valued. Therefore, a Price list of Feb 2005 cannot in any event be uniformly applied through out the period from 2005 to 2009.
It is settled law as laid down in CCE v Bell Granito Ceramics Ltd [2008 (11) TMI 99 - CESTAT, AHMEDABAD], that there is no requirement under Section 4A that the MRP on each package of goods has to be identical. Accordingly, a manufacturer can affix different MRPs on different packages of the same kind of goods. If the MRP on a given package has to be rejected under Section 4A (4) and redetermined under Rule 4 of the said Rules of 2008, then with regard to every package, it would be necessary to ascertain the actual RSP in the retail market at or about the time of removal of the package in question. An MRP indicated in a Price list of Feb 2005, which itself mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch cannot be applied across the board for clearances made from 2005 to 2009.
It is further noticed that the Larger Bench of this tribunal in the case of Ocean Ceramics Ltd v CCE [2024 (1) TMI 1280 - CESTAT AHMEDABAD - LB], has held that in absence of the manner of ascertainment of RSP having being prescribed by Rules under Section 4A (4) for the period prior to 1-3-2008, it is not open to the adjudicating authority to ascertain the RSP for the period prior to 1-3-2008 and that the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008 notified with effect from 1-3-2008 cannot apply retrospectively for the period prior to 1-3-2008, in that view, we find that the demand for the period prior to 1-3-2008 based on the ascertainment done in the impugned Order-in-Original is in any way not tenable.
The impugned Order-In-Original cannot be sustained and is set aside - appeal allowed.
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2024 (12) TMI 344
Trading of the goods or manufacturing activity - Revenue contended that the Appellant had actually undertaken the manufacturing activity by themselves and created a network of job workers to create an impression that the goods were manufactured by job workers - entire case has been built upon by the department on the basis of the statements recorded from the job workers - invocation of extended period of limitation.
Whether the appellant-company is the manufacturer or the job worker, who has undertaken the activities as per the designs supplied by the Railways, on the raw materials supplied by the appellant, is the actual manufacturer?
HELD THAT:- It is observed that the activities such as quality testing, labelling/branding etc may or may not amounts to 'manufacture'. It depends upon the facts and circumstances of each case. However, before going into the question whether quality testing, labelling/branding etc amounts to manufacture or not it must be established that the appellant has actually undertaken such activities in their factory premises.
In the present case, it is observed that the appellant did not have any manufacturing facility in their premises; there was no machinery found during the course of search; no raw material or manufactured goods were found in the process of manufacturing at the time of search; there was no manpower employed by them for undertaking the manufacturing process; the monthly electricity charges of the factory was within Rs.4,000/- to Rs.5,000/- which evidences that no manufacturing activity was undertaken in the factory. Thus, we observe that the evidences available on record does not support the conclusion arrived at by the adjudicating authority that the appellant has undertaken some activity amounting to 'manufacture' in their premises.
The adjudicating authority has not produced any other evidence to substantiate the allegation that the appellant has actually carried out testing, branding etc in their premises. In the absence of any such evidence, it cannot be presumed that the appellant has undertaken these activities after receiving the goods from the job workers.
Further, it is observed that the levy of Central Excise Duty is on the activity of “manufacture”, but in the Show Cause Notice it is nowhere mentioned as to what item had been manufactured and as to what quantity of the goods had been manufactured by them. It is observed that without identification and quantification of the goods, the Show Cause Notice issued is ex-facie bad in law.
The evidence available on record does not indicate that the appellant has undertaken any of the activities amounting to 'manufacture' in their factory premises. Accordingly, the demand of central excise duty confirmed in the impugned order set aside. Since, the demand of duty is not sustainable, the question of demanding interest or imposing penalty on the appellant-company does not arise.
Invocation of extended period of limitation to demand central excise duty - HELD THAT:- Since, there is no suppression of facts with intention to evade the tax established in this case, raising the demand by invoking extended period of limitation again is legally not sustainable. It is found that this view has been held by the Hon’ble Supreme Court in the NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT] wherein it has been categorically held that once a demand has been raised for any issue by invoking the extended period of limitation, then another demand cannot be raised again by invoking the extended period on the same issue for a subsequent period - the demands confirmed in the impugned order by invoking the extended period of limitation is not sustainable.
Since there is no corroborative evidence brought on record by the respondent to substantiate the allegation that the Appellant are the actual manufacturers of the goods in question, it is held that the job workers are the actual manufacturers of the goods in this case, as has been claimed by the Appellant.
The demand of Central Excise duty from the Appellant-company is not sustainable in law. Since the demand itself is not sustainable, the question of demanding interest or imposing penalty on the Appellant-company under Section 11AC of the Central Excise Act, 1944 or under Rule 25(1)(c) of the Central Excise Rules, 2002 does not arise - the demand of interest and penalties imposed on the Appellant-company are set aside.
Penalty imposed on the Partner of the Appellant-company - HELD THAT:- Penalty has been imposed on the ground that the Partner played a role in the commission of the alleged offence. Since it is already held that the demand of duty on the activity undertaken by the Appellant is not sustainable, the role of the appellant in commission of the alleged offence is not established. Accordingly, the penalty imposed on the Partner viz. Shri Sudipta Dey under Rule 26(1) of the Central Excise Rules, 2002 is also set aside.
The demands confirmed in the impugned order are set aside and the appeals filed by both the Appellants are allowed
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2024 (12) TMI 343
Clandestine removal - improper accountal of excess stock - Recovery of CENVAT Credit with interest and penalty - HELD THAT:- Appellant 1 has through well devised mechanism by way of issuance documents in name of non existent firms namely,- M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M's Aamir Enterprises, was clandestinely clearing their finished goods to their customers located across the country in Maharastra, Karnataka etc. Against the goods cleared against invoices made in name of the fictitious companies they were receiving the payment in cash. Where they were clearing the goods on the invoices issued in their name they were receiving the payment by cheque.
Undisputedly the searches were conducted at various location including the factory premises of the Appellant 1, and various residential premises owned by them and their Directors i.e. Appellant 2 and Appellant 3. Searches were also conducted at the premises of the agent of transporter booking the consignments of appellant 1 and also at the premises of the transporter namely Ghatg Patil Transport Company.
The document issued in the name of fake entity were accompanied with the transport documents prepared by the Ghatge Patil Transport Company, and there were no transport documents in respect of the invoices issued in name of Appellant 1. Investigations revealed that the invoices were issued in the name of appellant were to cover up the transport of the goods to the godown of transporter and were taken back by the booking agent, Appellant 4 and from the transporter godown goods were transported on the documents issued in the name of fake company along with the transport documents prepared by the transporter M/s Ghatge Patil Transport Company.
It is evident that the all the threads necessary to establish the case of clandestine clearance have been investigated and interwoven to unearth the scheme of clandestine clearance adopted by the Appellant 1, Appellant 2, Appellant 3, Appellant 4, Appellant 5 and Appellant 6. Each of the appellant was fully aware of the scheme and was playing the role assigned to him. It is also interesting to note that appellant during the period even after search conducted in his premises on 11/12.04.2012, continued with his activity of clandestine clearance. The truck cleared from his premises on 17.04.2013 and intercepted by the officers clearly establishes that Appellants are habitual offenders - Transporter has admitted the factum of transport of the clandestinely cleared goods on the basis invoices of fictitious entities and the Customers of the appellant have admitted to the receipt of the clandestinely cleared goods and fact of making payment in cash against these goods. All these aspects on the basis of the evidences have been appropriately discussed in the impugned order.
It is settled position in law that once the facts have been admitted the same need not be proved/ established again.
Appellant had asked for the cross examination of the transporter. It is found that no statement of the transporter has been relied upon. Transporter was made co-noticee in the matter and he has specifically asserted in the reply to show cause notice dated 24.03.2015 that even no statement of any of representative is recorded to find out whether involved in the transaction knowingly.
The charges of clandestine clearance of the goods resulting into evasion of Central Excise Duty, upheld - Demands in respect of shortages detected at the time of search in the premises of the appellant and admitted by them. Demands in respect of clandestinely cleared goods to various customers and also admitted by the Appellant.
Imposition of penalty on the customers of the Appellant 1, transporter and others who have not filed any appeal - HELD THAT:- For imposing the penalty Commissioner has in the impugned order discussed the role of each individual separately and have concluded that each was part of conspiracy to evade payment of Central Excise Duty and defraud the exchequer. Appellants being habitual offenders the penalties imposed also do not appear to be on higher side and are upheld.
There are no merits in the submissions made by the appellants - appeal dismissed.
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2024 (12) TMI 274
Clandestine removal of goods - evasion of duty - shortage of 3500 Kgs of copper scrap - assessee had been receiving substantial quantity of copper scrap without any bills/documents and was not entering the details of sale in the statutory records - proof beyond doubt - preponderance of probabilities - HELD THAT:- In criminal cases, the standard of proof as required to prove the charges in a criminal trial is “proof beyond doubt”, whereas, the adjudication proceedings are in the nature of civil proceedings and not criminal proceedings and therefore, the standard of proof of civil proceedings i.e. preponderance of probability is applicable in adjudication proceedings.
It is equally well settled that in adjudication proceedings to establish the charge of clandestine removal and under valuation, Revenue is not required to prove the case with mathematical precision. Such charges are to be established on the basis of “preponderance of probabilities.” However, the conclusions to be drawn are necessarily to be logical and not on the basis of presumptions and assumptions. Suspicion, howsoever grave, cannot replace the test of proof.
The mere fact that the respondent agreed to deposit the duty amount to avoid any kind of litigation, itself cannot be held to be the basis for confirming the duty demand against the respondent. CESTAT found that the case of unaccounted manufacture and clearance was built upon only sketchy evidence without concrete corroboration and whatever evidences formed basis for the case of Revenue, fell short of the minimum requirement of credible case of clandestine removal - the CESTAT conducted a meticulous exercise to examine and appreciate the evidence on record in the light of settled principles and came to a categoric finding that the case of unaccounted manufacture and clearance was built on sketchy evidence without any concrete corroboration and whatever evidence formed basis of the case of the Revenue fell short of the minimum requirement of credible case of clandestine removal.
In the absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods from the premises of the respondent, we hold that the impugned order dated 08.06.2017 passed by the CESTAT does not suffer from any serious error and does not merit interference.
The appeal is therefore dismissed.
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2024 (12) TMI 273
Suppression of facts by the respondent to evade excise duty - Interpretation and applicability of N/N. 52/2002-CE and N/N. 8/2004-CE. - whether the Notification No. 8/2004-CE dated 21.01.2004 and the amended Notification, No. 28/2004-CE dated 09.07.2004, the whole of the duty of excise leviable on the finished product was exempt or the same was chargeable Nil rate of duty and thereby the Judgment of this Hon’ble Court is squarely applicable in the present case? - applicability of Extended period of limitation.
HELD THAT:- Here in the case at hand though substantial questions of law has been framed on the issue of exemption of excise duty or suppression of material facts before the assessing authorities looking the matter from the question of limitation or of any other technicalities, this Court feels that for whatever the reasons the inspecting or audit authorities who are supposed to conduct periodical/regular audits and inspections could have raised the demand and also issued show cause notice on yearly basis but not acting upon for years together and to the surprise of the respondent, notices are issued and demand is raised before a concern to this Court and a huge amount of excise duty is important.
This Court on the ground of technicalities and for certain laches committed by the department officials as pointed out by the respondent counsel is not inclined to decide the case in favour of the respondent. But keeping in mind, the quantum of excise duty and its ancillary duties which are in total of Rs. 98,03,22,312/- approx., this Court feels that the matter needs consideration as to where the things are properly attended or not.
This Court feels that it is a case to remand back the matter to the Commissioner of Central Excise, Morellow Compound M.G. Road, Shillong-793001 in the respective cases for reconsidering the issue of purchase of the ‘compound’ i.e. kimam and the records relating to the same and make an enquiry as to who is the supplier and in the event if the supplier has already paid the sufficient excess due, the same need not be collected earlier from the respondent herein - this Court is of the opinion that the issue of levy of excise duty and considering the exemption is concerned, an opportunity needs to be given for ascertaining whether any due has been already paid by the supplier and the same needs to be considered by the Commissioner of Central Excise, Morellow Compound M.G. Road, Shillong-793001.
Appeal disposed off by way of remand.
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2024 (12) TMI 272
Maintainability of appeal filed under Section 117 of the Central Goods and Service Tax Act, 2017 - Jurisdiction of the High Court versus the Supreme Court regarding appeals related to taxability of services rendered - appropriate forum - Interpretation of Section 35L of the Central Excise Act, 1944 - HELD THAT:- Under Section 117 of the Act of 2017, an appeal lies to the High Court against any order passed by the Appellate Tribunal and the appeal may be admitted by the High Court subject to there being satisfaction that the case involves substantial question of law. The definition of Appellate Tribunal is found under Section 2 (9) of the Act of 2017 which again refers to Section 109 of the same Act. Section 109 provides for constitution of Appellate Tribunal and Benches thereof by the Government to be known as Goods and Services Tax Appellate Tribunal for hearing appeals under the order passed by the Appellate Authority or the Revisional Authority. No material has been placed to show that an Appellate Tribunal had been constituted in terms of the said provision. There also cannot be any dispute to the fact that an appeal to this Court under Section 117 would have to be an order passed by the Appellate Tribunal under Section 113 of the Act of 2017.
It may be seen that apart from the orders passed by the High Court in an appeal filed under Section 35G or a reference under Section 35H, an appeal lies to the Supreme Court from any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. Further, for the purpose of determining any question having relation to the rate of duty, the determination of taxability or excisability of goods would be included for the purpose of assessment. As may be noticed, the core issue which requires determination in the instant case is as to whether the services rendered by the respondent is taxable.
Challenge made in COMMISSIONER, CENTRAL GOODS & SERVICES TAX, GUWAHATI VERSUS M/S OIL INDIA LIMITED [2023 (5) TMI 440 - GAUHATI HIGH COURT] was to the decision of CESTAT which held that the respondent-assessee was a seller and not a service provider and hence, in absence of service provider/service recipient relationship, there could not be any question of levy of service tax and therefore, the demand could not be sustained. Accordingly, the demand of service tax interest and penalty raised by the Adjudicating Authority and affirmed by the Appellate Authority was quashed and set aside.
Coming back to the present case, upon having an overall consideration of the issue raised including the grounds of appeal taken by the appellant, since the issue of taxability of the services rendered by the respondent is the issue to be decided and therefore, the same squarely falls within the purview of the Hon’ble Supreme Court under Section 35L of the Act of 1944.
The appeal is therefore dismissed with liberty to the appellant to avail the remedy as is available in law.
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2024 (12) TMI 271
Recovery of Cenvat Credit wrongly availed and utilized along with interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Sections 11A and 11AB of the Central Excise Act, 1944 and penalty - seeking demand of central excise duty in cash on the pet bottles on the ground that the appellant had cleared the goods captively during the period August, 2008 to May, 2010 - invocation of Extended period of limitation - HELD THAT:- The appellant was manufacturing pet bottles in their factory since August 2008 for captive consumption but was not paying the duty on the same and did not get the registration of the same; but in June 2010 they came to know that they are liable to pay duty and then informed the Department regarding the liability to pay duty and subsequently paid the duty for the period August, 2008 to June, 2010 out of the Cenvat Credit on inputs and capital goods and also paid the interest of Rs.8,84,585/- in cash and intimated the same to the Department vide their letters dated 13.06.2010 and 23.06.2010. The appellant also paid some amount as demanded by the Department along with interest which is not disputed.
When the appellant paid the duty along with interest voluntarily and the same was not disputed by the Department, then as per the provisions of sub-section (2B) of Section 11A of the Central Excise Act, 1944, there was no necessity to issue the Show Cause Notice - Department has wrongly relied on the provisions of Rule 8(3A) of the Central Excise Rules, 2002, because Rule 8(3A) is applicable in cases where assessees are otherwise paying duty but for certain reasons commit default in not paying duty by due date.
Also, the benefit of credit cannot be denied if subsequently duty is held to be payable on the final product.
Time Limitation - suppression of facts or not - HELD THAT:- In the present case, there is no suppression on the part of the appellant as the appellant voluntarily informed the Department vide their letter dated 17.06.2010 and subsequently paid the duty along with interest also; whereas the Show Cause Notice was issued after the expiry of more than two years which is time barred, because the ingredients for invoking the extended period of limitation do not exist in the present case.
Penalty under Rule 26 on Personal Penalty on Authorized Signatory (Individual) - HELD THAT:- Imposition of penalty is also bad in law because the ingredients for imposition of penalty under Rule 26 do not exist in the present case.
The impugned order is not sustainable in law, therefore the same is set aside by allowing both the appeals.
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2024 (12) TMI 270
Levy of Personal Penalty for aiding or abetting duty evasion - Denial of exemption admissibility of Notification No. 12/2012-CE (Sr. No. 108) dated 17.03.2012 in respect of the drugs - plea of the appellant is that the appellant’s product i.e. drugs covered under description No. (A) of the Sr. No. 108 of the table appended to the notification which does not carry condition as prescribed for description No. (v) - whether the same would fall under description (A) or (B) of Sr. No. 108 of Notification No. 12/2012-CUS? - Levy of penalty under Rule 26 of Central Excise Rules, 2012 - HELD THAT:- The drugs and bulk drugs are one and the same. Therefore, the company M/s. Sterlling Biotech Ltd was entitled for exemption Notification 12/2012-CUS entry Sr. No. 108 description (A) which does not involve any condition such as following the procedure of Central Excise (removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. Therefore, entire basis of the department that such procedure was not followed is not relevant. Since, the duty demand itself is not prima facie sustainable on the company, there is no question of imposing personal penalty on the employee of M/s. Sterlling Biotech Ltd. who is the appellant herein.
The issue involved is pure interpretation of the notification. The company M/s. Sterlling Biotech Ltd had been declaring the entire facts about the availment of the notification and declaring in their ER-1 return the product discretion, notification number, Sr. number of the entry. Therefore, there was no suppression of fact or mala fide either on the part of the company M/s. Sterlling Biotech Ltd or on the part of the present appellant. For this reason, also the penalty on the appellant is absolutely unsustainable. The appellant have relied upon the decision of S K Shah [2008 (7) TMI 433 - HIGH COURT OF GUJARAT AT AHMEDABAD] Hon’ble Gujarat High Court wherein on the issue of interpretation of notification personal penalty under Rule 26 was held to be not impossible.
The penalty imposed on the appellant under Rule 26 is not sustainable. Hence, same is set aside - Appeal is allowed.
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2024 (12) TMI 269
Determination of amount of duty under sub-section (10) of section 11A of the Central Excise Act beyond the period prescribed under sub-section (11) of section 11A of the Central Excise Act - admissibility of electronic evidence - section 36B of the Central Excise Act - provisions of section 9D of the Central Excise Act relating to relevance of statements under certain circumstances were not complied with - Violation of principles of natural justice.
HELD THAT:- The show cause notice, in the present case, was issued on 28.04.2015. It called upon the noticees to show cause within thirty days from the date of receipt of notice, failing which it was specifically provided that the matter would be adjudicated ex-parte without any further communication. It is seen that the period one year from 28.04.2015 expired on 27.04.2016. Even if cause was not shown by the noticees to the said notice, the Adjudicating Authority should have proceeded to decide the matter ex-parte, but what is seen is that the Adjudicating Authority even let this statutory time limit of one year pass without even adhering to the stipulation contained in the show cause notice that the matter would be decided ex-parte even if no cause is shown within thirty days. It appears that it is only on 07.09.2016 i.e. almost after a period of five months after the expiry of one year that the first hearing was fixed by the Adjudicating Authority on 07.09.2016 - There is absolutely no reason assigned in the written submissions or in the date and event chart as to why the cross-examination process continued for almost three years from 2018 upto 2021, when the adjudication itself was required to be completed within one year. Three dates for personal hearing were fixed in 2021 at an interval of almost one month and thereafter the show cause notice was adjudicated after nine months from the last date of personal hearing on 14.06.2022.
A clear statutory time limit of one year is provided in sub-section (11) of section 11A for the Adjudicating Authority to adjudicate the show cause notice but no reason has been given in the impugned order as to why it was not feasible or practicable for the Adjudicating Authority to adjudicate the show cause notice - The Adjudicating Authority has to record reasons in the order adjudicating the show cause notice and not leave it to the department to speculate why the Adjudicating Authority could not adhere to the time limit provided to it under a Statute to adjudicate the show cause notice.
The principles of natural justice do not admit of such delayed adjudication where time limit is fixed under a Statute to adjudicate the matter. The Adjudicating Authority cannot endlessly wait and has to utilize its discretion in a fair and reasonable manner so as to balance between the principles of natural justice and the time set out in the Statute for adjudication of the show cause notice. The show cause notice required the noticees to file a reply within thirty days, failing which it was mentioned that the matter would be adjudicated ex-parte.
The impugned order would have to be set aside only for the reason that the adjudication was not completed within the time limit prescribed under sub-section (11) of section 11A of the Central Excise Act.
The impugned orders would have to be set aside and are set aside - The appeals are, accordingly, allowed with consequential relief(s), if any to the appellant.
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2024 (12) TMI 222
Refund claim - rejection on the ground that the appellant failed to establish that they reversed cenvat credit availed on common inputs utilised in the manufacture of Sulphur recovery unit - sufficient documentary evidences were not produced - violation of unjust enrichment - HELD THAT:- The refund claim was filed by the appellant subsequent to the decision of this Tribunal in the case of IOC Ltd. [2002 (12) TMI 656 - CEGAT, NEW DELHI], whereby this Tribunal has observed that Sulphur being a by-product emerges during the course of manufacture of final product, cannot be subjected to Rule 6(3)(b) of the Cenvat Credit Rules, 2002 and erstwhile Rule 57CC / 57AD(2)(b) of the Central Excise Rules, 1944.
On rejection of the refund claim, the matter reached before this Tribunal and this Tribunal categorically held that refund is admissible to the appellant but remanded the matter to the adjudicating authority to examine the issue of unjust enrichment.
Both the authorities below have travelled beyond the scope of the remand order of the Tribunal and both authorities re-examined the admissibility of credit on merit whereas observation of the Tribunal on merit was that 8% of the value of the Sulphur a by-product cannot be collected, which presupposes that proportionate cenvat credit availed on inputs had been reversed; and facts on record revealed that the appellant had reversed credit of Rs.5,27,132/-. No argument was advanced by the Revenue before the Tribunal that the said reversal was not correct. The direction of the Tribunal was that the issue of unjust enrichment be examined before sanctioning the refund. Further, it is found that the refund relates to cenvat credit reversed / paid pursuant to Rule 6(3)(b) of the Cenvat Credit Rules, 2002 and Rule 57CC / 57AD(2)(b) of the Central Excise Rules, 1944 on the Sulphur emerged as by-product - the principles of unjust enrichment could not be made applicable for the payment made under Rule 6(3)(b) of the Cenvat Credit Rules, 2002 and Rule 57CC / 57AD(2)(b) of the Central Excise Rules, 1944.
Also on scrutiny of the relevant sample invoices for Sulphur for the period in dispute, it is noticed that the amount of 8% had not been recovered by the appellant from their customers. No contrary evidence has been referred to by the authorities below to rebut the said claim of the appellant.
The impugned order is set aside - Appeal allowed.
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2024 (12) TMI 221
Utilisation of CENVAT credit taken on the input service - admissible input services or not - insurance services provided in respect of ‘Mediclaim policy taken for parent of employees’ by the appellants - levy of penalty under Rule 15(1) of CENVAT Credit Rules, 2004 - HELD THAT:- On plain reading of the provisions of Rule 2(1)(ii) of CCR, 2004, input service means 'any service used by a provider of output service for providing an output service'. In other words, if any output service is provided, services procured for providing such output services will be treated as input service in terms of rule 2 (l)(ii) of CCR,2004. The facts of the case indicate that the appellants had availed the services from the insurance company M/s Bajaj Allianz General Insurance Co. Ltd. and further provided these services to their employees for a consideration inasmuch as the appellants recovered the insurance premium from their employees - In order to render the said services to the employees, the appellants had to use the services from insurance company. Therefore, the services availed by the appellants from insurance company i.e., M/s Bajaj Allianz General Insurance Co. Ltd. for providing the said service ought to be treated as 'input service' and accordingly, the appellants are eligible to avail CENVAT credit paid on such input service in terms of Rule 2 (l)(ii) of the CCR of 2004.
The aforesaid issues have been already dealt in detail by the Coordinate Bench of the Tribunal and the present dispute is no more res integra, in view of the decision relied upon by the appellants in the cases of M/S ULTRA TECH CEMENT LTD. VERSUS COMMISSIONER OF CENTRAL TAX – TIRUPATI - GST [2019 (9) TMI 888 - CESTAT HYDERABAD]. In this case and it has been held that the appellant is required to pay service tax as per the legal provision of Service Tax statute and is entitled to avail credit on input services on the relevant output services.
Further, in the cases of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [2020 (6) TMI 278 - CESTAT BANGALORE - LB], THE COMMISSIONER OF CENTRAL EXCISE SERVICE TAX & CUSTOMS, BANGALORE (ADJUDICATION) , THE COMMISSIONER OF SERVICE TAX VERSUS M/S. PNB METLIFE INDIA INSURANCE CO. LTD. [2015 (5) TMI 68 - KARNATAKA HIGH COURT], the issue in general whether there is a liability to service tax and whether the service tax paid on input service could be eligible to the appellant was decided in their favour in these cases.
In view of the settled position of law, the issue arising out of the present dispute is no more open for any debate and as such, the impugned order passed by the learned Commissioner (Appeals) is liable to be set aside - the impugned order dated 12.11.2021 is set aside - the appeal is allowed in favour of the appellants.
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2024 (12) TMI 220
Fraudulent passing on CENVAT credit of duty to various furnace units of Punjab on the strength of their forged excise duty paid invoices - fake purchase of duty paid excisable goods i.e. MS Scrap source manufacturing units/ dealers based in Chattisgarh and Odisha - denial of crossexamination - violation of principle of natural justice - HELD THAT:- The identical issue has been decided by the Hon’ble Punjab & Haryana High Court in the case of M/S JINDAL DRUGS PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND ANOTHER [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] as well as by this Tribunal in the case of M/S LAULS LIMITED, SHRI ABHAY GUPTA, DIRECTOR AND SHRI RAM BILAS BANSAL VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-IV, FARIDABAD, HARYANA [2023 (7) TMI 1113 - CESTAT CHANDIGARH] and M/S TIBREWALA INDUSTRIES (P) LIMITED, SHRI ANIL KUMAR TIBREWALA, DIRECTOR AND M/S R.K. TRADING COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ROHTAK [2023 (7) TMI 1112 - CESTAT CHANDIGARH] wherein it was held that the cross-examination of witnesses whose statements were relied upon by the Revenue to make out a case against the assessee has to be allowed and by following the ratio of the said decisions, the impugned order is not sustainable and therefore, the same is set aside and the cases remanded back to the Adjudicating Authority for a fresh decision after affording opportunity of cross-examination of the material witnesses and by following the procedure as prescribed in Section 9D of the Central Excise Act.
The appellants are directed to cooperate with the Adjudicating Authority for a speedy disposal of the case - both the appeals are allowed by way of remand.
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2024 (12) TMI 153
Refund of Cenvat Credit - whether, for the purpose of refund of Cenvat Credit under the Cenvat Credit Rules, 2004 supply of goods treated as “export” under the, The Special Economic Zones Act of 2005 (SEZ Act) can also be treated as export for the purposes of the Cenvat Credit Rules and Central Excise Rules, 2002? - HELD THAT:- Since the orders under challenge were passed prior to 2015, the original adjudicating and the appellate authorities did not have the benefit of the circular dated 28 April 2015, wherein it is clarified that, rebate of duty on goods cleared from Domestic Tariff Area to SEZ would be treated as export for the purposes of Cenvat Credit Rules and Central Excise Rules.
Therefore, in the interest of justice and by consent of both the parties the matter remanded back to the Appellate Authority to decide the issue afresh after considering the Circular dated 28 April 2015 and all the decisions which the parties wishes to rely upon.
Appeal disposed off.
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2024 (12) TMI 152
Recovery of Central Excise Duty with interest and penalty - Waiver of the amount of pre-deposit of Rs. 10 Crore for preferring an appeal before the CESTAT as provided under Section 35F of the Central Excise Act, 1944 - HELD THAT:- A bare perusal of Section 35F makes it clear that the petitioner is liable to make pre-deposit of Rs.10 Crores, being the minimum amount for filing an appeal before the CESTAT. This Court is, therefore, not required to examine whether there is any prima facie case in favour of the petitioner in view of the fact that after the insertion of Section 35F, no discretion whatsoever has been left for granting any waiver / reduction in the amount of pre-deposit for preferring an appeal. Therefore, this Court would not be in a position to grant waiver or to reduce the amount of pre-deposit for preferring an appeal on the ground of financial hardship as it would be contrary to the legislative intention. Moreover, this Court vide order dated 16.12.2021 has observed that the petitioner is precluded to make submissions on merits, hence, the submissions made qua prima facie case is required to be considered accordingly.
In the opinion of this Court, the petitioner has the alternative efficacious remedy of filing an appeal before the CESTAT and only on the ground that the petitioner is unable to make payment of the amount of pre-deposit, the impugned orders cannot be challenged before this Court in writ jurisdiction.
In the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA & ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED [2020 (5) TMI 149 - SUPREME COURT] while considering the maintainability of a writ petition where an alternative remedy is available, the Hon’ble Apex Court held that writ jurisdiction can certainly not be exercised when invoked to undermine or defeat the applicable statutory regime.
Whether a prima facie case, as canvassed by learned advocate for the petitioner, can be considered at this stage to grant waiver of the amount of pre-deposit, which is a pre-condition for preferring an appeal before the CESTAT? - HELD THAT:- The petitioner has relied upon the decision of the Hon’ble Jharkhand High Court in SRI SATYA NAND JHA, R/O STAFF QUARTERS, KENDRIYA VIDYALAY, VERSUS UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF FINANCE, NEW DELHI, CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, EASTERN ZONAL BENCH KOLKATA [2016 (7) TMI 1307 - JHARKHAND HIGH COURT], which has upheld the vires of Section 35F of the Central Excise Act, 1944 by referring to the concession made by the respondent authority that, in extreme cases, the assessee is not remedy-less and that it can prefer a writ petition. The Hon’ble Delhi High Court, while considering the aspect of wrong valuation has directed waiver of the amount of penalty in the case of MOHAMMED AKMAM UDDIN AHMED & ORS. VERSUS COMMISSIONER APPEALS CUSTOMS AND CENTRAL EXCISE & ORS. [2023 (5) TMI 23 - DELHI HIGH COURT] to grant an opportunity to the assessee to prefer an appeal. Whereas, the Hon’ble Allahabad High Court, in the case of M/S. SHUKLA & BROTHERS VERSUS CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL & OTHERS [2014 (12) TMI 1098 - ALLAHABAD HIGH COURT] has observed that the phrase “undue hardship” would also cover a case where the appellant has a strong prima facie case.
It appears that the petitioner, therefore, must satisfy this Court that he has a good prima facie case to the effect that he is likely to succeed in the appeal. In order to come to the conclusion that the petitioner would succeed in the appeal, having a good prima facie case, so as to grant waiver of the pre-condition of pre-deposit for filing the appeal, the petitioner is required to disclose a situation where he may be either subjected to gross injustice and / or misfortune or he is liable to excessive demand, contrary to the facts and evidence on record or the impugned orders are perverse, coupled with the fact that the conduct of the petitioner is blotless - Considering the facts of the case and the three tests which may be considered to arrive at a prima facie conclusion as to whether the petitioner has a prima facie case for waiver of the pre-deposit or not, it is required to examine the facts, which are recorded in the order-in-original.
Petition dismissed.
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2024 (12) TMI 151
Levy of excise duty on the transit loss up to 1% in Naphtha and ATF cleared during the relevant period meant for export - whether in view of the Notification No. 46/2001 dated 26.06.2001 read with Notification No. 17/2001 dated 04.09.2004 and Circular No. 581/2001 dated 29.6.2001 and Circular No. 804/2005 dated 04.01.2005 whether the petitioner is liable to pay excise duty on transit loss up to 1% in view of the Circular No. 261 dated 30.10.1985 issued by the CBEC? - HELD THAT:- From the findings arrived at by the revisional authority, it is clear that the revisional authority has ignored the existence of the Circular No. 46/2001 dated 26.06.2001 which is still in operation for the purpose of facility of removal of petroleum products without payment of duty for export warehousing, meaning thereby that as per Circular No. 46/2001, till the goods reached to the warehouse for the export purpose, the same would be treated as removal of petroleum products at the factory gate and the petitioner would be governed by the Circular No. 261 dated 30.10.1985 by which the petitioner is entitled to exemption from duty upto 1% of transit loss.
Reliance placed by the revisional authority on the clarification of the Circular No. 804/2005 is misplaced in the facts of the case as it pertains only to the storage loss in export warehouse/tanks whereas the petitioner has claimed the exemption from payment of excise duty on the transit loss till the products of the petitioner are stored in warehouse/tanks whether intermediate or at AFS including those with such mix-storage as per the Notification No. 261 dated 30.10.1985 which is taken into cognizance by the revisional authority in the order dated 14.02.1991 passed in the case of the petitioner.
Thus in view of the Notification No. 46/2001 not being disturbed by the CBEC read with Circular No. 261 dated 30.10.1985, the petitioner would be entitled to transit loss upto 1% for non payment of duty on the products transferred from the refinery/factory to the place of storage for the purpose of export only.
The impugned orders passed by the revisional authority cannot be sustained. The order passed by the Commissioner (Appeals) is restored to file and the demand raised in order-in-appeal regarding duty, interest and penalty is hereby quashed and set aside and all consequential orders are quashed and set aside - Petition allowed.
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2024 (12) TMI 150
Liability for duty payment on returned goods and subsequent re-manufacturing - suppression and mis-declaration of goods - recovery of entire amount of credit availed on the inputs - shortage of goods - HELD THAT:- It is noticed that the appellant at the time of first clearance of the impugned goods duly reversed the Cenvat credit that was availed by them and had issued proper tax invoices after debiting the duty on the said products. However, for whatever reasons when the goods were returned it is noticed that the appellant did inform the department in writing and subsequently has entered the said goods in their RG-23A Part-I and availed the credit in RG-23A Part-II register. These factual inputs are also part of the excise returns for the relevant periods and have been reflected in the monthly ER-1 Returns.
There is not a penny of merit in the department’s case on this pretext. Prima facie this is a case of frivolous litigation initiated at the behest of the department, which, ought to have been strictly eschewed in the first place as no case is apparently made out against the appellant having rendered the requisite information in ER-1 returns. So far as the shortage of stock of LDPE re-processed granules (3,000 kgs.) and calcium carbonate (7,950 kgs.) is concerned, the appellant in defence have submitted that the duty thereon for an amount of Rs.37,343/- has already been paid by them and they undertake to pay interest thereon.
Pursuant to the return of the goods the appellants successfully negotiated new customers for supplying the said material on which credit was availed is borne out from records. This aspect is provided in law in terms of Rule 16(2) of the Central Excise Rules and therefore cannot be faulted upon. The department having chosen to remain silent when the intimation dated 30.06.2008 upon return of the impugned goods was conveyed, it is not open for them to rake up the matter after almost 16-17 months - the said amount of Rs.11,24,760/- paid by the appellant on a charge of clandestine clearance made by the department is bereft of any valid reason thereto and cannot be sustained.
Thus, no case of imposition of penalty equal to the said amount under section 11AC of the Central Excise Act, 1944 is also made, in respect of the said amount.
Shortage of certain goods - HELD THAT:- In so far as shortage of certain goods noticed by the department during their visit on 11.06.2011 involving a duty amount of Rs.37,343/- is rightly payable by the assessee and has been reportedly paid. Nonetheless the appellant is also required to pay interest thereon and equivalent amount of penalty under section 11AC on the said amount of Rs.37,343/- - The appellant is directed to make good the amount of penalty and the amount of interest on the amount so upheld, within one month from the date of receipt of this order.
Appeal disposed off.
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2024 (12) TMI 149
CENVAT Credit - outward GTA service used in connection with clearance of excisable goods namely cement from their factory premises to buyer premises, in the fact that the cost of transportation was included in the assessable value on which central excise duty was discharged - HELD THAT:- The fact is not under dispute that the appellant have undertaken to deliver the goods at the customer’s premises. The freight charges of GTA on which cenvat credit was taken is included in the assessable value of the excisable goods. This is evident from the excise invoice raised by the appellant.
It is observed that the freight charges was not separately collected by the appellant, therefore, the same is deemed to be included in the assessable value on which the excise duty was paid. In this identical fact the issue in hand is covered by this Tribunal’s judgment in the case of Ultratech Cement Ltd [2019 (2) TMI 1487 - CESTAT AHMEDABAD] which was upheld by the Hon’ble Gujarat High Court in [2020 (3) TMI 1206 - GUJARAT HIGH COURT].
This issue was further considered by the Hon’ble High Court of Kerala in Central Excise Appeal No.17 of 2019 in the case of Transformers and Electricals Kerala Ltd vs. Commissioner of Central Tax and Central Excise Kochi/ Bangalore [2024 (10) TMI 623 - KERALA HIGH COURT], it was held that 'permitting the appellant to avail input tax credit in such circumstances would militate against the very Scheme of CENVAT credit, which is designed to avoid the cascading effect of tax and an ultimate burden on a consumer.'
The issue involved in the present case is no longer res-integra and accordingly the appellant are entitled for cenvat credit on outward GTA in the facts of the present case. Hence, the impugned orders are set aside - Appeal allowed.
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2024 (12) TMI 148
Dismissal of appeal for the reason that instead of filing the appeal within 60 days from the date of receipt of the order that was impugned in the appeal, the appeal was filed 3 days after the expiry of 60 days without even moving an application for condonation of delay - liability to pay central excise duty on the additional consideration collected a sales tax but not deposited with Government.
HELD THAT:- The scheme that is involved is the Rajasthan Investment Promotion Scheme, 2010 which deals with grant of subsidy, its quantum and the procedure for claiming it.
This issue, has been decided by this Tribunal in M/S HARIT POLYTECH PVT. LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & CGST- JAIPUR I, GANPATI PLASTFAB LTD., M/S APEX ALUMINIUM EXTRUSION PVT. LTD., M/S MAHA MAYAY STEELS, M/S. TIRUPATI BALAJI FURNACES PVT. LTD., M/S. TRANS ACNR SOLUTIONS PVT. LTD., M/S. FRYSTAL PET PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & CGST- ALWAR [2023 (3) TMI 1120 - CESTAT NEW DELHI] where it was held that 'The subsidy amount under the promotion policy does not affect the selling price of the goods.'
The matter was not examined on merits by the Commissioner (Appeals) as the appeal was dismissed only on the ground of being barred by time. As the issue on merits has been decided by the Tribunal, it is appropriate not to remand the matter to the Commissioner (Appeals) for passing a fresh order and have proceeded to decide the appeal on merits.
The impugned order dated 17.01.2020 passed by the Commissioner (Appeals) and the order dated 22.03.2019 passed by the Superintendent are, therefore, set aside - appeal is allowed.
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2024 (12) TMI 78
Maintainability of appeal - enhancement in the monetary limit for preferring appeal - HELD THAT:- Insofar as this Court is concerned, the monetary limit has been increased to Rs.5 crores.
Appellant states the amount under consideration for the present appeal is Rs. 3,30,81,801/- - In that view of the matter, he does not want to press the present appeals. The appeals are, accordingly, disposed of.
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