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Central Excise - Case Laws
Showing 61 to 80 of 81890 Records
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2025 (4) TMI 688
Activity amounting to manufacture - exemption under Notification No. 88/1988-C.E., dated 01.03.1988 - products repacked by the appellants qualify as 'Synthetic Detergents' or not - activity of repacking bulk goods into retail packages, with the addition of materials such as fragrances and colors - HELD THAT:- On perusal of the certificate dated 31.05.2012 furnished by the Chemical Examiner Gr.I, it is found that the said laboratory has confirmed the composition of the product as Organic Surface Active Agents, Fragrances and Additives. Since, those materials were used by the appellants in their factory while undertaking the activities of repacking of the purchased goods from bulk to retail packs, it is opined that they are confirming to the HSN explanatory notes, in order to fall within the scope and ambit of Chapter sub-heading 3402 90 as claimed by them.
Conclusion - Since, the products in dispute are confirming to ‘Synthetic Detergents’ as per the HSN explanatory notes, the benefit claimed by the appellants under Notification dated 01.03.1988 should be available to them for non-payment of Central Excise duty in respect of the clearances made by them to the Khadi and Village Industries.
The impugned orders, to the extent the adjudged demands are confirmed therein against the appellants are not sustainable and as such, are liable to be set aside - appeal allowed.
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2025 (4) TMI 631
Reversal of CENVAT Credit - requirement to pay 10%/5% of the value of the chilli seeds and chilli de-oiled cake/marigold during the relevant period from June 2007 to September 2011 - product chilli seeds and chilli de-oiled cake which emerged during the process of manufacture of the said Oleoresin were cleared by the appellant without payment of duty - failure to comply with provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - availment of inadmissible credit on Oleoresin paprika received in finished condition which are later exported - HELD THAT:- Undisputed facts are that the chilli seeds are emerged from the raw material i.e. raw chilli before being subjected to any process and the appellants do not use any input till the chilli seeds separated from the raw chilli, a claim not rebutted by the Department; thus they have not availed cenvat credit on any of the inputs in the manufacture of chilli seeds. Also, it is not in dispute that they have reversed Rs.98,640/- along with interest of Rs.38,977/- proportionate cenvat credit attributable to input services used in the generation of chilli seeds cleared without payment of duty. Also, it is not in dispute that the de-oiled cake is a by-product / waste and cleared without payment of duty. The learned Commissioner did not accept the reversal of credit solely on the ground that it was made on 11.05.2012 i.e. after period stipulated in the Finance Act, 2010. There are no merit in the said observation of the learned Commissioner inasmuch as the show-cause notice was issued to the appellant on 10.05.2012 and they have immediately reversed proportionate credit on 11.05.2012 attributable to the input services used in the manufacture of exempted product viz. chilli seeds. Further, it has been held in a number of cases that reversal of cenvat credit attributable to exempted goods would suffice compliance of Rule 6(3) of the CCR.
Reversal of cenvat credit on the de-oiled cake which emerged during the course of manufacture of Oleoresin - HELD THAT:- It is waste product; hence cenvat credit attributable to such waste are not required to be reversed in view of the principle of law laid down by the Tribunal and High Court in the case of Rallis India Ltd. Vs UOI [2008 (12) TMI 46 - HIGH COURT BOMBAY] and M.K. Agrotech (P) Ltd. [2006 (12) TMI 37 - CESTAT, BANGALORE].
Reversal of credit of Rs.3,15,028/- which has been received by the appellant in finished condition from M/s. Kancor Ingredients Ltd., Ernakulam and later exported under Rule 16 of the CCR, 2002 - HELD THAT:- The issue of reversal of credit of Rs.3,15,028/- which has been received by the appellant in finished condition from M/s. Kancor Ingredients Ltd., Ernakulam and later exported under Rule 16 of the CCR, 2002 also cannot be denied in view of the judgment of this Tribunal in the case of CCE, Ahmedabad Vs. Tapsheel Enterprises [2007 (5) TMI 97 - CESTAT, AHMEDABAD].
Conclusion - i) Reversal of proportionate cenvat credit attributable to exempted goods suffices compliance with Rule 6(3) of the CCR, 2004. ii) By-products or waste do not necessitate credit reversal under Rule 6(3). iii) Goods exported in finished condition do not require cenvat credit reversal under Rule 16 of the CCR, 2002.
The impugned order is set aside and the appeal is allowed.
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2025 (4) TMI 567
Violation of principles of natural justice - Appellant was not given an opportunity of personal hearing in the matter to record his submission as to question of jurisdiction - refund claim - HELD THAT:- The appeal was rejected on the ground that appellant was failed to file an appeal against earlier communication dated 22.09.2021 within the time stipulated under the Law. Appellant have given proper and satisfactory reason why he had not filed the appeal against the communication dated 22.09.2021 as stated in Memorandum of Appeal that “on receipt of communication from Central Tax, Gachibowli Division, Hyderabad, the appellant approached Jurisdictional Customs Authorities in relation to his refund claim, however, he was denied of filing any claim saying that the CVD and SAD duties are not customs components but clearly part of Cenvat duty”. It is also important that no any opportunity of hearing has been given by the Adjudicating Authority. It is a Statutory procedure that no application for a refund should be rejected without giving an opportunity to the appellant of being heard.
Hon’ble Supreme Court in M/s Nagarjuna Construction Company Vs Government of Andhra Pradesh and Others [2008 (10) TMI 686 - SUPREME COURT], in which Hon’ble Supreme Court held that natural justice is another name for common sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense liberal way. Justice is based substantially on natural ideals and human values.
Conclusion - The Adjudicating Authority passed the order without giving proper opportunity of hearing which is against the natural justice and procedure established by law. Learned Commissioner (Appeals) also not considered these facts therefore, appeal is liable to be allowed by way of remand with direction to decide refund claim on merit after giving proper opportunity to appellant.
Appeal allowed by way of remand.
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2025 (4) TMI 566
CENVAT Credit - input services - renting of motor vehicle - Repair and maintenance services relating to motor vehicle - life/medical or health insurance services extended to staff and personnel of CISF security - services of catering, health, travel - services of miscellaneous nature viz., removal of honey comb, removal of debris, disposal of canteen waste/medical waste, maintenance of garden & grass cutting etc., which are not related to manufacturing activities - levy of interet and penalty.
Medical/health insurance policy taken for their employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants - the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of ‘input service’ under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case.
The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - Reliance can be placed in the case of Honda Motorcycle & Scooter (I) Pvt. Ltd. Vs. Commissioner of C. Ex. Delhi-III [2016 (8) TMI 308 - CESTAT CHANDIGARH] - Service Tax paid on medical/health insurance services for an amount of Rs.35,42,452/- are eligible to be availed of Cenvat credit as per statutory provisions.
Security services provided by CISF - HELD THAT:- CISF has been tasked with providing security to all petroleum & oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential ‘input service’ required to be used in manufacture of petroleum products. Further, ‘security’ services have also been specifically provided in the inclusive part of the definition of ‘input service’ under Rule 2(l) ibid. Therefore, Service Tax paid on medical/health insurance services for CISF Security for an amount of Rs.10,06,493/- are eligible to be availed of as CENVAT credit.
Service tax paid on maintenance of gardens - HELD THAT:- In view of the mandatory nature of services that is required to be engaged by industry in carrying out their manufacturing activity, we find that the services engaged by the appellants in respect of maintenance of gardens, dry grass cutting in order to avoid fire hazard is found to be eligible input services. Therefore, Service Tax paid on such services for an amount of Rs.4,88,735/- are eligible to be availed of as CENVAT credit.
Service tax paid on the services of search of documents which are stored in safe custody for eight years - HELD THAT:- The services of underwater diving services used in the appellants refinery is also found to be an essential services inasmuch as these services are used for removing the debris from the sea, near the jetty pumps maintained for receipt of crude petroleum or other petroleum products, which are used in processing at their refinery plant. As these services are in the nature of routine repair and maintenance of operational equipment involved in the manufacturing process, these are covered as eligible input under Rule 2(l) ibid. Therefore, Service Tax paid on the above two services for an amount of Rs.2,842/- as discussed above are eligible to be availed of as CENVAT credit.
Outdoor catering services - HELD THAT:- The service is specifically excluded under clause (C) of Rule 2(l) ibid, it cannot be included in the eligible input services.
Maintenance and repair of asphalt road, removal of crushed stones etc. - bus service for travel of CISF security from Vashi to Bandra Station, in the city which is outside the refinery plant - maintenance of honeycomb - supply and erection of shamiana which is used for resting of contract workers during shutdown maintenance period - video imaging work, programme services in respect of various programs conducted for vendors and for discussion point with employees - HELD THAT:- There are no proper justification have been provided by the appellants for treating these services as input services, having direct or indirect connection with the manufacturing operations of the appellants. Hence, we do not find any reason to differ with the findings of the learned adjudicating authority, in rejecting the CENVAT credit taken as ineligible input service to the extent of an amount of Rs.9,03,065/- on the above services.
Service tax paid on insurance premium in respect of health/medical insurance of family members/dependents of the employees - HELD THAT:- The appellants have already reversed the ineligible CENVAT credit prior to the issue of SCN, on their own.
Levy of interest and penalty - HELD THAT:- There do not exist any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. In view of detailed discussions on individual input services, it is opined that for total amount of Rs. 50,40,522/- such services are found to be eligible for availing the service tax paid as CENVAT credit. Therefore, to this extent the impugned order is not legally sustainable.
Conclusion - The appellants are entitled to CENVAT credit for an amount of Rs. 50,40,522/- for services found to be eligible under the statutory provisions. The denial of CENVAT credit for services amounting to Rs.9,03,065/- partially upheld, which did not qualify as input services.
Appeal disposed off.
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2025 (4) TMI 565
Classification of goods - articles of silver jewellery/ articles of silver - to be classified under CETH 7113 or 7114? - applicability of benefit of exemption under Notification No. 12/2012 dated 17.03.2012 amended - demand of excise duty on goods exported - hedging amounts to trading of goods or not - availing ineligible credit in respect of renting of motor vehicles and repair and maintenance of motor vehicle - Time limitation.
Time Limitation - HELD THAT:- Since the demand is made for the period from 01.03.2016 to 30.06.2017 and Show Cause Notice (SCN) was issued on 03.01.2021, the issue regarding invoking the extended period of limitation is well settled as per the judgment of the Hon’ble Supreme Court in the matter of Continental Foundation Jt. Venture Vs. Commr. Of C. Ex., Chandigarh-I [2007 (8) TMI 11 - SUPREME COURT] wherein it is held 'it is evident that the intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word ‘wilful’, preceding the words “mis-statement or suppression of facts” which means with intent to evade duty. The next set of words ‘contravention of any of the provisions of this Act or Rules’ are again qualified by the immediately following words ‘with intent to evade payment of duty.’ Therefore, there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful.'
The dispute in the present appeal is regarding classification of the goods and appellant was filing ER-8 returns from time to time. Moreover the Appellant has not collected the excise duty from the customers on sale of the goods. All the transactions are duly accounted in the books of accounts and the same were audited by the Central Excise Audit team from time to time. Considering the Judgment of the Hon’ble Supreme Court in the matter of Continental Foundation Jt. Venture (supra) and Densons Pultretaknik, in the absence of any mis-statement or willful suppression of facts or contravention of any of the provisions of law with intent to evade payment of duty, there was no justifiable reason for invoking the extended period of limitation.
Classification of goods - articles of silver jewellery/ articles of silver - to be classified under CETH 7113 or 7114? - HELD THAT:- Central Excise Tariff Heading 7114 relates to Articles of goldsmiths' or silversmiths' wares and parts thereof, of precious metal or of metal clad with precious metal, of precious metal. The assessee is a reputed manufacture of such products and maintaining records over a period of time. As per the documents produced by the Appellant including the ER returns and the invoices, it is evident that when such goods are sold, the presence of precious stones is specifically mentioned in the invoices. Even as per the calculation made by the Adjudication authority, it is admitted that the Appellant were selling articles of silver jewellery and other articles of silver @ Rs.56 per gram at the relevant time and based on that turn over is assessed. There is no evidence to show that such goods are studded with Diamond, Ruby, Emerald or Safire. Facts being so, the goods manufactured by the appellant can be classifiable under CETH 7113 as declared by the appellant since there is no admissible evidence to prove that the impugned goods are studded with diamond, ruby, emerald or sapphire.
Whether the goods are falling under the category (I), (II) or (III) of 7113 as per Notification No. 26/2016-CE dated 26.07.2016? - HELD THAT:- As per the Notification No. 6/2017 dated 02.02.2017, condition No. 52A was introduced against the serial No. 199 of the Notification 12/2012, where the condition of not availing the cenvat credit of inputs or capital goods used in the manufacture of these goods is added with inputs or capital good or service tax on input services. Thus, appellant complied with condition No. 52A also since they have not availed cenvat credit of inputs or capital goods used in the manufacture of these goods and by reversing cenvat credit availed against service tax on input services used in the manufacture of these goods. Accordingly, they are entitled for claiming the benefit of 'nil' rate of duty for the period even after 02.02.2017 to 30.07.2017 as confirmed the impugned order.
Whether hedging amounts to trading of goods? - HELD THAT:- Hedging is a risk management strategy employed to offset losses in investment which is meant to reduce a potential loss. As per the Cambridge Dictionary Hedging means “A way of controlling or limiting a loss or risk”. There is no sale of gold with the bank based on forward selling contract has part of Hedging, thus there is no trading involved in Hedging. Moreover, SBI charges service tax for booking of forward contract, service tax is charged and collected from the appellant - following the ratio of the judgment of the Hon’ble Supreme Court in the matter of Sales Tax Officer, Pilibhit [1954 (5) TMI 17 - SUPREME COURT] and considering the facts and circumstances of the case including payment of service tax through SBI while Hedging activities are carried out by the Appellant, Hedging cannot be considered as trading. Thus, demand of Rs. 55,23,98,187/- under Section 11A (10) of the Act confirmed under Rule 6 (3) of the Cenvat Credit Rules, 2004 is also unsustainable since the appellant has complied with condition No. 52A by reversing the cenvat credit availed against service tax.
Ineligible credit in respect of renting of motor vehicle - HELD THAT:- As evident from Show cause notice (SCN) No. 01/2021-CE dated 18.02.2021 and Order dated 18.07.2024, the said demand is considered and dropped by Commissioner (Appeals) in separate proceedings. Facts being so, the said demand is unsustainable.
Conclusion - i) The goods are classifiable under CETH 7113, as there is no evidence to support classification under CETH 7114. ii) The appellant is entitled to the benefit of Notification No. 12/2012, as they complied with the conditions for exemption. iii) On the demand for excise duty on exports, it is held that the demand is unsustainable due to sufficient evidence of export provided by the appellant. iv) Concerning hedging, it does not constitute trading, and the related demand is unsustainable. v) On ineligible credit for renting motor vehicles, the previous decision to drop the demand upheld.
The Appeal is allowed.
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2025 (4) TMI 442
CENVAT Credit - Service Tax paid on health/medical insurance of employees, their dependents, retired employees, CISF security - credit taken on the basis of documents which are not proper - Group medical/health insurance policy taken for employees - Security services provided by CISF - extended period of limitation - penalty.
Eligibility to avail CENVAT credit on health/medical insurance service which were utilized by the appellants during the course of manufacture of petroleum products in their petroleum refinery at Mahul, Mumbai - input services or not - HELD THAT:- There is no dispute that the appellants are eligible to avail CENVAT credit. It can be seen from the factual matrix of the case that the said services were utilized by the appellants during the course of manufacture of petroleum products as the employees and CISF security personnel are essentially required in their manufacturing operations.
On careful reading of the definition of ‘input service’ under Rule 2 (l) of CCR, 2004, it is found that it provides for three categories of services, out of which the first category viz., (i) ‘means’ part of the definition, generally cover services which are used directly or indirectly, in or in relation to manufacture of final goods or for providing of output services; the second category viz., (ii) ‘inclusion’ part of the definition, specifically state certain services used in relation to various activities, which is used in relation to the manufacture of final products or provision of output services, both of which are covered under the scope of ‘input services’. Further, the third category, viz., (iii) ‘exclusion’ part of the definition provided under Clauses (A), (B), (BA) and (C), specifically provide for certain services or portion of such services, which are not included in the above definition of ‘input service’. However, there are certain exceptions to this exclusion which are also given in the form of ‘except for provision of certain services’, ‘except when used by certain category of persons’, ‘when such services are not primarily used for specified use’ etc. Therefore, in order to come to the conclusion that a particular service is covered as ‘input service’, either it could be covered under category (i) or (ii) of the definition of input service as explained above, and such input service should not fall under the exclusion clauses mentioned in the third category (iii) above.
Group medical/health insurance policy taken for employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants. The insurance coverage under sample copies of the insurance policy produced by the appellants dated 01.04.2011 & 01.04.2012 given by the insurer M/s New India Assurance Company Limited perused, wherein it is seen that the insured is the appellants company M/s Hindustan Petroleum Company Limited itself. Therefore, it is evident that the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of ‘input service’ under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case.
The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - relaince can be placed in M/S. HONDA MOTORCYCLE & SCOOTER INDIA PVT. LTD. VERSUS CCE, DELHI-III [2016 (8) TMI 308 - CESTAT CHANDIGARH].
Security services provided by CISF - HELD THAT:- The CISF has been tasked with providing security to all petroleum & oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential ‘input service’ required to be used in manufacture of petroleum products. Further, ‘security’ services have also been specifically provided in the inclusive part of the definition of ‘input service’ under Rule 2(l) ibid. Therefore, Service Tax paid on medical/health insurance services for CISF Security are eligible to be availed of as CENVAT credit.
The Service Tax paid on medical/health insurance services for an amount of Rs.2,04,63,415/- are eligible for availing CENVAT credit as per statutory provisions. Therefore, to this extent the impugned order is not legally sustainable.
Penalty - HELD THAT:- In view of the specific findings given by the learned Commissioner in the impugned order that the disputed amount in respect of ineligible CENVAT credit with respect to health/medical insurance claim of dependant family members of employees having been paid and appropriated, it is not found that there exists any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order.
Invocation of extended period of limitation - HELD THAT:- The Hon’ble Supreme Court in the case of Bharat Petroleum Corporation Limited Vs. Commissioner of Central Excise, Nashik Commissionerate [2025 (1) TMI 989 - SUPREME COURT] have held that extended period is not invokable in the case, where the document/details alleged to have been suppressed were known to the department.
Conclusion - i) CENVAT credit on health/medical insurance services for employees and CISF security personnel is admissible, as these services are necessary for statutory compliance and integral to manufacturing operations. ii) The documentation used by the appellants for claiming CENVAT credit is valid, and the provisional nature of some documents do not affect their admissibility. iii) The penalty imposed for alleged irregular availment of CENVAT credit is unwarranted, given the voluntary reversal of credit by the appellants. iv) The invocation of the extended period for demand is unjustified, as the department was previously aware of the relevant facts.
Appeal disposed off.
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2025 (4) TMI 441
Clandestine removal of finished goods without payment of central excise duty and without issue of valid invoices - shortage of the finished goods and raw material found during the course of physical verification - reliability of statements without following the procedure contemplated in section 9D of the Central Excise Act relating to relevancy of statements under certain circumstances
Whether such statements could have been considered as relevant and relied upon without following the procedure contemplated in section 9D of the Central Excise Act relating to relevancy of statements under certain circumstances? - HELD THAT:- In Additional Director General (Adjudication) vs. Its My Name Pvt. Ltd. [2020 (6) TMI 72 - DELHI HIGH COURT], the Delhi High Court examined the provisions of sections 108 and 138B of the Customs Act. The department placed reliance upon the statements recorded under section 108 of the Customs Act. The Delhi High Court held that the procedure contemplated under section 138B(1)(b) has to be followed before the statements recorded under section 108 of the Customs Act can be considered as relevant.
In Drolia Electrosteel [2023 (11) TMI 10 - CESTAT NEW DELHI], a Division Bench of the Tribunal examined the provisions of section 9D of the Central Excise Act and after placing reliance upon the decision of the Punjab and Haryana High Court in Jindal Drugs [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT], observed that if the mandatory provisions of section 9D(1)(b) of the Central Excise Act are not followed, the statements cannot be used as evidence in proceedings under Central Excise Act.
Thus, both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons - The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the Central Excise Act or under section 108 of the Customs Act. The Courts have also explained the rationale behind the precautions contained in the two sections. It has been observed that the statements recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such statements can be admitted in evidence.
The confirmation of demand of central excise duty to the extent of Rs. 3,04,24,623/- is based on the statements of persons who were not examined by the department before the adjudicating authority. This examination was absolutely necessary in terms of the provisions of section 9D of the Central Excise Act. In the absence of examination of such persons before the adjudicating authority and in the absence of admission of such statements in evidence, such statements would not be relevant. For the reasons stated above, the said demand would have to be set aside.
Demand based on loose papers recovered from the factory premises of the appellant - HELD THAT:- In the present case, the alleged authors of the loose papers were not examined. The demand of Rs. 1,76,650/- based on loose papers recovered from the factory premises of the appellant, therefore, cannot be sustained and deserves to be set aside.
Demand based solely on shortage of stock - absence of corroborative evidence - HELD THAT:- Reference can be made to the judgment of the Punjab and Haryana High Court in Anand Founders & Engineers [2015 (11) TMI 1166 - PUNJAB & HARYANA HIGH COURT] where it was held that 'Further, it was held by the Tribunal that mere shortages detected at the time of visit of the officers cannot ipso facto lead to the allegations and findings of clandestine removal.'
What also needs to be noticed is that an inference regarding clandestine removal can be drawn only after detailed investigation and consideration of relevant incriminating material which could be based on the stock of raw material, finished product, use of consumption of electricity, employment of labour and many other relevant materials as has been noticed by the Chhattisgarh High Court in Hi Tech Abrasives [2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT].
The impugned order dated 09.06.2020 passed by the Principal Commissioner in so far is it confirms the demand with interest and penalty cannot be sustained and would have to be set aside.
Conclusion - i) The confirmation of demand of central excise duty to the extent of Rs. 3,04,24,623/- is based on the statements of persons who were not examined by the department before the adjudicating authority. This examination was absolutely necessary in terms of the provisions of section 9D of the Central Excise Act. In the absence of examination of such persons before the adjudicating authority and in the absence of admission of such statements in evidence, such statements would not be relevant. ii) The demand of Rs. 1,76,650/- based on loose papers recovered from the factory premises of the appellant, cannot be sustained and deserves to be set aside, as alleged authors of loose papers were not examined. iii) Mere shortages detected at the time of visit of the officers cannot ipso facto lead to the allegations and findings of clandestine removal. iv) Demand with interest and penalty set aside.
Appeal allowed.
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2025 (4) TMI 369
CENVAT Credit for the capital goods used in establishing a captive power plant of the respondent - delay in adjudication of SCN - HELD THAT:- It is a settled legal proposition that, the Revenue cannot improve their case beyond what has been shown in their show cause notices. Umpteen number of decisions have been rendered that, the Revenue must confine with the content of the show cause notice, as the show cause notice is the basis, based on which only adjudication process has to go on and to be decided.
The Adjudicating Authority in the case of M/s.EID Parry (India) Ltd., has stated that the User Test theory propounded by the Hon'ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills Ltd., [2010 (7) TMI 12 - SUPREME COURT] to satisfy that the materials, components have been used in the captive power plant was applied and therefore the Adjudicating Authority before whom infact, the Jurisdiction Range Officer had filed Verification Report dated 31.03.2023 after conducting the verification and inspection by the Chartered Engineer and thereafter, has allowed the case of the M/s.EID Parry (India) Ltd.
Even in Jawahar Mills Ltd. [2001 (7) TMI 118 - SUPREME COURT], case, this kind of User Test Principle by requiring a User Test Certificate as a mandatory one before the Adjudication has not been propounded. What is the case of the Revenue right from the beginning is the matter. As the case of the Revenue should emanate from the show cause notice, where what was the stand that has been taken by the Revenue, that shall be taken into account. The case of the Revenue all through has been whether the goods utilised or used by the assessee are the capital goods or not and if they are capital goods, whether the assessee would be entitled to avail the CENVAT Credit or not are the only question to be answered by the Adjudicating Authority in every such case - Therefore based on the facts that has been emanated from the show cause notice, which are the basic content of the Revenue, applying the principle of Jawahar Mills Ltd., case that would not advance the case of the Revenue, instead that would advance the case of the assessee.
The show cause notice dated 16.06.2009 having been perused, the relevant portions have already been extracted herein above, where it is the definite case of the Revenue that, the assessee had set up a co-generation plant in their factory premises. During the course of audit of the records and accounts maintained by the assessee, it was noticed that they have availed CENVAT Credit on capital goods used in co-generation plant as detailed below. By stating this, eight items have been mentioned as capital goods, which had been used in co-generation plant.
The only reason for issuing these show cause notices by the Revenue is that, in the co-generation plant capital goods were used, for which CENVAT Credit was availed, however the co-generation plant generates electricity, which is an exempted product - merely because in respect of some other assessees, such a User Test Certificate was sought for or produced voluntarily or the User Test Theory has been adopted by the Adjudicating Authority, in each and every case, such an User Test Theory need not be adopted, as that kind of proposition has not been propounded in those two cases, i.e., in Jawahar Mills Ltd., case and Rajasthan Spinning and Weaving Mills Ltd., case.
There are no hesitation to hold that, apart from the reason that has been given by the learned Judge, for the reasons and discussions herein above made, the show cause notices which were under challenge before the writ court cannot be adjudicated merely on the ground that the User Test Certificate has not been produced by the assessee.
Conclusion - i) The Revenue's case must be clearly articulated in the show cause notices and cannot be expanded during adjudication. ii) The show cause notices could not be sustained for adjudication on the basis of the reasons originally cited by the Revenue.
All these writ appeals are failed, therefore they are liable to be dismissed. As a result of which, all these writ appeals are dismissed.
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2025 (4) TMI 368
Classification of goods supplied to the Indian Railways - major items manufactured are brake systems, HVAC, couplers, doors, pantographs etc. - to be classified under Chapter 86 or under chapters 84, 85 etc.? - Extended period of limitation - interest - penalty - the classification of pantographs and its parts under CTH 86079990 was upheld - HELD THAT:- There is no reason to interfere with the impugned judgment and order. The appeal is accordingly dismissed.
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2025 (4) TMI 367
Time limitation for filing SCN - four years taken to complete the investigation - Clandestime removal of raw materials - existence of evidence to uphold the demand, present or not - demand based on assumptions and presumptions - Section 11A(11) of the Central Excise Act, 1944 - HELD THAT:- It is found that in the impugned case, central excise officers visited the premises of the appellants on 19.11.2011 and they have taken around 04 years to complete the investigation and issued a show cause notice on 17.06.2016 on the alleged excess/ shortage found during the physical stock taking. They have further taken some time to issue a corrigendum dated 02.03.2017 alleging that the appellants have clandestinely removed the raw materials on which CENVAT credit was taken. The show cause notice, demanding the CENVAT credit has been issued, on the basis of a calculation shown in the show cause notice. Apparently, the due allowance was not given, to the manufacturing losses and input contained in work in progress, as contended by the appellants. This is not the correct manner to arrive at the quantity of raw material alleged to have been clandestinely removed.
Moreover, it is found that having alleged clandestine removal of raw material, Revenue has not questioned any of the transporters or buyer to establish that there was a clandestine removal of raw material. The clandestine removal cannot be established with a mathematical precision. At the same time, the clandestine removal cannot be alleged only on the basis of a mathematical formula or arithmetic calculation. Any such allegation needs to be termed as assumption/ presumption or conjecture/ surmise. It cannot be evidence in itself to uphold the alleged demand.
The coordinate Bench of the Tribunal, in the matter of Nova Petrochemicals v. CCE, Ahmedabad-II [2013 (11) TMI 626 - CESTAT AHMEDABAD] has held that 'There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions.'
Conclusion - There is considerable force in the submission of the appellants on legal issues that the show cause Notice is barred by limitation and the adjudication order was issued beyond the time period specified under Section 11A(11) of the Central Excise, Act, 1944. However, the appellants have a strong case on merits and as such other issues are required to be considered.
Appeal allowed.
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2025 (4) TMI 366
CENVAT credit on the Clean Energy Cess (CEC) paid on coal, both imported and indigenously procured, during the period from September 2014 to June 2017, availed beyond time limit of more than one year - HELD THAT:- The learned Commissioner referring to various provisions of CEC and the Notifications issued relating to CEC with effect from 01.07.2010 reasoned that since CEC is not among the specified duties and excise available to credit mentioned under Rule 3(1) of CCR, 2004 notified under Section 37 of the Central Excise Act, 1994, therefore, cenvat credit on CEC is inadmissible. The appellant, on the other hand, heavily relied on the judgment in the case of Shree Renuka Sugars case [2014 (1) TMI 1469 - KARNATAKA HIGH COURT] in which the Hon’ble High Court of Karnataka allowed cenvat credit on sugar cess.The said judgment of the Hon’ble High Court has been distinguished by the Tribunal in Deccan Cements Ltd. [2019 (7) TMI 764 - CESTAT HYDERABAD] and held that the sugar cess and CEC stands on a different footing, therefore, the judgment of the Hon’ble High Court of Karnataka cannot be made applicable to CEC.
The learned Commissioner has already dropped levy of interest and as far as penalty is concerned following judgment in Deccan Cements Ltd, no penalty is imposable since the issue involved is interpretation of law. Consequently, the impugned order is modified to the extent of confirming the demand of cenvat credit on CEC and penalty imposed is set aside.
Conclusion - The denial of cenvat credit on Clean Energy Cess, emphasizing the strict interpretation of Rule 3 of CCR, 2004 upheld.
Appeal disposed off.
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2025 (4) TMI 365
Clandestine removal - shortage of finished goods - existence of corroborative evidence or not - absence of adverse materials in support of the charge of clandestine removal - interest ad penalties - Imposition of Personal penalty on Managing Director of the appellant company, under Rule 25 of Central Excise Rules, 2002.
Demand of Central excise duty of Rs. 6,60,030/- confirmed based on the purported computer printout "Sales Ledger A/c" - HELD THAT:- It is found that during the course of the same investigation, proceedings were also initiated against the sister concern Vinayak Agro Industries, based on the same documentary evidences. The proceedings initiated against the sister concern relating to the issue of clandestine removal has been already settled by this Tribunal in favour of the sister-concern - As the demand of central excise duty on the allegation of clandestine removal has been set aside against the sister concern, the demands of central excise duty confirmed on the allegation of clandestine removal of the goods against the appellant company on the basis of the same evidences also does not survive. Accordingly, the demand confirmed in the impugned order on this count set aside.
Demand of Rs. 2,07,803/- confirmed on account of the shortage of 46.359 MT of finished products (MS Flats/Squares/Rods) allegedly detected during physical verification - HELD THAT:- The shortage of stock is on account of the differential methodologies of accounting adopted while recording the same in its books of accounts. The stock in books was maintained on the basis of average weight per piece of the finished goods, while the physical stock was taken on actual weight basis. This discrepancy is entirely normal and expected in the steel industry, where each piece of MS Ingot naturally varies in weight due to manufacturing tolerances. In his statements dated 03.08.2012 and 03.07.2013, the Appellant No. 2 explained that the Appellant no. 1 maintains the Daily Stock Register on the basis of weight per piece of the finished goods, which generally varies from piece to piece. This might have caused the apparent difference between the actual physical stock and the stock recorded in the Daily Stock Register. Thus, the same cannot be held to be due to clandestine removal of goods.
Reliance in this regard is placed on the ruling in the case of Commissioner v. Prem Industries [2007 (3) TMI 649 - CESTAT, AHMEDABAD]. It is also found that Appellant No. 2 never admitted to having removed any finished products clandestinely. Thus, the alleged shortage represents a mere accounting discrepancy, not evidence of clandestine removal.
The charge of clandestine manufacture and clearance is a serious charge, which is required to be established with positive/affirmative/tangible evidence and the burden of establishing the said charge lies heavily upon the revenue. Further, no demand of clandestine manufacture and clearance can be confirmed purely on conjectures, surmises, assumptions and presumptions. In the present case, the Appellate Authority has upheld allegations of clandestine removal without any corroborative evidence. There has been no seizure of unaccounted goods or interception of consignments cleared without payment of duty. The department has failed to present any affirmative evidence, such as records indicating unaccounted procurement of raw materials, excess production, or unrecorded sales, to substantiate its claims. Furthermore, the investigating agencies have made no effort to establish the existence of unaccounted manufacturing activities - the finding relating to clandestine removal by the Appellant no. 1 is grossly untenable and liable to be set aside. Accordingly, the demand of Central Excise duty of Rs. 2,07,803/- confirmed in the impugned order on account of the shortage of 46.359 MT of finished products set aside.
Interest and penalties - HELD THAT:- Since, the demand of central excise duty against the appellant is not sustained, the question of demanding interest and imposing penalties against appellant no.1 does not arise.
Imposition of Personal penalty on Managing Director of the appellant company, under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- The allegation of clandestine clearance against the appellant company is not sustained. Accordingly, I hold that the role of the appellant in the alleged offence of clandestine removal is not established. Thus, there is no material evidence available on record to implicate the appellant no. 2 in the alleged offence. Thus, the penalty imposed on the appellant no.2 set aside.
Conclusion - i) The demands based on pen drive data are not sustainable as the printouts were not obtained in compliance with mandatory conditions. ii) The shortage of stock was due to accounting discrepancies, not clandestine removal. iii) Since the demand of central excise duty was not sustained, the question of demanding interest and imposing penalties do not arise. iv) The personal penalty on the Managing Director also set aside as the allegation of clandestine clearance was not established.
The impugned order set aside - appeal allowed.
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2025 (4) TMI 364
Area Based Exemption - Eligibility for exemption under N/N. 50/2003-CE dated 10.06.2003 - goods manufactured and cleared from the factory of the appellant situated at 7 KM Stone, Muradabad Road, Kashipur - HELD THAT:- The order passed by the Tribunal shows that it was the adjudicating authority that had to visit the factory and decide the issue denovo. On record is an application dated 12.09.2018 submitted by the appellant which clearly mentions that the impugned order dated 20.03.2018 was passed by the Commissioner in contravention of the direction issued by the Tribunal and that too without affording any opportunity to the appellant. It also mentions that the adjudicating authority has relied upon a document which was neither a part of the show cause notice nor part of the earlier proceedings and no response was invited from the appellant. No reliance can, therefore, be placed on these two documents, which in fact are the sole document on the basis of which the Commissioner has recorded a finding that manufacturing activity is being carried out in Khasra No. 281.
The Tribunal, in the order dated 31.01.2017, had clearly held that if no manufacturing activity was carried out in Khasra No. 281, the department would have no case. From a perusal of the layout plan and the report dated 20.01.2010 submitted by the lekhpal, it is clear that no manufacturing activity was carried out in Khasra No. 281. The layout plan, in fact, clearly shows that the manufacturing activity was carried out only in Khasra No. 284. Khasra No. 281 admeasures 290 Meters in length and 2.53 Meters in width. It has a boundary wall and according to the appellant only a sewer line for extermination of sewage from the factory passes through Khasra No. 281. It also has a small pit for treatment of the sewage before it is discharged in a government drain located in the said Khasra. No manufacturing activity, therefore, can be said to have been carried out in Khasra No. 281.
The area of Khasra No. 281 is about 7% of the total area of the area covered by the Khasra No’s. 281, 282, 283 and 284. The Exemption Notification is a beneficial notification for promoting manufacturing activity in the backward area of the State of Uttrakhand. Merely because Khasra No. 281 measuring 0.146 Hectares is not mentioned in Annexure-II of the Exemption Notification, which in fact includes Khasra No’s. 282, 283 and 284, should not result in denying the benefit of the Exemption Notification to the appellant, when no manufacturing activity is taking place in Khasra No. 281.
It transpires from the decisions of the Tribunal in Forbes & Company [2017 (10) TMI 73 - CESTAT ALLAHABAD] and Saral Wire Craft [2017 (7) TMI 1479 - CESTAT NEW DELHI] that where production is carried in a majority portion covered by the Exemption Notification, the assessee would be entitled to the benefit of the Exemption Notification. The decisions also hold that it is not necessary that every inch of the land should be utilized for installation of the machines for there can be some open area. In such cases, the benefit of area based exemption should not be denied when the plots are adjacent.
Conclusion - No reliance can, therefore, be placed on these two documents, which in fact are the sole document on the basis of which the Commissioner has recorded a finding that manufacturing activity is being carried out in Khasra No. 281. The appellant is entitled to the exemption.
Appeal allowed.
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2025 (4) TMI 363
Classification of coconut oil manufactured by the appellant - to be classified under Chapter 33 as hair oil suitable for use as cosmetics or under Chapter 15 as edible oil? - exemption under Serial No. 9 of N/N. 3/2006-CE dated 01.03.2006 - HELD THAT:- Some of the admitted facts, as apparent from record and also not disputed by the Revenue are that the manufacturing process involved for making coconut oil from copra is a manufacturing process. That, there is no chemical treatment involved or addition of any additives etc., in the impugned oil. It is also on record as apparent from the Test Report that no additives were added which could have made such oil suitable for use as cosmetics. It is also noted that in their reply to the Adjudicating Authority at Para 20 of the Order-in-Original, the appellant made a submission that the Chapter Note 3 to Chapter 33 is not applicable since they are not putting any special labels or remarks stating it as a hair oil and in fact they are mentioning that it is an edible oil and are also mentioning the nutritional value on the bottle.
Neither the product was subjected to any chemical treatment nor was sold as hair oil and is simply a refined coconut oil not chemically modified. It is also clear that it was never shown as intended for any cosmetic purpose, which is an essential ingredient for invoking under Chapter 3 of Chapter 33 read with the provisions in the General Notes of HSN in the Chapter Heading 3303 to 3307, which clearly makes that for it’s coverage under such chapter headings, the packaging has to be of a kind sold to consumer and put up with labels, literature or other indications to the extent that they are for use as perfumery, cosmetic or toilet preparations, or as room deodorisers: or put up in a form clearly specialised to such use (e.g. nail varnish put up in small bottled furnished with the brush required for applying the varnish).
Since, the order of the Commissioner is not sustainable on merit itself, there is no question of imposition of penalty under Rule 25 and accordingly, the appeal of the Revenue is also bound to fail and is accordingly, dismissed.
Conclusion - The product is correctly classified under Heading 1513.11, leading to the allowance of the appellant's appeal.
Appeal allowed.
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2025 (4) TMI 362
Recovery of self-credit availed by the appellants in terms of the Notification No.56/2002-CE dated 14.11.2002, in terms of Section 11A of the Central Excise Act, 1944 - erroneous refund in the absence of any order in review of the original orders passed ratifying the self-credit taken by the appellants - overstating of production in order to avail excess credit in cash - availment of CENVAT credit only on the strength of invoices wherein no goods have been physically received by the appellants - imposition of penalty on Senior Manager of the appellant No.1 - levy of penalty on juridical persons under Rule 26 of Central Excise Rules, 2002.
Whether the self-credit availed by the appellants in terms of the N/N. 56/2002-CE dated 14.11.2002 can be recovered in terms of Section 11A of the Central Excise Act, 1944? - HELD THAT:- In the facts and circumstances of the case, where refund has been availed as self-credit and when proper officer has ratified such refunds after due examination, this Bench and the Jurisdictional Hon'ble High Court J&K held, relying on the decision of Hon’ble High Court of Guwahati in the case of Jellapore Tea Estate [2011 (3) TMI 11 - GAUHATI HIGH COURT], held that when refunds are issued in such circumstances, provisions of Section 11A, cannot be invoked without reviewing the original order as dealt in the forthcoming Paras. Moreover, the appellant argues that what is involved in the impugned case is not 'duty' but an 'amount' and therefore, provisions of section 11 A can not be invoked. Learned Counsel for the appellants relies on the ratio of some cases. This Bench in the case of Vee Ei Cee Industries [2018 (9) TMI 21 - CESTAT CHANDIGARH] held that the amount already refunded to the appellant is not recoverable under Section 11A.
Can such credit be termed as “erroneous refund” in the absence of any order in review of the original orders passed ratifying the self-credit taken by the appellants? - HELD THAT:- In the instant case, the appellant availed self-credit by way of refund, in terms of the N/N. 56/2002; the jurisdictional Deputy/ Assistant Commissioner after examining the records to his satisfaction has permitted/ratified the refunds; the appellants were not informed, of any deficiency, as contemplated under Para 2C(e) of the Notification. Thus, the order passed by the Deputy/ Assistant Commissioner assumes the character of an assessment order. The said order has not been reviewed and no appeal has been filed. Consequently, no competent authority has held that the refund impugned were 'erroneous' so as to initiate recovery proceedings as per the provisions of Para 2C(g) of the Notification and/or section 11A of the Central Excise Act,1944. In view of the above discussion, ratio of the cases discussed and the other cases relied upon by the appellant, it is opined that the issue is resolved in favour of the appellants.
Whether in the facts and circumstances of the case, Revenue has established a case of overstating of production in order to avail excess credit in cash? - Whether in the facts and circumstances of the case, the allegation of availment of CENVAT credit only on the strength of invoices wherein no goods have been physically received by the appellants is sustained? - HELD THAT:- It is found that a minimum level of investigation is not carried out by the department. Surprisingly, investigating a case of alleged excess show of production and clearance & wrongful availment of Cenvat Credit, no stock taking, actual or estimated, of raw materials and the final products was undertaken. Shortage/excess of raw material could have established the revenue‟s case at least to some extent. In respect of the alleged excess production, no investigation at the buyers‟ end, to establish that they are non-existent or did not receive any material, was conducted. It was not enquired as to how the financial transactions took place and if records were manipulated - there is force in the appellant‟s argument that if the appellant has taken excess self-credit, it is only after excess payment; the situation is revenue neutral at least in the facts of the impugned case.
As regards the allegation of wrongful credit availment is concerned, we find that the statements of dealers, who have been alleged to have issued invoices without actually supplying goods, were not recorded. Transporters were not questioned; financial transactions have not been gone in to. The only evidence that revenue relied is the inconclusive findings on the basis of check-post records at interstate borders. The culpability of the dealers is also sought to be established on the basis of the reports that goods in respect of 32 Bills of Entry/ Invoice were not received by M/s CCPPL, Ludhiana as the details supplied by them were not reflected at the appropriate ICC as per data supplied by the Punjab Sales Tax Department. The dealers were not even questioned on the same.
It has been held in a catena of judgments that the onus to prove with the evidence is on the department who are making allegations rather than the on the appellant who is defending. As long as the department does not establish with a reasonable degree of evidence that the raw material/input was not duty paid, the same was not received under the cover of documents prescribed thereof, the same was not received in the factory of the manufacturer and that the same is not used in the manufacture of final products cleared on payment of duty or exported without payment of duty or under bond, credit availed cannot be denied. The department cannot allege wrongful availment of Cenvat credit on the basis of half-baked investigation and half-hearted approach and ask the appellant to defend himself by establishing that credit was correctly availed.
Conclusion - Revenue has not established wrongful availment of self-credit or wrongful availment of Cenvat credit by the appellants. The entire allegation and consequential quantification being based on assumptions, presumptions and conjectures, cannot be sustained as held in a number of judgments. Thus, the appeals succeed on the merits of the case and the legal provisions. Therefore, it is found that the other submissions, on limitation, imposition of penalty on different appellants etc., need no discussion as the demand itself is not sustainable.
Appeal allowed.
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2025 (4) TMI 361
Reversal of CENVAT Credit - capital goods removed as such in terms of Rule 3(5A) of CENVAT Credit Rules, 2004 - invocation of extended period of limitation - HELD THAT:- On an identical issue decided by the Principal Bench of CESTAT in the case of Bharti Infratel Ltd. [2022 (9) TMI 1339 - CESTAT NEW DELHI] and held that the capital goods cleared by the appellant would qualify as scrap and that no amount is required to be paid on the clearance of the same by the appellant under Rule 3(5A) of CENVAT Credit Rules, 2004.
As the issue stands decided on merits on unequivocable terms in favour of the appellants, it is not necessary to examine the contention advanced by learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the present case.
Conclusion - The appellants are not liable for reversing CENVAT credit on the capital goods removed as scrap.
The impugned order is not sustainable and is liable to be set aside - Appeal allowed.
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2025 (4) TMI 360
Process amounting to manufacture - activity in compressing the hydrogen gas, received through a pipeline from M/s Punjab Alkalies and Chemicals Pvt. Ltd., into cylinders - HELD THAT:- The Delhi Bench of the Tribunal in the case of Goyal M G Gases [2016 (9) TMI 573 - CESTAT CHANDIGARH] has gone into the issue at length and held 'In fact, they are the processors of the goods. In the case in hand, as the buyer are not consumer as per Chapter Note 9 of Chapter 28 of CETA, 1985. Further, we also hold that the gas is already marketable in its original form and the activity undertaken by the appellant does not render the gas marketable which is already marketable. Therefore, we hold that the activity undertaken by the appellant does not amount to manufacture. Consequently, the appellants are not liable to pay duty.'
Conclusion - The activity undertaken by the appellant does not amount to manufacture on the ground that mere compression of gas into cylinders does not meet the statutory definition of manufacture if it does not create a new product or significantly alter marketability.
There are no merits in the impugned order and consequentially, the appeal is allowed.
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2025 (4) TMI 312
Goods supplied to NTPC for a power project executed by ABB Limited - Benefit under N/N. 6/2006-CE dated 1.3.2006, denied to appellant, being sub-contractor - requirement of supply against International Competitive Bidding - denial of exemption on the grounds that the appellant did not participate directly in the International Competitive Bidding - HELD THAT:- The appellants have enclosed copy of the order given to them by ABB which clearly shows that these are meant for thermal power projects of NTPC at various places. It is also seen that ABB was awarded the contract based on the International Competitive bidding. Therefore, the supplies are covered by Notification No. 6/2006-CE dated 1.3.2006 for the exemption of Excise Duty for clearances made to such projects.
The appellant met all necessary conditions for the exemption, as the goods were supplied for a project awarded through International Competitive Bidding, and the main contractor had complied with the necessary certification requirements.
Similar issue was before the Coordinate Bench of CESTAT, Kolkata in the case of BPIL Ltd versus CCE Kolkata III [2024 (11) TMI 986 - CESTAT KOLKATA] where it was held that appellant was entitled to the benefit of the Notification, and the demands made in the impugned order were deemed unsustainable.
Conclusion - The sub-contractors can benefit from the exemption if the main contractor fulfills the bidding condition.
Appeal allowed.
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2025 (4) TMI 243
Levy of penalty under the provision of sub-Rule (1) of Rule 26 of Central Excise Rules, 2002 - wrongful availment of Cenvat credit - corroborative evidences to support the allegations present or not - HELD THAT:- In the instant case there is no corroborative evidence to prove that the appellant himself was dealing with goods and involved in possessing, transporting, removing, depositing. keeping, concealing, selling or purchasing of excisable goods, knowingly that such goods were liable to confiscation. The contention of the appellant agreed upon that the allegation made in the show cause notice are based on assumption and presumption or suspicion.
There is no evidence that the imported inputs shown in the bills of entry received by the appellant were not used in the manufacture of final product. The department has not disputed the correctness of the quantity manufactured by the appellant, recorded in their daily stock account/ production record. There is no allegation by the department regarding the financial flow back that against the diversion of imported inputs for which any cash payment was received by the appellant. The service tax payment in respect of transportation of goods also establish the transportation of goods. With all these undisputed facts, merely on the basis of the third party documents and RTO reports, it cannot be concluded that the inputs were not received by the appellant. Therefore, the facts are established that the appellant have received the inputs in their factory used in the manufacture of final product and same was cleared on payment of duty. In such circumstance the demand of Cenvat credit is clearly not sustainable.
The Tribunal also held that in adjudication, the adjudicating authority is required to first examine the witness in chief and also to form an opinion that having regard to the facts and circumstances of the case, the statements of the witness are admissible in evidence. Thereafter, the witness is offered to be cross-examined. The Tribunal observed that in the matter learned Adjudicating Authority failed to do such exercise. Therefore, following the law laid down by Punjab & Haryana High Court in the case of Sukhwant Singh [1995 (3) TMI 468 - SUPREME COURT], it is held that none of the statements were admissible evidence in the present case and no Cenvat demand is sustainable on the basis of statements of persons.
Conclusion - The penalty imposed on the appellant set aside, concluding that the allegations were not substantiated by evidence.
Appeal allowed.
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2025 (4) TMI 242
Short payment of Central Excise duty due to the exclusion of VAT retention from the assessable value for the period from December, 2009 to March, 2014 - HELD THAT:- It is not the case that appellant has retained the VAT as his income, infact 99% of VAT retention by the appellant is a capital subsidy /incentive given by the State Government for setting up a new industrial unit as per Industrial Policy of Assam, 2003 read with Assam Industrial Taxation Remission Scheme, 2005. In that circumstances, the decision in the case of Super Synotex (India) Ltd. [2014 (3) TMI 42 - SUPREME COURT] is not applicable to the facts of the case.
The issue has been examined by this Tribunal in the case of M/s. Harit Polytech Pvt. Ltd. [2023 (7) TMI 1547 - CESTAT, DELHI] where it was held that 'Since the subsidy under Promotion Policy is held to not to be an additional consideration, it is held that the impugned demands cannot sustain.'
Conclusion - The remission of 99% of VAT retention by the appellant is nothing but a subsidy given by the State Government as per industrial policy. Therefore, the same is not includable in the assessable value of the goods cleared by the appellant.
No demand is sustainable as per the Show Cause Notice issued to the appellant. Hence, whole of the demand is set aside. Consequently, no penalty is imposable on the appellant - Appeal allowed.
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