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Showing 501 to 520 of 1519 Records
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2025 (5) TMI 1019
Reversal of CENVAT credit by a construction company engaged in residential complex development - flats sold post-issuance of completion certificates - consideration received towards construction / development of parking area - consideration received towards development costs - compensation received towards cancellation/termination of Joint Development Agreement and Power of Attorney under the declared service - income recognized as forfeiture income' on account of cancellation of bookings - short payment of service tax under ‘Interior Design Consultancy Service’ - Non-reversal of proportionate input service credit attributable to retention charges, in respect of the services received from contractors / sub-contractors - time limitation.
Reversal of Cenvat credit of Rs.63,07,843/-during the period from August 2012 to September 2015 - HELD THAT:- The Explanation under the amended Rule 6 stating that the exempted services as defined in Rule 2(e) of Cenvat Credit Rules, 2004 shall include an activity, which is not a ‘service’ as defined in section 65B (44) of the Finance Act, 1994 is only clarificatory in nature in as much as the pre-amended Rule 6 also defined the categories of sales which cannot fall under the exempted category and the clearances made by the appellant after receipt of completion certificate which were not liable to service tax clearly fall under the exempted category. The claim of the appellant that only from 01.04.2016 the flats sold by them without payment of service tax is to be considered as exempted service is misplaced since all goods and services on which duties/service tax was not paid are considered as exempted and they are not eligible for the input credit.
In the present case, the dispute is that the partial occupancy certificate was issued on 4th May 2011 in respect of Polaris B block and on 23.11.2011 for Vega Block C and final Occupancy Certificate dated 04.10.2012 for all the blocks A,B, and C and the flats sold after that have received consideration of Rs. 11,15,29,085/- on which no service tax is paid. The claim of the appellant is that they are not liable to reverse cenvat credit in view of the above judgments, is totally misplaced, since the facts of that case is that proportionate credit was reversed or not taken and the only dispute was the demand of 8% credit on exempted goods which was allowed. However, in the instant case, neither the appellant had availed proportionate cenvat credit nor had maintained separate accounts, therefore, the decisions relied upon by the appellant are not applicable.
Section 65B(44) of the Finance Act, 1994 w.e.f. 01.07.2012 does not include an activity which constitutes merely a transfer of title in goods or immovable property, by way of sale, gift or in any other manner. Since, the clearance of flats after the receipt of completion certificate are considered to be sale of immovable property, they are not liable to pay service tax - appellants are required to reverse the cenvat credit of Rs.29,67,608/-, the proportionate credit availed on those flats which are cleared after the receipt of the Completion Certificate. Consequently, reversal of cenvat credit of Rs.63,07,843/- is set aside but reversal of proportionate credit is upheld. Hence, it is remanded for limited purpose of re-quantification of proportionate cenvat credit.
Non-payment of service tax of Rs.3,19,777/- on consideration received towards construction / development of parking area in 'The Promont' Project, during the period from March, 2012 to September, 2012 - HELD THAT:- The demand of service tax on the consideration received for ‘parking area’ service is accepted by the appellant and only penalty is being disputed. Hence, on merit this amount is confirmed along with interest.
Non-payment of service tax of Rs.5,54,63,589/- on the consideration received towards development costs, from M/s Promont Hilltop Private Ltd. - HELD THAT:- The demand is being contested on the ground that the amounts received cannot be classified as works contract service since the Transferee was incorporated only on 24th September 2012 and the Appellant merely relinquishes all rights, assets and liabilities pertinent to ‘The Promont’ project for a ‘consideration’, pursuant to the Development Agreement. There is no existence of service provider-recipient relationship and no provision of service pursuant to the Development Agreement - As per Section 3(26) of General Clauses Act, 1897, ‘immovable property’ shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. Right to develop the project transferred vide the Development Agreement amounts to transfer of bundle of rights that arise out of and relate to the land - The transaction is merely a transfer of going concern exempted vide Sl. No. 37 of the Mega Exemption Notification No. 25/2012 dated 20th June 2012 and non-taxability of such transfer is clarified by the Education Guide dated 20th June 2012 published by CBEC.
From the above Clauses of the Agreement, it is clear that there is no sale of an ongoing concern as claimed by the appellant as there is nothing in the Agreement to deem it to be sale or transfer, instead it establishes the fact that the Agreement is based on sharing of 22.5% of the gross proceeds which later was revised to 2.5% of gross proceeds. The actual consideration charged as development costs, which includes construction, marketing and sales of the project, which is in the nature of works contract, hence, the Commissioner after deducting the cost of land has determined the value as Rs.112,18,36,343/- and rightly provided 40% abatement. However, the demand is upheld only for the normal period, hence, it is remanded for limited purpose for re-quantification.
Non-payment of service tax of Rs. 24,72,000/- on compensation received towards cancellation/termination of Joint Development Agreement and Power of Attorney under the declared service category listed in Section 66E(e) of the Finance Act, 1994 - HELD THAT:- The Appellant had entered into Joint Development Agreements with prospective owners. However, due to certain disputes, legal proceedings were initiated between the parties inter se. Thereafter, it was decided to settle the dispute amicably. Consequently, 'Deed of Cancellation’ of Joint Development Agreement and ‘Power of Attorney’ dated 6th January, 1998 and ‘Supplemental Agreement’ dated 22nd May, 1998 and ‘Deed of Cancellation’ dated 10th April, 2013, the prospective owners agreed to pay the Appellant a sum of Rs. 2,00,00,000/- towards compensation for relinquishing rights under the said Agreements and towards reimbursement of cost incurred towards execution of project, as full and final settlement. By virtue of Section 66E(e) of Finance Act, 1994, agreeing to cancel Joint Development Agreement (JDA) for consideration amounts to a taxable service - reliance is placed on Circular No. 178/10/2022-GST dated 3rd August, 2022, which has been adopted for Service tax demands under Section 66E(e) vide Circular No. 214/1/2023-S.T. dated 28th February, 2023.
There are no reason to agree with the Commissioner in as much as the amounts received were only a compensation and not a consideration for any service rendered by the appellant, hence, the demand of 24,72,000/- stands set aside.
Non-payment of service tax of Rs.2,06,186/- on income recognized as forfeiture income' on account of cancellation of bookings - HELD THAT:- There is no dispute that the 'Agreement for sale' and 'Construction Agreement' both dated 23rd October, 2008 entered into between M/s. Tata Housing Development Company Limited and the prospective buyers, that in the event of default by the prospective buyer in payment of instalments, as per agreed Payment Schedule or in the event of cancellation / withdrawal of booking / application on his own volition, the buyer forfeits 10% of the total consideration payable by the prospective buyer - amounts retained by the appellant in breach of the contract/in terms of the contract for cancellation of the purchase of the flats cannot be considered as service under 66E(e) and hence, not liable to pay service tax. Consequently, service tax demand of Rs.2,06,186/- is set aside.
Short-payment of service tax of Rs.1,27,726/- from M/s. Suying Design Private Limited under ‘Interior Design Consultancy Service’ - HELD THAT:- The demand of short-payment of service tax on the on 'interior design consultancy' service is accepted by the appellant and paid along with interest and only penalty is being disputed hence, on merit these amounts are confirmed along with interest. Accordingly, short-payment of Service tax of Rs.1,27,726/- from M/s. Suying Design Private Limited under ‘Interior Design Consultancy Service’ is upheld along with interest.
Non-reversal of proportionate input service credit attributable to retention charges, in respect of the services received from contractors / sub-contractors (Amount Rs.5,80,728/-) - HELD THAT:- The Commissioner has confirmed demand of Rs.5,80,728/- being service tax amount to be reversed on the amount of Rs.98,45,774/- retained by the appellant as shown in their Trial Balance as on 31.03.2014, however, there is no evidence to show that these amounts were not paid to the contractors / sub-contractors on completion of the projects. Moreover, there is no dispute that cenvat credit was availed only after payment of the service tax. The Tribunal in the case of CCE Vs. Thermax Engineering Construction Co. Ltd. [2017 (12) TMI 1191 - CESTAT MUMBAI] has observed 'As regard appeal filed by the department against dropping of demand on retention money and on Export of Service, we find that though the amount against supply of services by the sub-contractors was retained by the assessee but the amount of service tax was paid in full to the supplier/ vendor. The amount was retained by the assessee in terms of understanding between the assessee and their vendors and not due to non payment. The same was agreed to by both the parties.'
Since there is no dispute that the service tax amounts have been paid based on which the cenvat credit has been taken and considering the above decisions relied upon by the appellant, the demand with regard to reversal of cenvat credit is set aside. Consequently, reversal of proportionate input service tax of Rs.5,80,728/- is set aside.
Time Limitation - HELD THAT:- The Commissioner in the impugned order except for stating that certain disclosures were not made has not brought in any of the factors that prove misdeclaration or suppression with intent to evade payment of duty. Therefore, going by the decision of the apex court that suppression cannot be presumed needs to be proved with certainty and factual incidents to prove intention to evade payment of duty, we do not find any reason to confirm the demand beyond the normal period.
Conclusion - i) Demand of reversal of Cenvat credit of Rs.63,07,843/- during the period from August 2012 to September 2015 is set aside but upheld the reversal of proportionate credit and remanded for limited purpose for re-quantification of proportionate credit. ii) Non-payment of service tax of Rs.3,19,777/- on consideration received towards construction / development of parking area in 'The Promont' Project, during the period from March, 2012 to September, 2012" is upheld along with interest, since accepted and not contested by the appellant. iii) Non-payment of service tax of on the consideration received towards development costs from M/s. Promont Hilltop Private Limited by wrongly claiming it as 'Sale of Development Rights', in respect of 'The Promont' Project, during the period from October, 2012 to June, 2015 is upheld; however, remanded for limited purpose for re-quantification of service tax demand for normal period only. iv) Non-payment of service tax of Rs. 24,72,000/- on compensation received towards cancellation/termination of Joint Development Agreement and Power of Attorney under the declared service category listed in Section 66E(e) of the Finance Act, 1994 is set aside. v) Non-payment of service tax of Rs.2,06,186/- on income recognized as forfeiture income' on account of cancellation of bookings made by the customers under the declared service during the period from April, 2014 to March, 2015 is set aside. vi) Short payment of service tax of Rs. 1,27,726/-on the services received from M/s Suying Design Private Limited, Singapore on account of retention of a part-value of 'interior design consultancy' service, is upheld along with interest, since accepted and not contested by the appellant, which is also appropriated in the impugned order. vii) Demand of Service Tax of Rs.5,80,728/- for non-reversal of proportionate input service credit attributable to retention charges, in respect of the services received from contractors / sub-contractors is set aside. viii) All the penalties imposed under Section 77 and 78 are set aside.
Appeal allowed in part.
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2025 (5) TMI 1018
Refund claim - barred by time limitation or not - rejection on the ground that the refund claim was filed belatedly after more than one year whereas as per Section 11B of the Central Excise Act, 1944 - HELD THAT:- The issue is well-covered by various case-law. This Tribunal in the case of M/S. OIL INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX DIBRUGARH [2023 (3) TMI 740 - CESTAT KOLKATA] has held as under 'it is concluded that the statutory limitation period prescribed under Section 11B is not applicable to the refund claimed by the Appellant since the amount paid by the Appellant is not a tax.'
Conclusion - The appellant has filed the refund claim correctly without having to fulfil the time-limit condition specified under Section 11B ibid.
Matter remanded to the adjudicating authority to take up the refund claim filed by the appellant for processing and to pass a considered decision within a period of three months from the date of receipt of this Order - appeal disposed off by way of remand.
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2025 (5) TMI 1017
Refund claim - Area Based Exemption - refund amount should be computed on the basis of total duty paid (from both PLA and CENVAT credit) collectively for all products falling under Serial No.16 of Notification No. 33/2008-CE or not - no appeal would lie in view of the issue already having being decided by Commissioner (Appeals) by order dated 25.03.2009 which has achieved finality - HELD THAT:- The adjudicating authority has sanctioned the refund to the petitioner for subsequent period taking into consideration the total duty paid in PLA and total duty paid utilising Cenvat Credit together for arriving at percentage on all the products together. The department being aggrieved has challenged the same before the Commissioner (Appeals) though no appeal would lie in view of the issue already having being decided by Commissioner (Appeals) by order dated 25.03.2009 which has achieved finality. Therefore, the action of the department to challenge the refund order before the Commissioner (Appeals) was an exercise in futility.
Above reasons given by respondent no.2 is required to be deprecated by all means in view of the fact that respondent no.2 could not have taken a different view than what was taken by his predecessor in order dated 25.03.2009. Respondent no.2 being Commissioner (Appeals) could not have differed with his coordinate rank Commissioner (Appeals) who was his predecessor by observing that the said appellate order of the predecessor not being an order from higher authority is not binding precedent for successor. Such an opinion of the Commissioner (Appeals) is contrary to the judicial discipline as any order passed by the same ranking officer is binding upon the successor when the said order of his predecessor has achieved finality.
Conclusion - i) The Commissioner (Appeals) order dated 25.03.2009 in favor of the petitioner is final and binding on the department and all authorities of equal rank, including respondent no.2. ii) The petitioner is justified in invoking writ jurisdiction to challenge the impugned order which violated binding precedent and judicial discipline.
The impugned order passed by Commissioner (Appeals) dated 18/19.5.2023 is hereby quashed and set aside and the order granting refund to the petitioner is hereby restored - petition allowed.
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2025 (5) TMI 1016
Non-submission of re-warehousing certificate in respect of certain clearances made by the Appellant to EOUs and SEZs - benefit of N/N. 22/2003-CE and 53/2003-Cus (NT) and related circulars - HELD THAT:- The entire section/unit dealing with 100% EOU/SEZ matters was closed by the Customs department in its office at New Customs House, Mumbai and the jurisdiction of the Commissioner had travelled into the hands of multiple Commissioners in the meantime for which no document was traceable from the department side and surprisingly Appellant who is contesting to get necessary relief had refused to produce documents concerning proof of receipt of goods by the consignee, as reveal from para 17. Therefore, neither the department has any right to raise a demand in the absence of any documentary proof to substantiate such demand nor the Appellant could be absolved of its liability since it refused to cooperate in the adjudication process, in furnishing proof of delivery of goods to the customers.
However, having regard to the fact that there was specific direction given by this Tribunal in its order dated 13.03.2023 that Officer at the consignee’s end would be in a better position to confirm the receipt of goods or otherwise available their own record as well as records of the consignee’s and as consignee had not been examined or contacted to furnish the required proof of receipt of goods by them, that would have met the requirement of para 3b of Circular No. 579/16/2001-CX dated 26.06.2001, the demand for non-furnishing of proof of re-warehousing certificate alone can’t form the basis to confirm the said demand.
Conclusion - i) The appellant did not comply with the obligation to produce re-warehousing certificates but also did not cooperate in submitting collateral evidence. ii) The department failed to verify receipt of goods from consignee offices despite attempts. iii) The demand for duty based solely on non-submission of re-warehousing certificates was unsustainable.
The order passed by the Commissioner of Central Tax, Raigarh (Appeals) vide Order-in-Appeal No. NA/96/RGD APP/2021-22 dated 05.07.2021 is hereby set aside - Appeal allowed.
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2025 (5) TMI 1015
Refund of Central Value Added Tax (CVD) and Special Additional Duty (SAD) under the transitional provisions of the CGST Act, 2017 in view of the fact of non-availability of cenvat credit post 01.07.2017 - HELD THAT:- The appellant was eligible to take cenvat credit of CVD and SAD paid by them. However, since the payments were made after 01.07.2017, they were not able to take cenvat credit of the same. It is found that the transitional provisions under Section 142 of CGST Act, 2017 have made provisions for such contingencies. Sub-section (3) of Section 142 ibid provides for cash refund of such cenvat credit subject to the provisions of sub-section (2) of Section 11B of Central Excise Act, 1944.
On going through the provisions of sub-section (2), it is clear that the said sub-section (2) deals with unjust enrichment. It provides that if the incidence of tax has been borne by the appellant, then the appellant is eligible for refund and if the incidence of such tax is passed on by the appellant to any other person, then such amount shall be credited to Consumer Welfare Fund. In the present case the appellant has paid CVD and SAD and, therefore, the incidence is not passed on to anybody and, therefore, they are fulfilling the requirement of the provisions of sub-section (2) of Section 11B of Central Excise Act, 1944. Thus the appellant is eligible for cash refund of Rs.12,84,696/- Rs.6,28,923/- and Rs.2,25,780/-.
Conclusion - The appellant has paid CVD and SAD and, therefore, the incidence is not passed on to anybody and, therefore, they are fulfilling the requirement of the provisions of sub-section (2) of Section 11B of Central Excise Act, 1944.
Appeal allowed.
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2025 (5) TMI 1014
Entitlement to claim the benefit of Entry No. 1A of Notification No. 4/2007-CE dated 1.3.2007 for cement cleared in packaged form to institutional/industrial consumers, despite affixation of retail sale price (RSP) on the packages - liability to pay duty under Entry No. 1C of the said notification, which applies to cement cleared in unpackaged form, for sales to non-trade parties (industrial/institutional buyers) - HELD THAT:- As apparent from Entry No. 1A, the following conditions are required to be met with. (i) All goods (cement herein) is to be cleared in packaged form. (ii) The retail price is not exceeding Rs.190 per 50 kg bag or not exceeding Rs. 3800 per tonne in which case duty at the rate of 350 per tone is to be paid. (iii) The retail price is exceeding 190 per 50 kg but is not exceeding Rs. 250 per kg. Similarly, the price is not exceeding Rs.5,000/- per tonne in which case duty at the rate of 12% of retail sale price is to be paid. The another clarity as is apparent from the said notification is that the notification as amended during the relevant period, is silent about any distinction between trade (consumer) and non-trade (industrial/institutional buyers) parties as has been raised in the impugned show cause notice.
From these admitted facts it stands clear that once the appellant was not selling goods to the ultimate consumer but to DGS&D who had to supply it further to the actual consumers, it becomes clear from the Explanation (2) of the Notification No. 4/2007 that irrespective the cement was cleared in packaged form RSP was not required on those bags. As already observed above there was otherwise no bar of fixing RSP on the packaged goods not meant for direct consumers - Once it is an admitted fact that the goods were cleared in packaged form, we do not see any reason for applicability of S.No. 1C of Notification No. 4/2007 which talks about the rate of duty on the goods which are cleared in unpackaged form.
The entire show cause notice and even the Order-in-Original is held to be mere presumptive of the fact that once the goods are cleared in packaged form the clearance cannot be the institutional/industrial clearance. It is a retail clearance where retail price has to be mandatorily fixed and duty has to be paid based on the retail price - it was Entry no. 1A which is applicable to the given set of facts, specifically in light of the admitted fact that the goods were cleared in packaged form.
Conclusion - Since the appellant has cleared cement in packaged form i.e. in the bags of 50 kg each with RSP printing thereupon to the institute DSD&G, the appellant is held entitled for the benefit of Entry No. 1A of the said N/N. 4/20027 dated 1.3.2007.
Appeal allowed.
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2025 (5) TMI 1013
Disallowance of CENVAT Credit - appellant has not received the goods and they have only received the Invoices based on which Cenvat credit has been availed - HELD THAT:- The appellant has purchased machine and mechanical appliances such as moulds, machine tools, dies for forging, EOT crane of 3MT capacity, furnace and ovens, from the supplier M/s Ashok Electrical Stampings Pvt. Ltd. vide 27 numbers of Central Excise invoices, during the period between 01.07.2004 and 07.01.2005. The appellant claimed that they have received the goods purchased by them under the 27 Invoices goods at the appellant’s factory on the same date on which those goods were cleared from the factory of the supplier. Upon receipt of the inputs under cover of the Central Excise Invoices, they have availed the credits of duty paid on the said goods after entering the details in the appellants RG-23A part 1 and 2 registers maintained by them.
The aforesaid inputs were used by the appellant for manufacture of MS Ingots, alloy steel forging machine square and non-alloy steel forging square. When they became unusable in normal course due to wear and tear, the same were scrapped - It is observed that non-availability of logo/stamp of Supplier in the goods does not mean that those machines were not purchased from the supplier. If supplier did not supplied those goods then who supplied those machines. The machines and machine tools were available in the factory and the same were used for the manufacture of MS Ingots, alloy steel forging machine square and non-alloy steel forging square in the factory for the past four years.
The finding of the adjudicating authority that the appellant has availed the credit without receipt of the goods into the factory is erroneous and not supported by any evidence. Accordingly, the disallowance of the credit to the appellant in the impugned order is not sustainable and hence, the same is set aside. As the disallowance of the credit is not sustained, the question of demanding interest or imposing penalty does not arise and hence the same also set aside.
Conclusion - Disallowance of credit without evidence is unsustainable, and consequential interest and penalty cannot be imposed.
Appeal allowed.
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2025 (5) TMI 1012
Clandestine removal of Sponge Iron - demand based on the evidence and materials recovered during the search and investigation - demand raised on the basis of the input:output ratio arrived at by the Department based on the expert opinion received - HELD THAT:- It is observed that only based on the input-output ratio taking the 'Fe' content of the ore, the allegation has been built up without looking the other quality aspect of the materials i.e. tumbler index in the Iron ore and FC content on the coal which are vital factors for determination of actual production. The expert opinion relied upon in the Order-In-Original also give stress on these aspects, but the Ld. Commissioner has ignored this aspect to confirm the demand.
The law is well settled that the electricity consumption cannot be the only factor or basis for determining the duty liability that too on imaginary basis. It is well known and accepted that the electricity consumption varies from one unit to another and from one date to another and even from one heat to another within the same date. There is, therefore, no universal and uniformly acceptable standard of electricity consumption, which can be adopted for determining the excise duty liability that too on the basis of imaginary production assumed by the department with no other supporting document to justify its allegations.
The Revenue has not brought in any corroborative evidence to the effect that the manufactured goods have been cleared clandestinely and cash transactions have taken place. No statements have been recorded from any of the purported buyers, vehicle owners. No private records with reference to the cash transactions have been seized. All these make us to conclude that the Department has proceeded purely based on the assumptions and presumptions basis without verifying their allegations.
It is observed that clandestine removal of goods is a serious offence, which requires to be established with tangible, clinching and corroborative evidence. In this case, there is no tangible or corroborative evidence in respect of purchase of raw materials, use of excess electricity, actual removal of final products, actual movement of clandestine removals, the mode and flow back of funds, excess purchase of input materials & production details, statement of buyers, etc., so as to bring home the allegation of clandestine removal.
Since the demand itself is found to be unsustainable, the question of demanding interest or penalty on the appellant-company thereon does not arise.
Penalty on Managing Director of the appellant-company - HELD THAT:- It is observed that the allegation in the Show Cause Notice is that the appellant no. 2 / Managing Director was actively involved in the manufacture and clandestine removal of the goods in question. However, it is seen that there is no evidence brought on record by the Revenue regarding the actual involvement of the Managing Director in the alleged offence. Further, in view of findings above wherein the allegation of clandestine removal has been held to be not sustainable, the allegation against the Managing Director also does not sustain. Hence, the penalty imposed on Managing Director of the appellant-company under Rule 26 of the Central Excise Rules, 2002 set aside.
Conclusion - The demand of duty and imposition of penalties based solely on presumptions drawn from input-output ratios and electricity consumption, without direct evidence of clandestine removal, is unsustainable.
Appeal disposed off.
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2025 (5) TMI 1011
SVLDRS - Reopening of case by adjudicating authority, where discharge certificate has already been issued in terms of Section 129 (C) of the Finance Act, 2019 - HELD THAT:- The appellant is eligible for this scheme as show cause notice has been issued to the appellant before 30.06.2019. Admittedly, it is a case where show cause notice has been issued to the appellant before 30.06.2019. Therefore, the appellant was entitled to opt for SVLDRS. Section 126 of the said scheme provides that the designated Committee shall verify the correctness of the declaration made by the appellant and thereafter issue a demand notice, if the amount payable by the appellant and shall issue a discharge certificate to the appellant on payment of amount for which demand notice is issued. Admittedly, in this case, discharge certificate has been issued. Further, Section 129 provides that if the discharge certificate has been issued, the matter shall be concluded and the appellant is not liable to pay any duty/interest/penalty. But, in a case, where it is a voluntary disclosure then within one year of the issuance of the discharge certificate the proceedings can be re-opened.
Admittedly, the provision to Section 129 is not applicable to the facts of this case as it is a case, where show cause notice has been issued to the appellant before 30.06.2019 and after due verification, the demand was raised against the appellant and thereafter on payment, the discharge certificate has been issued to the appellant in form of SVLDRS–IV. Therefore, the proceedings against the appellant shall be concluded against the show cause notice dated 18.09.2017 issued to the appellant.
Conclusion - As discharge certificate has been issued to the appellant, therefore, the demand confirmed in the impugned order amounting to Rs. 84,46,631/- alongwith interest and penalty under Section 11AC of the Act are not sustainable.
With regard to the show cause notice dated 07.11.2017 the registry is directed to place the matter before the Division Bench of this Tribunal for consideration in due course.
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2025 (5) TMI 1010
CENVAT Credit - input services used in relation to “setting up of factory” even after deletion of the phrase “setting up of factory” from the definition of input service with effect from 01.04.2011 under rule 2(l) of the Cenvat Credit Rules, 2004 - HELD THAT:- A Division Bench of this Tribunal in M/s Kellogs India Pvt Ltd vs. Commissioner of Central Tax [2020 (7) TMI 414 - CESTAT HYDERABAD] observed that 'we find that the services used in relation to setting up of a plant are neither specifically included nor specifically excluded during the relevant period. That takes us to the main part of the definition which, with respect to manufacturer allows CENVAT credit of services used in or in 6 relation to manufacture whether directly or indirectly. This definition, in our considered view, is wide enough to cover in its compass any services used for setting up a Plant especially when the services are used for obtaining the land on lease. Without such land no factory can be set up nor can any manufacture take place. We find a direct nexus between the manufacture of the final products and the services used for setting up of plant by leasing the land.'
In the grounds of appeal it has been stated that since the decisions rendered by the Tribunal in Kellogs India and Pepsico India [2021 (7) TMI 1094 - CESTAT HYDERABAD] have been assailed before the Telangana High Court, it cannot be said that the decisions of the Tribunal had attained finality - This ground taken in the appeal is without any basis. So long as the decisions of the Tribunal have not been set aside, the Principal Commissioner was bound to follow the decisions.
Conclusion - CENVAT credit on input services used in relation to setting up of factory is admissible under Rule 2(l) of the CENVAT Credit Rules, 2004, despite the deletion of the phrase "setting up of factory."
In view of the aforesaid decisions of the Tribunal in Kellogs India and Pesico India, there is no error in the order passed by the Principal Commissioner - appeal dismissed.
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2025 (5) TMI 1009
CENVAT Credit - input services used in relation to “setting up of factory” even after deletion of the phrase “setting up of factory” from the definition of input service with effect from 01.04.2011 under rule 2(l) of the Cenvat Credit Rules, 2004 - HELD THAT:- A Division Bench of this Tribunal in M/s Kellogs India Pvt Ltd vs. Commissioner of Central Tax [2020 (7) TMI 414 - CESTAT HYDERABAD] observed that 'we find that the services used in relation to setting up of a plant are neither specifically included nor specifically excluded during the relevant period. That takes us to the main part of the definition which, with respect to manufacturer allows CENVAT credit of services used in or in 6 relation to manufacture whether directly or indirectly. This definition, in our considered view, is wide enough to cover in its compass any services used for setting up a Plant especially when the services are used for obtaining the land on lease. Without such land no factory can be set up nor can any manufacture take place. We find a direct nexus between the manufacture of the final products and the services used for setting up of plant by leasing the land.'
In the grounds of appeal it has been stated that since the decisions rendered by the Tribunal in Kellogs India and Pepsico India [2021 (7) TMI 1094 - CESTAT HYDERABAD] have been assailed before the Telangana High Court, it cannot be said that the decisions of the Tribunal had attained finality - This ground taken in the appeal is without any basis. So long as the decisions of the Tribunal have not been set aside, the Principal Commissioner was bound to follow the decisions.
Conclusion - CENVAT credit on input services used in relation to setting up of factory is admissible under Rule 2(l) of the CENVAT Credit Rules, 2004, despite the deletion of the phrase "setting up of factory."
In view of the aforesaid decisions of the Tribunal in Kellogs India and Pesico India, there is no error in the order passed by the Principal Commissioner - appeal dismissed.
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2025 (5) TMI 1008
Refund claim - eligibility for exemption under N/N. 33/99-C.E. dated 08.07.1999 based on substantial expansion of installed capacity exceeding 25% after 24.12.1997 - delay of approximately seven years in filing the exemption/refund claim.
Refund claim - eligibility for exemption under N/N. 33/99-C.E. dated 08.07.1999 based on substantial expansion of installed capacity exceeding 25% after 24.12.1997 - HELD THAT:- The respondent has claimed the benefit of Notification No. 33/1999-C.E. dated 08.07.1999 under Para 2(a) read with Para 3(b) of the said Notification. The claim of the respondent was verified by the Ld. Assistant Commissioner of Central Excise, Digboi on 17.06.2008 and it was found that the percentage of increase in installed capacity by way of substantial expansion during the post expansion period was made by way of (i) withering troughs = 25.39% and (ii) fermenting floor – 88.88%. Thus, the respondent had fulfilled the condition prescribed in the Notification No. 33/99-C.E. dated 08.07.1999 and thus the ld. adjudicating authority found the respondent to be eligible for the refund and sanctioned the refund and the said order has been upheld by the Commissioner (Appeals). However, the Revenue has objected to it stating that the refund claims in these cases were filed by the respondent after a lapse of seven years from the date of eligibility to Notification No. 33/99-C.E. dated 08.07.1999 which is not a reasonable period, as contended.
The respondent have fulfilled the condition of 25% substantial expansion in the capacity and have also filed the statement of duty paid by way of RT-12 / ER-1 every month. Accordingly, it is observed that they have fulfilled both the conditions stipulated in Notification No. 33/99-C.E. dated 08.07.1999 for availing the benefit.
Delay of approximately seven years in filing the exemption/refund claim - HELD THAT:- The Tribunals in a number of cases, namely, (1) Commissioner of Central Excise vs Vinay Cement Limited, [2001 (4) TMI 723 - CEGAT, KOLKATA]; (2) Commissioner of Central Excise vs Napuk Tea Estate [2006 (7) TMI 554 - CESTAT, KOLKATA] and (3) Dhanseri Tea Estate vs. Commissioner of Central Excise, [2011 (7) TMI 760 - CESTAT, KOLKATA] have held that statements of duty paid submitted in RT-12 returns amount to full compliance of Clause 2(a) of the said notification and refund of duty paid cannot be denied for want of separate claim for refund of duty paid.
In an identical case of disposing multiple Central Excise appeals including C.Ex.App. 8/2016 MK Jokai Agri Plantations Limited & Anr. vs. Commissioner of Central Excise, Dibrugarh [2018 (9) TMI 566 - GAUHATI HIGH COURT], the Division Bench of the Hon'ble Guwahati High Court has held that an incumbent having been once found to be eligible for exemption and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, would cause grave injustice which cannot be permitted.
Conclusion - The respondent has fulfilled the condition of 25% expansion in capacity as has been verified by the adjudicating authority. Secondly, the respondent has been filing their RT-12 / ER-1 Returns indicating their duty liability. In these circumstances, by relying on the decision of the Hon'ble Gauhati High Court referred, it is held that the respondent has fulfilled the conditions prescribed in the Notification No. 33/99-C.E. dated 08.07.1999 and the refund has been rightly sanctioned to the respondent.
The lower authorities have rightly allowed the refund claims filed by the respondent - appeal of Revenue dismissed.
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2025 (5) TMI 1007
Rejection of refunds of amounts paid as duty (or deposits equivalent to duty) during the period from March 2005 to mid-2014 - Classification of 'Coconut Oil' packed in containers of less than 200 ml - to be classified under Heading 1503 (Fixed Vegetable Oils) or Chapter 33 (Cosmetics and Toiletries) of the Central Excise Tariff Act, 1985? - HELD THAT:- There is no denial of the facts that what was paid, may be as a ‘deposit’ by the appellant, was an amount equal to the duty element, the appellant itself had classified the ‘Coconut Oil’ pack of less than 200 ml. under Chapter 33 [and not under Chapter 15], there was a serious issue regarding the very classification of ‘Coconut Oil’ below 200 ml. package as the Board had issued Circulars [145, 890, etc.], there were Hon’ble High Court [of Bombay, Kerala & Madras] rulings in support of tax payers and the jurisdictional High Court’s order in W.P dated 29.04.2014 coupled with the dismissal of SLP/Civil Appeal by the Apex Court resulting in the very withdrawal of Circular No. 890/10/2009-CX supra by the Government. The Commissioner (Appeals) has relied heavily on this Circular and therefore, when the same is withdrawn, then the same becomes non-est and any order passed following the said Circular also becomes non-est.
Conclusion - There is no justification in rejecting the refund claims since primarily the ground on which rejection was made is itself not there anymore in the statue book.
The impugned order set aside - appeal allowed.
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2025 (5) TMI 1006
Classification of non-woven fabrics - to be classified under the CETH 5603 or under CETH 39021000? - HELD THAT:- The issue involved was examined by the Tribunal in the case of Tirupathi Nonwoven Pvt.Ltd. v. Commissioner of C.Ex., Nagpur [2016 (10) TMI 646 - CESTAT MUMBAI] and had held the product as correctly classifiable under CET 5603. As the Department had not conducted any fresh tests, as were directed by the Tribunal, to support the department’s claim, that the product would call for classification under Chapter 39, the issue cannot be considered and interpreted rather differently.
As the case is pivoted around a classification dispute, the process of manufacturing and also laboratory test report are a key factor in deciding the instant issue. The Regional Laboratory at Kolkata of the Textile Committee, Ministry of Textiles, described the product as non-woven fabric wherein polyolefin fibers are made use of. From the reports it transpires that polyolefin fibers are present in the sample. Also a report was obtained from the Joint Director, CRCL, Kolkata Customs House who clarified that the sample was found to be Non Woven Sheet Compound of fibers of Polypropylene.
The learned adjudicating authority has extensively analyzed the relevant section and chapter notes and as to why the product would merit classification as claimed by the assessee and not as alleged by the Revenue. He has also taken note of such product being cleared by other manufacturers in the jurisdiction classifying them under Chapter 56 - For coming to a conclusion that the product will merit classification under Chapter 39, it is found that no corroborative evidence in the form of any test report has been placed by the Revenue. Further it is found that the basis of classification proposed by the Revenue is a bland statement, since the allegation is that the non-woven fabric manufactured by them should be classified under Chapter 39 of CETA, 1985. Section VII of the Central Excise Tariff Act deals with Plastic and Articles thereof and Rubber and Articles thereof where under Chapter 39 specifically deals with plastic and articles thereof. It consists of various items falling under Central Excise Tariff 3901 to 3906 with several 6 digits and 8 digits sub-classifications. The 6 digits and 8 digit sub-classifications are important to arrive at the correct rate of duty applicable to a product. In this particular case, the Revenue has not even made any attempt to give the details of 6 digits/8 digits of Chapter 39 under which they feel that the product should be classified.
Conclusion - Non-woven fabrics made of polypropylene fibers, not entirely embedded or coated with plastics, are classifiable under Chapter 56, Heading 5603, as non-woven fabrics of man-made filaments.
The order of the adjudicating authority is upheld - appeal dismissed.
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2025 (5) TMI 1005
Validity of conviction and sentence under section 109 of the Indian Penal Code (‘IPC’) read with Section 13(2) and Section 13(1)(e) of the Prevention of Corruption Act 1988 (‘1988 Act’) - conviction for abetment - illegal demanded and received for money for handing over a cheque relating to a motor accident claim - co-accused (husband of the appellant, at the time) was also convicted and sentenced - incriminating documents relating to movable and immovable property in the name of the appellant and her husband found in search - appellant’s husband serving as a public servant on the post of Divisional Manager in United India Insurance Co. Ltd. - HELD THAT:- It is an admitted position that the appellant’s husband has acquired assets (disproportionate to his income), during the check period, in appellant’s name. Both the courts below have given concurrent findings on this aspect, and it is not required for us to deal with that aspect in detail.
If we apply the principles laid down in the P. Nallammal case [1999 (8) TMI 953 - SUPREME COURT] the present appellant’s case would definitely fall either in the 2nd or 3rd illustration. It is not clear from the record whether the appellant and her husband entered into a prior conspiracy to amass a huge bulk of wealth through bribery, but there is no doubt that after such disproportionate wealth was amassed, the appellant has been actively involved in concealing such wealth by keeping assets in her name. By doing so, the appellant is undoubtedly guilty of offence of abetment falling under section109 IPC read with 13(2) and 13(1)(e) of the 1988 Act.
Moreover, we would like to note that even the appellant was a public servant at the time of commission of the offence, as she was holding the post of Assistant Superintendent in the Chennai Port Trust, though she has been prosecuted here in her capacity as the wife of the main accused. We would also like to note that the appellant’s argument that she is no longer the wife of co-accused as the co-accused has remarried, has no force because at the time of commission of offence, she was the wife of the co-accused. Even if we assume that she was not the wife at the time of commission of crime, then also it is immaterial since it is proven that she had allowed the co-accused to accumulate assets in her name and thus, assisted the co-accused in accumulation of assets disproportionate to the known sources of income. It is a well settled law that even a non-public servant can be convicted under section 109 IPC read with 13(1)(e) of the 1988 Act. We, therefore, find no reason to hold that the appellant could not have been convicted under section 109 IPC read with 13(2) and13(1)(e) of the 1988 Act.
Hence, we are of the opinion that the finding of both the courts below does not require any interference. The appeal is accordingly dismissed.
The appellant, who is on bail, is directed to surrender within four weeks from today.
Interim order(s), if any, stand(s) disposed of. Pending application(s), if any, stand(s) disposed of.
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2025 (5) TMI 1004
Seeking regular bail in connection with FIR registered by the National Investigation Agency (NIA) - investigations into a multi-jurisdictional narcotics smuggling operation allegedly executed by Afghan-based syndicates, with links to domestic operatives - substantial quantities of heroin were illicitly brought into India under the cover of commercial consignments - Offences punishable under Sections 8(c), 21(c), 23(c), and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), Sections 17, 18, and 22C of the Unlawful Activities (Prevention) Act, 1967 (UAPA), and Section 120B of the Indian Penal Code, 1860 (IPC) - pre-trial incarceration - HELD THAT:- The Appellant faces serious charges, which allegedly carry grave societal ramifications, including the facilitation of cross-border drug trafficking—an offence with well-documented links to organised crime and public health degradation. The seizure in the connected consignment is part of what the Prosecution claims to be the largest heroin bust in Indian history, valued at over INR 21,000 crores. The scale and sophistication of the operation, involving foreign syndicates, shell firms, medical visas, and false documentation, elevates this case far beyond routine NDPS violations.
This Court also cannot ignore the fact that multiple key witnesses still remain to be examined, and the trial while underway, will take time in completion. Out of 24 most vulnerable or material witnesses, two have died, and two others are untraceable. One of the deceased witnesses, a retired Customs Officer, was found dead on the very day he was scheduled to record his statement under Section 164 CrPC. The risk of witness tampering or elimination—whether directly attributable to the Appellant or not—is a real and present concern that militates against the grant of bail at this stage.
Moreover, the Appellant’s criminal antecedents, though not involving prior accusations under the NDPS Act, include multiple DRI and customs proceedings involving smuggling of cigarettes, undervaluation of imports, and alleged complicity in corruption offences. These antecedents are relevant only for the limited purpose of evaluating the Appellant’s propensity to interfere with the process of justice if enlarged on bail.
NIA has also highlighted that several accused remain absconding, including the primary foreign conspirators. In that context, the Appellant’s foreign travel, overseas connections, and financial capacity cannot be overlooked in evaluating the possibility of flight risk. These are not speculative concerns but flow directly from the Appellant’s prior conduct and profile.
We are conscious of the settled principle that pre-trial incarceration should not translate into punitive detention. The Appellant has been in custody since 24.08.2022, and while we do not find that this duration alone warrants bail under the present circumstances, the Appellant shall remain at liberty to renew his prayer for bail after a period of six months, or upon substantial advancement in the trial, whichever is earlier. Such a course would allow the Prosecution to complete the examination of its core witnesses while preserving the accused’s right to seek release at a later and more appropriate stage.
We deem it necessary to clarify that, at this stage, it would be premature and speculative to extend the allegations against the Appellant to the domain of terror financing. While the prosecution has invoked provisions of the UAPA and has broadly linked the smuggling enterprise to trans-national syndicates with suspected affiliations, there is no compelling reason to currently link the Appellant and proscribed terrorist organisations, either within or outside the country. The evidentiary foundation to sustain such a grave allegation must be clear and compelling—something that, can be seen only after a substantial portion of evidence is led by both the parties.
Thus, we dismiss the instant appeal with the following directions:
i. We are not inclined to enlarge the Appellant on regular bail at this stage. He shall be at liberty to renew his plea for regular bail after a period of 6 months, or at a stage where the ongoing trial has progressed substantially;
ii. The NIA is directed to submit to the Special Court an additional list of witnesses who, in its assessment, are sensitive or material, inasmuch as their testimony may have a direct bearing on the role of the Appellant or other co-accused in the ongoing trial and connected investigation;
iii. The Special Court is directed to list the matter twice in a month and record the statements of Prosecution witnesses on a continuous and uninterrupted basis; and
iv. If the Presiding Officer of the Special Court has not been posted thus far, we request the Hon’ble Chief Justice of the High Court of Gujarat to do the needful within a week.
As a measure of abundant caution and at the cost of repetition, we make clear that this order shall not be construed as an expression of opinion on the merits of the case and shall not prejudice the trial proceedings in any manner.
Ordered accordingly.
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2025 (5) TMI 1003
Commission of offence committed in relation to fabrication and forgery of documents after the suit was withdrawn - within the purview of Section 195 (1) (b) of the CrPC - expression "Complaint" - validity of cognizance taken by the Magistrate and the High Court's dismissal of the petition challenging such cognizance - HELD THAT:- From the record, it clearly indicate that the proceedings initiated by filing of Civil Suit were concluded on submitted the withdrawal pursis. All the subsequent acts that is preparation of bogus documents and replacing these bogus documents to the court record were the acts post conclusion of the proceedings. It may not be out of place here to mention that as the suit was withdrawn on the withdrawal pursis and the entry was made in Rojkam the documents in the said civil Suit No. 79 of 2003 were divided into four files viz. A, B, C and D and thereafter the said files were despatched vide Outward Register No. 215 of 2004 to the Record Office of District Court, Bharuch on 4th May, 2004, as per the provisions of the Civil Courts Manual. The record, thereafter, was lying in the custody of the Deputy Registrar-cum-Record Keeper, District Court, Bharuch. Thus, the record was not in the custody of the court before whom the civil suit was filed.
Thus, Section 195 CrPC is not at all applicable. On the contrary, the principles which are expounded by this Court in certain judgments and collectively, referred to in the judgment of M.R. Ajayan v. State of Kerala & Ors. [2024 (11) TMI 1110 - SUPREME COURT] in para 21 relating to prosecution under Section 195 CrPC are applicable in the present case. In our opinion, the following principles from M.R. Ajayan (supra) are applicable :
iv. Broadly, the scheme of the Section requires that the offence should be such which has a direct bearing on the discharge of lawful duties of a public servant or has a direct correlation with the proceedings in a Court of justice, affecting the administration of justice.
v. The provision only creates a bar against taking cognizance of an offence in certain specified situations except upon complaint by the Court.
vi. To attract the bar under Section 195(1)(b), the offence should have been committed when the document was in "custodia legis" or in the custody of the Court concerned.
viii. High Courts can exercise jurisdiction and power enumerated under Section 195 on an application being made to it or suo-motu, whenever the interest of justice so demands.
ix. In such a case, where the High Court as a superior Court directs a complaint to be filed in respect of an offence covered under Section - 195(1)(b)(i), the bar for taking cognizance, will not apply.
It is not in dispute that the object of imposition of the bar under Section 195 CrPC is to avoid the frivolous litigation and not to provide shelter or tool to a mischief player or an offender.
Thus, in our opinion, the judgment and order passed by the High Court, is just and proper. The High court by considering the facts, in its proper perspective, arrived at a just conclusion. Therefore, we see no reason to show any indulgence in the judgment and order passed by High Court impugned in the present appeal. The appeal thus being devoid of any merit is liable to be dismissed. Accordingly, the same is dismissed.
Pending application(s), if any, shall be disposed of accordingly.
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2025 (5) TMI 1002
Power of the Arbitration and Conciliation Act, 1996 ("1996 Act") for appointment of an arbitrator - jurisdiction under Section 11 - HELD THAT:- As the above decision has been rendered by a three-Judge bench of this Court after considering the seven-Judge bench decision of this Court in In Re: Interplay [2023 (12) TMI 897 - SUPREME COURT (LB)], we are of the view that the respondent cannot profit from certain observations made by a two-Judge bench of this Court in Emaar [2022 (10) TMI 89 - SUPREME COURT]
In our view, therefore, the High Court fell in error in bisecting the claim of the appellant into two parts, one arbitrable and the other not arbitrable, when it found arbitration agreement to be there for settlement of disputes between the parties. The correct course for the High Court was to leave it open to the party to raise the issue of non-arbitrability of certain claims before the arbitral tribunal, which, if raised, could be considered and decided by it.
The appeal is, therefore, allowed. The order of the High Court to the extent it excludes claims mentioned in para 48 (ii), (iii) and (iv), as referred to in paragraph 8 of the impugned order, is set aside. The parties are, however, at liberty to take the plea of non-arbitrability of certain claims before the arbitral tribunal, which shall decide the same without being prejudice by any observations made in the order of the High Court. There is no order as to costs.
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2025 (5) TMI 1001
Dishonour of a cheque - liquidation of the company as well as lack of financial resources - moratorium imposed under the Insolvency and Bankruptcy Code (IBC) protects an individual director or personal guarantor from criminal prosecution - HELD THAT:- Having perused the decision in Rakesh Bhanot [2025 (4) TMI 775 - SUPREME COURT] we share the view expressed therein.
There is, thus, no reason to hold that because the company has been liquidated, the appellant has no liability. Incidentally, the appellant was convicted even before the process under the Insolvency and Bankruptcy Code was initiated. Further, his position is that of a personal guarantor for the loan advanced to the company. Also, NCLAT expressly permitted proceedings under Section 138 of the N.I. Act to continue.
Hence, it is not open to the appellant to claim protection by urging that proceedings under Section 138 of the N.I. Act cannot be carried forward against him.
Thus, we find no merit in any of the appeals. However, as a last opportunity, we grant the appellant some more time to put in 25% of the cheque amount before the High Court. Let such amount be deposited in the Registry, within a period of eight weeks from date. Till that time, the appellant’s liberty shall not be curtailed.
In the event, payment within the aforesaid time is not made, law shall take its own course meaning thereby that the appellant shall expose himself to be taken into custody.
Should the deposit be made, the revisional application shall be heard on its own merits and decided in accordance with law.
If any amount out of 25% of the cheque amount has already been paid and sufficient proof is produced before the High Court to this effect, the same may be considered upon granting reasonable opportunity to the complainant and the liquidator to offer their versions.
Subject to the aforesaid terms, the appeals stand dismissed.
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2025 (5) TMI 1000
Seeking expeditious disposal of cases under Negotiable Instruments Act, 1881 - application under Section 483 Cr.P.C./Now Section 529 of Bhartiya Nagrik Suraksha Sanhita, 2023 - Complaint under section 137 - statutory provision of Sections 143(2) and 143(3) of the N.I. Act - HELD THAT:-Considering the judgement of Apex Court in the case of Indian Bank Association and others vs. Union of India and Others [2014 (5) TMI 750 - SUPREME COURT] the trial court is directed to conclude the trial of Complaint Case No. 1113 of 2017 (New No. 867 of 2024), under Section 137 of the Negotiable Instruments Act, 1881 (Amrendra Pratap Singh Vs. Lal Bahadur) Police Station Kotwali Nagar, District Sultanpur keeping in mind the direction of the Apex Court in above mentioned cases, expeditiously preferably within a period of six months from the date of receipt of certified copy of this order, strictly in accordance with statutory provision of Sections 143(2) and 143(3) of the N.I. Act, if there is no legal impediment.
It is also directed to the concerned court that for ensuring the presence of accused during trial, it should not hesitate to take coercive measures provided under Cr.P.C.
With the aforesaid direction, the application is disposed of.
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