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Showing 221 to 240 of 703 Records
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2009 (10) TMI 784
Issues:
- Clandestine removal of goods
- Power consumption analysis
- Transfer of goods to White Field unit
- Non-maintenance of records
Clandestine Removal of Goods:
The case involved allegations of clandestine removal of goods leading to duty demand and penalties. The appellant argued that the confirmation of demand solely based on power consumption was erroneous. They contended that the power consumption analysis did not consider the power generated in-house by the factory from a DG set. Additionally, the appellant highlighted technical factors influencing energy consumption and manufacturing. They emphasized that no study was conducted to assess the factory's furnace conditions. The appellant also argued that the alleged clandestine removal lacked supporting evidence like transfer or clearance records. They asserted that production transferred to their unit at White Field was based on cost of production, which already covered duty liabilities.
Power Consumption Analysis:
The appellant challenged the validity of the power consumption analysis conducted by the Revenue. They cited a Tribunal decision and technical complexities influencing energy consumption to support their argument. The appellant emphasized that the Revenue's reliance on electricity consumption alone was insufficient for making demands. They pointed out discrepancies in the analysis and highlighted the need for a comprehensive assessment considering all technical aspects affecting power consumption.
Transfer of Goods to White Field Unit:
The Tribunal examined the transfer of goods to the White Field unit. It was revealed that the entire production of MS ingots at the factory was transferred to this unit. The appellant clarified that the White Field unit manufactured downstream products from the ingots. The Tribunal noted discrepancies in the value calculation based on the goods cleared to the White Field unit. By considering the cost of production per MT, the Tribunal found that the appellant had a prima facie case for waiver of the pre-deposit amounts due to substantial differences in the cost of production per MT.
Non-Maintenance of Records:
The Revenue argued that the appellant's failure to maintain records of incoming and outgoing materials indicated an intention for clandestine removal. They highlighted the absence of gate register records as suspicious, suggesting an attempt to remove goods secretly. The Revenue also pointed out discrepancies in power consumption between different periods and admissions by the appellant's director regarding higher duty payments. The Revenue's stance was that the lack of record-keeping implied an intention to engage in clandestine activities.
In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit amounts, staying the recovery until the appeals' disposal. The decision was based on the discrepancies found in the power consumption analysis, transfer of goods to the White Field unit, and the lack of concrete evidence supporting the allegations of clandestine removal.
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2009 (10) TMI 783
Issues:
Common issue of denial of benefit under Notification No. 21/2002-Cus. to importers of machines declared as 'computerized embroidery pattern making machine with plotter' leading to duty demands, confiscation, and penalties.
Analysis:
The judgment involves a common issue concerning the denial of benefit under Notification No. 21/2002-Cus. to importers of specific machines, resulting in duty demands, confiscation, and penalties. The Tribunal had previously remitted the cases to the adjudicating authorities for fresh decisions, directing inspection of the machines by competent experts. However, the machines were only inspected by the Textile Commissioner at the importers' premises, not in accordance with the Tribunal's directions. Consequently, the Tribunal set aside the impugned orders and remanded the cases to the jurisdictional Commissioner for proper inspection at the machines' locations and by competent Central Government agencies as per the Tribunal's directions.
Regarding the penalty imposed on the Customs House Agent (CHA) for aiding and abetting the importers, the CHA challenged the penalty, arguing that since the penalty on the importer was set aside initially but affirmed later, their penalty should also be set aside. However, the Tribunal did not accept this argument, considering that the Revenue was also appealing against the same order. Therefore, the CHA's appeal was allowed by way of remand.
In the Revenue's appeals seeking penalties on importers/indenting agents/CHA, the Tribunal noted that since the main issue of benefit eligibility under the Notification was remanded for fresh decision, the jurisdictional Commissioner must also reconsider the penalties. Thus, the Revenue's appeals were allowed by way of remand.
In conclusion, the impugned orders were set aside, and the appeals were allowed by remand, emphasizing the need for proper inspection of the machines and reconsideration of penalties in light of the Tribunal's directions and previous orders.
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2009 (10) TMI 782
Issues:
1. Jurisdiction of the lower appellate authority in remanding a case.
2. Power of the Commissioner (Appeals) to remand matters under Section 35A of the Central Excise Act.
3. Legal position regarding the powers of the appellate Commissioner post-amendment in 2001.
4. Disposal of appeals and the miscellaneous application based on the legal analysis.
Analysis:
1. The judgment addresses the jurisdictional issue arising from the remand order passed by the lower appellate authority. The impugned order remanded a case to the original authority without proper jurisdiction. The Tribunal noted that the lower appellate authority lacked the power to remand cases under Section 35A of the Central Excise Act post-amendment in 2001. Citing the Supreme Court's ruling in MIL India Ltd. v. CCE, Noida, the Tribunal emphasized that the Commissioner (Appeals) could not remand matters back to the adjudicating authority for fresh consideration after the 2001 amendment.
2. The Tribunal, in light of the legal position established by the Supreme Court, set aside the remand order passed by the appellate Commissioner. It was clarified that the appellate Commissioner could exercise the powers of the original authority and handle the refund claim accordingly. The judgment highlighted the necessity of remanding the case to the Commissioner (Appeals) promptly, especially given the pending appeal filed by the assessee against the Assistant Commissioner's order, which stemmed from the remand order.
3. The judgment emphasized the need for the Commissioner (Appeals) to provide the assessee with a fair opportunity to present documentary evidence supporting the refund claim. It was mandated that the Commissioner (Appeals) dispose of the claim in accordance with the law, ensuring the claimant's right to a reasonable opportunity to be personally heard. The Tribunal's decision to remand the case and provide clear directives for the disposal of the refund claim aimed to uphold procedural fairness and legal principles in the adjudication process.
4. The Tribunal's comprehensive analysis and decision to allow the appeals based on the legal grounds presented in the judgment showcased a meticulous consideration of the legal framework governing remand orders and appellate jurisdiction. By addressing the jurisdictional issues, clarifying the powers of the appellate Commissioner, and outlining the procedural steps for the disposal of the refund claim, the judgment demonstrated a commitment to upholding legal principles and ensuring a fair and transparent adjudicatory process.
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2009 (10) TMI 781
Issues:
Challenge to order dismissing refund claim due to late filing of appeals without Condonation of Delay applications.
Analysis:
The appellants contested the order dismissing their refund claim related to education cess paid through PLA, citing the appeals were filed beyond the 30-day limitation without Condonation of Delay applications. The appeals were filed within 30 days after the 60-day period, but the Condonation of Delay requests were submitted only during the appeal hearing.
The Central Excise Act mandates appeals to be filed within 60 days, with a provision allowing a further 30-day extension if sufficient cause is shown. The Commissioner has discretionary power to condone delays up to 30 days beyond the initial period. In this case, the appeals were filed within the 30-day extension period.
The Commissioner refrained from exercising discretion to condone the delay due to the absence of written Condonation of Delay applications with the appeals. However, the appellants did request condonation during the hearing, and it was not argued that the appeals were filed after 60 days. The refusal to condone the delay was deemed unjustified, leading to the order being set aside for remand to the Commissioner with directions to consider the appeals as if the delay had been condoned.
While acknowledging the general requirement for appellants to file Condonation of Delay applications along with late appeals, genuine mistakes made in good faith should not be penalized. Therefore, the impugned order was overturned, and the matters were remanded for proper consideration in line with the law. The appeals were allowed, the delay was condoned, and the Commissioner was instructed to handle the appeals according to legal provisions.
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2009 (10) TMI 780
Issues:
Misdeclaration of country of origin, anti-dumping duty liability, penalty imposition, financial status of the appellant
Analysis:
The case involves allegations of misdeclaration of the country of origin to evade anti-dumping duty. The premises of a company and its Managing Director were searched based on specific intelligence, leading to the discovery of incriminating documents related to imports. The main importer admitted the anti-dumping duty liability and paid the duty along with interest before seeking immunity from penalty. The Hon'ble Settlement Commission imposed a penalty of Rs. 6 lakhs on the importer, which was challenged in the present appeal by the Managing Director of another company involved in the importation process.
The appellant argued on three main grounds. Firstly, he claimed that the imported goods were of Malaysian origin, not Chinese, and thus not subject to anti-dumping duty. Secondly, he asserted continuity of documents proving Malaysian origin and the existence of a manufacturing facility in Malaysia. Thirdly, he highlighted his own financial constraints as reflected in his income tax return. On the other hand, the Department contended that the appellant's arguments lacked merit since the main importer had already admitted liability and the appellant's own statements indicated complicity in the evasion scheme.
Upon review of the case records and arguments from both sides, the Tribunal found that the appellant's claims were not substantiated. The main importer had acknowledged the misdeclaration and paid the duty, rendering the appellant's assertions regarding the origin of the goods unconvincing. The Tribunal noted the Hon'ble Settlement Commission's decision not to grant total immunity from penalty in this case, emphasizing the appellant's significant role in the alleged scheme. Consequently, the Tribunal ruled that the appellant had not established a strong case for a complete waiver of the penalty but directed him to pre-deposit 50% of the penalty amount within a specified timeframe. Compliance with this directive would result in the waiver of the remaining penalty amount, with recovery stayed during the appeal process.
In conclusion, the Tribunal's decision upheld the penalty imposed on the appellant due to his involvement in the misdeclaration of the country of origin and evasion of anti-dumping duty. The ruling balanced considerations of liability, financial status, and the evidence presented, ultimately requiring a partial pre-deposit of the penalty amount while staying further recovery pending appeal proceedings.
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2009 (10) TMI 779
Issues:
1. Refund claims rejection by the original adjudicating authority.
2. Tribunal's order allowing refund claims.
3. Appeal against rejection of the second claim.
4. Unjust enrichment and misdeclaration issues.
Issue 1: Refund claims rejection by the original adjudicating authority
The appellants, engaged in manufacturing dutiable processed fabrics, took input credit without duty payment under a scheme of deemed credit. They made export and sought a refund of accumulated credit under Rule 57F. Two refund claims were made, both rejected by the original adjudicating authority. The Tribunal, through Order No. 471-472/04-NB(C), allowed both appeals. However, the original adjudicating authority failed to sanction full refund as directed by the Tribunal, leading to the rejection of the second claim of Rs. 3,74,791/-.
Issue 2: Tribunal's order allowing refund claims
The Tribunal allowed the appeals based on the Notification No. 29/96-C.E., which permitted credit of declared duty on inputs used in final products cleared for export under bond. The Tribunal observed that the procedural lapses mentioned by the Assistant Commissioner did not warrant denial of the refund under Rule 57F. The Commissioner (Appeals) upheld this view, emphasizing that the appellants' inability to utilize the credit towards home clearances due to the introduction of the Compounded Levy Scheme supported the refund. The Tribunal's decision was based on the fact that the inputs for which credit was taken were used in goods exported under bond, justifying the refund.
Issue 3: Appeal against rejection of the second claim
The appellant's advocate argued that the matter had attained finality post the Tribunal's order, criticizing the lower authorities for rejecting the refund claim. The Revenue contended that the appellants falsely declared exporting goods under bond and had already received rebate money, leading to unjust enrichment if a refund was granted. The SDR highlighted that the Tribunal's decision was based on incorrect information provided by the appellants, discovered post-order issuance.
Issue 4: Unjust enrichment and misdeclaration issues
The Commissioner (Appeals) noted that the goods were exported under claim of rebate, not under bond as declared by the appellants before the Tribunal. Failure to produce evidence supporting export under bond led to the rejection of the refund claim. The rejection was justified to prevent unjust enrichment and benefitting from misdeclarations. Granting a refund would have rewarded the appellants for incorrect information provided to the Tribunal, constituting a violation of judicial discipline.
In conclusion, the rejection of the refund claim by the lower authorities was upheld due to misdeclarations, potential unjust enrichment, and the absence of evidence supporting export under bond. The Tribunal's decision to allow the refund was based on the incorrect information provided by the appellants, rendering the basis for the refund invalid. The judgment emphasizes the importance of accurate declarations and the prevention of unjust enrichment in tax matters.
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2009 (10) TMI 778
Issues:
- Jurisdiction of the original authority to issue a show cause notice after finalizing assessment.
- Interpretation of Section 11A for issuance of show cause notice in cases of short levy.
- Cross objection filed by the respondents regarding the lower appellate authority not addressing the merits of the case.
Analysis:
1. The main issue in this case revolved around the jurisdiction of the original authority to issue a show cause notice after finalizing the assessment. The lower appellate authority held that the original authority, once the assessment is finalized, cannot issue a show cause notice as he becomes functus officio and cannot review his own order.
2. The appellant argued that the show cause notice was issued under Section 11A, citing a Supreme Court decision in the case of CCE, Mumbai v. ITC Ltd. The appellant contended that as per the Supreme Court decision, a notice under Section 11A can only be issued after finalization of provisional assessment. The relevant date for computation of the time period for issuing such a notice in the case of provisional assessment is the date of finalization of the provisional assessment.
3. The respondent, represented by an advocate, filed a cross objection stating that the lower appellate authority did not address the merits of the case. This cross objection was allowed as the lower appellate authority's failure to delve into the merits was a concern for both the respondent and the revenue.
4. Upon examining the arguments and the relevant legal provisions, the Appellate Tribunal found that the order of the lower appellate authority was not sustainable. The Tribunal noted that the lower appellate authority's decision was contrary to the law and the Supreme Court's ruling in the ITC Ltd. case. The Supreme Court had clearly stated that the power under Section 11A to issue a show cause notice in cases of short levy is applicable only after finalization of provisional assessment.
5. Consequently, the Tribunal set aside the lower appellate authority's erroneous order and allowed the appeal of the department. The cross objection filed by the respondents was also allowed, emphasizing the need for the lower appellate authority to address the merits of the case in the subsequent hearing.
6. In conclusion, the impugned order was set aside, and both the appeal and cross objections were allowed. The Tribunal directed the lower appellate authority to hear and decide the case on its merits, ensuring a fair opportunity for both sides to present their arguments.
This detailed analysis of the judgment highlights the key legal issues, arguments presented by the parties, and the Tribunal's decision based on the interpretation of relevant legal provisions and precedents.
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2009 (10) TMI 777
Issues involved: Appeal against penalty imposed under u/s 117 and u/s 48 of Customs Act, 1962.
The Appellate Tribunal CESTAT AHMEDABAD heard an appeal against the penalty imposed on the respondent for contravention of provisions of Section 117 and Section 48 of the Customs Act, 1962. The Commissioner (Appeals) had set aside the penalty of Rs. 50,000/- imposed on the respondent. The appeal was made by the Revenue challenging this decision.
Issue 1: Penalty under Section 117 of Customs Act, 1962
The learned SDR argued that the Commissioner (Appeals) erred in holding that no penalty is imposable under Section 117. It was highlighted that the importer had filed the Bill of Entry after the stipulated time limit of 30 days under Section 48, without any request or permission for an extension. The Tribunal examined the provisions of Section 46 of the Customs Act, 1962, which allows for the presentation of a Bill of Entry at any time after the delivery of the importer manifest or import report. It was noted that there is no specific time limit prescribed for filing the bill of entry after the delivery of the import manifest. The Tribunal emphasized that the delay in filing the Bill of Entry cannot be a reason for the imposition of a penalty for contravention of provisions of Section 48. Reference was made to a previous decision of the Tribunal to clarify the relevance of penalties under Section 117 for minor contraventions of other provisions, which was deemed not applicable in the present case.
Issue 2: Contravention of Section 48 of Customs Act, 1962
The Tribunal delved into the provisions of Section 48, which require goods to be cleared within 30 days and necessitate notice to the importer before the goods are sold. It was emphasized that the objective of Section 48 is to prevent congestion in the port and ensure prompt clearance of goods. Even if the Bill of Entry is filed within 30 days, challenges may arise if the importer does not pay duty or disputes arise regarding classification or valuation. The Tribunal highlighted the importance of obtaining permission from the proper officer before the custodian sells the goods. Ultimately, the Tribunal concluded that the delay in filing the Bill of Entry should not lead to the imposition of a penalty under Section 48.
In conclusion, the Tribunal rejected the appeal, emphasizing that the delay in filing the Bill of Entry should not result in penalties under Section 117 or Section 48 of the Customs Act, 1962. The decision was based on a thorough analysis of the relevant provisions and previous tribunal rulings.
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2009 (10) TMI 776
Issues: Appeal against penalty imposed for contravention of Customs Act provisions
The Appellate Tribunal CESTAT Ahmedabad heard an appeal against the decision of the Commissioner (Appeals) regarding the imposition of a penalty of Rs. 1,00,000 on the respondent for contravention of Sections 117 and 48 of the Customs Act, 1962. The Commissioner (Appeals) had set aside the penalty, leading to the appeal by the Revenue. The main contention was that the importer had filed the Bill of Entry after the stipulated time limit of 30 days under Section 48, without any request or permission for an extension. The learned SDR argued that the penalty should be imposed as per Section 117, despite the Commissioner's decision. However, no one appeared on behalf of the respondents during the proceedings.
Upon consideration of the submissions made by the learned SDR, the Tribunal analyzed the relevant provisions of the Customs Act, 1962. Section 46 of the Act allows for the presentation of a Bill of Entry after the delivery of the importer manifest or import report, without specifying a time limit for filing after delivery. The Tribunal noted that Section 48, which mandates clearance of goods within 30 days, should not be applied to Section 46 for filing the Bill of Entry. It emphasized that the responsibility lies with the importer to ensure timely clearance of goods, even if the Bill of Entry is filed after delivery. Section 48 also requires notice to the importer before goods can be sold, aiming to prevent port congestion and expedite clearance. The Tribunal highlighted that delays in filing the Bill of Entry should not automatically lead to penalties under Section 48, as the Act does not prescribe a specific time limit for filing. The Tribunal distinguished a previous case, Silkon Silk Mills (Exports) Ltd., where penalties were imposed under Section 117 for minor contraventions, which was deemed irrelevant to the current case.
In conclusion, the Tribunal rejected the appeal, upholding the decision to set aside the penalty imposed on the respondent. The judgment clarified that the delay in filing the Bill of Entry, without a specified time limit under Section 46, should not warrant penalties under Section 48 of the Customs Act, 1962. The Tribunal's analysis underscored the importer's responsibility for timely clearance and the objective of ensuring efficient goods clearance procedures at ports. The decision provided a comprehensive interpretation of the relevant provisions and emphasized the need for proper compliance without imposing penalties where the Act does not mandate specific time limits.
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2009 (10) TMI 775
Issues:
1. Whether the demand made by the appellants is time-barred due to the invocation of the extended period of limitation.
2. Whether the demand for interest is justified and correctly applied under the Central Excise Act.
Issue 1: The appellants contested the demand of Rs. 14,84,656/- and a penalty of Rs. 50,000/- imposed on them, arguing that the demand related to a show-cause notice issued on 22-2-99 for the period November, 1996 to November, 1998 was time-barred. They claimed that the Revenue was aware of the shortages and excess in the stockyard, rendering the suppression allegation unsustainable. The appellants relied on a Circular issued by the Board of Central Excise and Customs on 23rd September, 1999, which prescribed a special procedure for reconciling excess and shortages of iron & steel products. The Tribunal found that the appellants failed to provide evidence of disclosing excess quantities to the jurisdictional Excise Officers, as required by the Circular. As the appellants were availing benefits under the Circular, they were bound by its conditions. Consequently, the Tribunal upheld the demand by invoking the extended period of limitation and imposed the penalty, as per Rule 173Q of the Central Excise Rules, 1944.
Issue 2: Regarding the demand for interest, the appellants argued that the interest was levied without specifying any Section of the Act in the impugned order. They contended that interest should only be payable from 11-5-2001 onwards due to the limitation barring the demand under the show-cause notice dated 22-2-99. The Revenue maintained that interest was leviable as duty was paid after the due dates. The Tribunal noted that the adjudication order did not mention any specific Section of the Central Excise Act for the interest demand. As the appellants did not raise this contention before the adjudicating authority, the Tribunal remanded the issue of interest demand back to the adjudicating authority for reconsideration and a fresh decision after affording an opportunity of hearing to the appellants. The appeal was disposed of accordingly.
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2009 (10) TMI 774
Issues:
- Abatement from payment of central excise duty denied
- Claim for abatement under Compounded Levy Scheme
- Allegation of time-barred demand
- Applicability of Section 11A of the Act
- Compliance with Rule 96ZO(2) of the Central Excise Rules
- Consumption of electricity during closure period
- Burden of proof on the Appellants
- Grant of abatement not a formality
Analysis:
The Appellants filed an Appeal against the denial of abatement from payment of central excise duty under the Compounded Levy Scheme. They claimed that their unit was closed for a significant period, fulfilling the conditions of Rule 96ZO(2) of the Central Excise Rules. The Appellants argued that they provided necessary declarations regarding the closure and re-start of their factory, thus meeting the requirements imposed by the Rule. Additionally, they contended that the demand was time-barred as they had complied with the necessary procedures and no suppression could be alleged against them.
The Revenue, represented by the Departmental Representative, countered that the demand was not under Section 11A of the Act but under Rule 96ZO(3) of the Central Excise Rules. They claimed that despite the Appellants' notifications of unit closure, physical verifications revealed the factory was operational during the stated closure periods. The Revenue highlighted instances where the Appellants reported unit closure but subsequent verifications showed the factory in operation, questioning the credibility of the Appellants' claims.
The Tribunal found that the Appellants' unit closure was subject to the provisions of Rule 96ZP(2) of the Central Excise Rules, which required specific notifications and declarations regarding electricity meter readings and stock positions. Despite the Appellants' notifications of unit closure, subsequent verifications by Revenue Officers revealed the factory was operational during the stated closure periods. The consumption of electricity during the alleged closure period raised doubts, as it was comparable to or higher than periods when the factory was running. The Tribunal emphasized that the grant of abatement was not a mere formality but required a thorough consideration of relevant facts.
In conclusion, the Tribunal dismissed the Appeal, finding no infirmity in the impugned order. The decision was based on the evidence indicating that the unit was operational during the claimed closure period, as demonstrated by electricity consumption data and verification reports. The Tribunal upheld that the burden of proof was on the Appellants to establish unit closure, which they failed to do convincingly, leading to the denial of abatement from central excise duty payment.
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2009 (10) TMI 773
Order of conviction and sentence - order of acquittal - Held that:- The trial court was completely justified in acquitting the respondents of Criminal Appeal No. 611 of 1987 of the charges levelled against them and convicting the appellant-original accused No. 3 of Criminal Appeal No. 104 of 1992. Thus the findings recorded by the trial court are absolutely just and proper and in recording the said findings, no illegality or infirmity has been committed by it.
Thus both the Appeals dismissed. The judgment and order dated 12-6-1986 passed by the learned Additional Chief Judicial Magistrate, Valsad, in Criminal Case No. 35 of 1984 are hereby confirmed. The order of acquittal of respondents-original accused Nos. 1, 2 & 4 of Criminal Appeal No. 611 of 1987 of the offences charged against them is hereby confirmed. The order of conviction and sentence passed against the original accused No. 3-appellant in Criminal Appeal No. 104 of 1992 is also confirmed.
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2009 (10) TMI 772
Waiver and stay applications - Held that:- Taking into consideration the entire facts and circumstances of the case, it is provided that on a deposit of ₹ 10,000/- as cost with the adjudicating authority at Kanpur within a period of two weeks, it shall be open to the petitioners to approach the Tribunal along with the certified copy of this order and the receipt of the deposit of ₹ 10,000/-. If such an application is filed before the Tribunal, the Tribunal shall hear and re-examine the waiver and stay applications on merits after giving an opportunity of hearing to the petitioners in the light of the observations made above, in accordance with law.
It is made clear that if the petitioners fail to deposit the cost as stipulated above within the stipulated period of time, the present writ petition shall stand dismissed. If the petitioners comply with the order of this Court, the Tribunal shall rehear and redecide the stay and waiver application preferably within a period of two months.
It has been brought to our notice that due to non-compliance of the impugned order, the appeal filed before this Court has been dismissed. Since the said order has been set aside, the appeal is also restored back to its original number subject to the fulfilment of the above conditions.
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2009 (10) TMI 771
Whether equal penalty under Section 11AC is not imposable on the assessee merely on the ground that the duty has been deposited before the issue of show cause notice ?
Whether in the facts and circumstances of this case, Section 11AC of the Act would be applicable so as to attract the provisions of interest and penalty under Section 11AC as well as 11AB of the Act?”
Held that:- In the light of the absence of findings of clandestine removal of goods or any fraud, mis-representation, suppression of facts with the intention to evade duty, Section 11AC of the Act read with Rule 25 the Rules would not get attracted as has been held by the Hon’ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills’s case (2009 (5) TMI 15 - SUPREME COURT OF INDIA).
The question of law at ‘A’ is answered in favour of the revenue. It is held that Section 11AC of the Act would be attracted and the amount of penalty equivalent to the amount of duty becomes imposable. There is no discretion vested in the assessing authority, appellate authority or the Tribunal to reduce the penal amount except in the circumstances contemplated by various provisos to Section 11AC of the Act. Having answered the aforesaid question in favour of the Revenue, the other question whether Section 11AC of the Act is attracted to the facts of the present case has to be answered against the Revenue and in favour of the dealer.
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2009 (10) TMI 770
Issues Involved:
1. Diversion of imported polyester texturised yarn without payment of appropriate customs and Central Excise duty.
2. Liability of duty payment between supplier EOUs and GCUL.
3. Validity and forgery of CT-3 certificates and re-warehousing certificates.
4. Conspiracy and involvement of supplier EOUs and GCUL.
5. Invocation of extended period for demand.
Summary:
1. Diversion of Imported Yarn:
The Commissioner held that the two appellant companies diverted imported polyester texturised yarn (PTY) without paying appropriate customs and Central Excise duty into the domestic market under the guise of clearance to another 100% EOU.
2. Liability of Duty Payment:
The Commissioner ordered Sanand Textile Industries Ltd. (STL) to pay Rs. 1,22,82,067/- with interest and Karan Fibers and Fabrics Ltd. (KFL) to pay Rs. 33,59,013/- with interest. Penalties u/s 11AC and Rule 209A were also imposed on STL and KFL. The appellants argued that the responsibility to carry goods to the factory premises for production and manufacture of export goods shifted to GCUL once the goods were taken possession of by GCUL at Bhivandi, as per CT-3 certificates and B-16 bond executed by GCUL.
3. Validity and Forgery of Certificates:
The investigation revealed that GCUL obtained CT-3 certificates by replacing the raw material sheet attached to the MOU in the divisional office of Central Excise and forged project authority certificates. The Commissioner found that the CT-3 certificates and re-warehousing certificates were forged, making them null and void ab initio.
4. Conspiracy and Involvement:
The Commissioner concluded that the evasion occurred due to a conspiracy involving supplier EOUs, brokers, and GCUL. The supplier EOUs were found to have played a role in sending goods to the local market and completing paper transactions to avoid detection. The appellants contested this, arguing that there was no evidence of their involvement in the conspiracy.
5. Invocation of Extended Period:
The appellants argued that the demand was issued beyond the stipulated period of six months and was time-barred. The Commissioner, however, invoked the extended period due to fraud and forgery. The Tribunal noted that the rule provides for recovery of duty from the receiver who got the exempted goods and questioned the invocation of the extended period against the suppliers.
Conclusion:
The Tribunal found that the provisions of Chapter X procedure, terms and conditions in the bond, and the transactions between the supplier and the purchaser EOUs were not considered in depth. The matter was remanded back to the Original Adjudicating Authority for fresh adjudication, with instructions to consider the liability of GCUL in greater detail and only if legally there cannot be a liability on GCUL, consider the liability of appellant companies. The impugned order was set aside.
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2009 (10) TMI 769
Clandestine removal - demand based on presumption - Held that: - no cogent evidence having been brought to record to suggest deal of all the three parties with intimate connection or nexus of each other. This proves that the proceeding has been ill founded - There cannot be any presumption or suspicion for an arbitrarily taxation without any cogent evidence being brought to record - appeal dismissed - decided against Revenue.
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2009 (10) TMI 768
The Appellate Tribunal CESTAT NEW DELHI dismissed the Revenue's appeal due to a lack of proper authorization and reasons for appeal by the Committee of Commissioners. The appeal was deemed not maintainable as it did not provide sufficient justification for seeking a review.
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2009 (10) TMI 767
Penalty u/r 26 - CENVAT credit - waste generated during the course of manufacture - after the goods were cleared from the factory of IIL, they were diverted to the Viramgam/lndore based Hard Binding wire factories, who were not in the cenvat chain - Held that: - the only ground for enhancing the penalty was that as per Rule 26(2)(i) of the Central Excise Rules, any person issuing excise duty invoice without delivering the goods specified therein or abets in making such invoice is liable to a penalty not exceeding the amount of such benefit or ₹ 5000/-, whichever is greater. At the outset, it was submitted that Rule 26(2) was inserted on 1-3-2007 & the period of dispute in the instant case is from October, 2003 to March, 2004. Hence, penalty cannot be imposed under the provision non-existent during the relevant period - appeal dismissed - decided against Revenue.
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2009 (10) TMI 766
Issues:
1. Clearance of finished goods from DTA unit to 100% EOU.
2. Utilization of Modvat credit balance for discharging duty.
3. Differential duty demand on clearances from EOU.
4. Applicability of Circular No. 122/95 and limitation period.
5. Allegations of suppression of facts and re-determination of duty liabilities.
Issue 1: Clearance of finished goods from DTA unit to 100% EOU
The case involved the conversion of a unit into a 100% EOU and the subsequent clearance of finished goods into DTA. The department contended that finished goods from the stock at the time of conversion could not be cleared by debiting the input credit balance. The Commissioner upheld this view, stating that the unit could not function as both EOU and DTA without proper substantiation. The appellants argued that they followed lawful procedures and were allowed to operate in dual capacities under the Handbook of Procedures. The Tribunal found the appellants' actions in accordance with the law.
Issue 2: Utilization of Modvat credit balance for discharging duty
The appellants used Modvat credit balance for discharging duty on finished goods cleared during a specific period. The department issued show cause notices proposing demands based on PLA and denying Modvat credit utilization. However, previous orders and Circular No. 77/99 supported the appellants' actions. The Tribunal upheld the Commissioner's decision in favor of the appellants, confirming the utilization of Modvat credit.
Issue 3: Differential duty demand on clearances from EOU
The appellants faced demands for differential duty on clearances from EOU due to incorrect adoption of MRP under Section 4A of the Act. They voluntarily rectified the short payments, rendering the demand unsustainable. The Tribunal found that the demands on this ground could not be upheld.
Issue 4: Applicability of Circular No. 122/95 and limitation period
The appellants argued that the notice was not maintainable under res judicata as similar issues had already been adjudicated. They contended that the demand of further duty for the same period was incorrect. They also raised concerns about the incorrect computation of differential duty and the non-following of Circular No. 122/95. The Tribunal found the demand time-barred and void due to the lack of suppression of facts.
Issue 5: Allegations of suppression of facts and re-determination of duty liabilities
The appellants were accused of suppressing sales details against contracts and not following proper valuation procedures. The Commissioner alleged that sales proceeds should be inclusive of duty to determine value accurately. The Tribunal, however, found that the disputes related to clearances had been previously decided in favor of the appellant, making the demands invalid. The allegations of short payment were addressed by the appellants voluntarily rectifying the errors.
In conclusion, the Tribunal vacated the demands and penalties against the appellants, allowing the appeal based on the findings related to the various issues discussed and analyzed in the judgment.
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2009 (10) TMI 765
Issues:
1. Classification of product as excisable
2. Applicability of extended period of limitation for demand of excise duty and imposition of penalty
Classification of product as excisable:
The main issue in this case revolved around determining whether the product in question, char and dolochar, could be classified as an excisable product and thus subjected to excise duty. The appellant argued, citing precedents, that the product should not be considered excisable. However, the respondent pointed to a Tribunal decision and emphasized the potentiality of the product for generating electricity, supported by a Supreme Court ruling. The lower authorities had already established that dolochar, one of the products, had the potential for electricity generation, leading to its classification as an excisable commodity. The Tribunal noted that un-burnt or partly burnt coal pieces lacking the capacity to produce flame were not excisable goods. Consequently, the Tribunal found no grounds for completely waiving the duty demanded, considering the product's characteristics and potential for electricity generation.
Applicability of extended period of limitation for demand of excise duty and imposition of penalty:
The Tribunal partially allowed the application for stay, considering the financial hardship of the appellants and the Revenue's interest. It directed the appellants to deposit a specified amount within a set period, after which the pre-deposit of the remaining duty and penalty demanded would be waived until the appeal's disposal. This decision aimed to balance the financial concerns of the appellants with the Revenue's interests, providing a temporary relief while ensuring compliance with the duty and penalty requirements.
This judgment from the Appellate Tribunal CESTAT NEW DELHI addressed the classification of the product as excisable and the application of the extended period of limitation for excise duty and penalty demands. It highlighted the importance of the product's characteristics, specifically its potential for electricity generation, in determining its excisability. The Tribunal's decision to partially allow the stay application and set deposit requirements aimed to strike a balance between the parties' interests while ensuring compliance with the duty and penalty obligations.
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