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2002 (5) TMI 490
The judgment by Appellate Tribunal CEGAT, Mumbai held that testing fee levied by State Government authorities in Maharashtra does not form part of the normal price of goods. The fee is not part of the normal cost of manufacture and should not be included in the assessable value of the goods. The appeal was allowed in favor of the appellant.
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2002 (5) TMI 489
The appellant challenged a demand for misclassification of Varnish under Central Excise Rules. The department issued a demand notice three and a half years later, alleging wilful misstatement and fraud. The Tribunal ruled in favor of the appellant, stating that the demand was barred by limitation as the classification order was made after receiving the test report, and there was no evidence of wilful misstatement or fraud. The appeal was allowed.
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2002 (5) TMI 488
Issues:
- Duty demand confirmation against the firm appellant and penalties imposed on partners
- Dispute over clearance of goods in DTA without permission and central excise registration
- Time-barring of demand and recalculating duty liability
- Invocation of extended period of limitation due to suppression of material facts
- Excessive penalty imposition and plea for reduction
Analysis:
1. The judgment concerns appeals against an order confirming duty demand of Rs. 15,69,046 against the firm appellant and penalties on partners for making DTA clearances without central excise registration and duty payment. The firm, registered as a 100% export-oriented unit, was required to export 100% of production under Exim Policy, manufacturing dehydrated onions exempt from excise duty. Despite depositing evaded duty, a show cause notice led to the duty confirmation and penalties by the Commissioner.
2. The dispute revolves around the clearance of goods in DTA without seeking permission, violating conditions of operating as a 100% EOU. The appellants argued that permission was superfluous, contending no violation due to the goods not being restricted. However, the Tribunal rejected this, stating the registration obligated compliance with terms, including not clearing goods in DTA without permission, central excise registration, and duty payment, as per Exim Policy provisions.
3. Regarding the time-barring of demand, the Tribunal noted the demand period beyond 5 years in the show cause notice, suggesting a recalculation from 5 years backward from the notice date, considering prevailing duty rates. The extended period of limitation was invoked due to the appellants' suppression of material facts, as they failed to inform the excise department before DTA clearances, indicating intent to evade duty.
4. The judgment rejected the appellants' argument against the extended limitation period, citing precedents that mere non-filing of declaration does not imply suppression, but positive omission or commission of facts with intent to evade duty. The Tribunal found the appellants' actions, despite being a registered EOU, constituted suppression and wilful misstatement, justifying the extended limitation period under Section 11A(1) of the Central Excise Act.
5. Lastly, the excessive penalty imposed on the firm and partners was addressed, considering financial hardship. The Tribunal, noting the excess duty paid, reduced the firm's penalty from Rs. 2,00,000 to Rs. 50,000, and partners' penalties from Rs. 50,000 each to Rs. 20,000 each. The duty liability for 5 years backward from the notice date was to be recalculated based on prevailing duty rates.
6. In conclusion, the Commissioner's order was modified, and the appeals were disposed of accordingly, with penalties reduced and duty liability recalculated for the appellants.
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2002 (5) TMI 487
Issues:
1. Addition of the amount attributable to purchase tax in the assessable value.
2. Deduction of sales tax payable from the price of the yarn while fixing its assessable value.
Analysis:
1. The first issue revolved around the addition of the amount attributable to purchase tax in the assessable value. The Commissioner had confirmed a duty demand of over Rs. 6 lakhs, including penalty, based on this addition. The appellant argued that purchase tax on cotton, the raw material for spinning yarn, was irrelevant for assessing yarn to Central Excise duty since the duty was ad valorem based on the sale price of the yarn. The appellant's contention aligned with Section 4 of the Central Excise Act, which deems the value of goods for duty assessment as the normal selling price. As there was no dispute regarding the normal sale price of the yarn, the payability of purchase tax on raw material was deemed irrelevant. Consequently, the appellant's appeal was accepted in this regard.
2. The second issue pertained to the deduction of sales tax payable from the yarn's sale price to determine the assessable value. The appellant had deducted the sales tax paid during 1995-96 from the sale price, which was later refunded by the tax authorities. The appellant argued that the deduction was valid as the sales tax was payable and paid during the relevant period. The appellant contended that the demand for duty recovery related to the deduction was time-barred, as there was no suppression of facts or contravention involved. The Tribunal agreed that the deduction of sales tax was legitimate for the year 1995-96, as it was payable and paid during that period, despite the subsequent refund. The demand for duty recovery beyond the statutory limitation period was held as time-barred for the major portion of the amount. However, the remaining short-levy amount was deemed payable by the assessee.
In conclusion, the Tribunal confirmed the short-levy of Rs. 1,13,571, holding the Revenue's appeal partially allowed. The appellant's appeal was entirely allowed, quashing the duty demand related to the purchase tax inclusion in the assessable value and the penalty imposed. Both appeals were disposed of accordingly.
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2002 (5) TMI 486
The appellate tribunal in Mumbai allowed the appeal against duty demand and penalty imposed on the appellants for including expenses incurred by consignment agents in the assessable value of excisable goods. The tribunal disagreed with the Commissioner's conclusion, citing the Supreme Court's decision that the ex-factory price should be considered as the basis of value when ascertainable, even for goods sold from depots. The tribunal set aside the order and allowed the appeal.
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2002 (5) TMI 485
The Appellate Tribunal CEGAT, Mumbai ruled in a case involving duty on French polish, sealing wax, and varnish cleared without payment of duty. The Tribunal rejected the argument that the products were not excisable, stating they fall under specific tariff headings. The Tribunal also addressed issues of limitation and directed the Commissioner to reconsider the case based on certain submissions. The impugned order was set aside for further review.
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2002 (5) TMI 484
The appellate tribunal set aside the ex-parte order of the Commissioner and remanded the matter for fresh hearing. The appellant agreed to let the Department retain the deposited amount. The Commissioner was directed to hear the appeal within two months after giving a one-month notice. The interlocutory order's observations on the case's merits are not binding. The appeal was allowed by way of remand.
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2002 (5) TMI 483
The Appellate Tribunal CEGAT, New Delhi rejected a request for transfer of a case to Kolkata by M/s. Hukumchand Jute & Industries Ltd. as the appellant, Revenue, was not interested in the transfer. The case is scheduled for regular hearing on 10-7-2002.
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2002 (5) TMI 482
The Appellate Tribunal CEGAT, New Delhi heard a case regarding the valuation of imported goods. The appellant's counsel requested early hearing due to the recurring nature of the issue. The tribunal agreed and scheduled the case for a hearing on 23-5-2002. (2002 (5) TMI 482 - CEGAT, New Delhi)
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2002 (5) TMI 447
Issues:
1. Interpretation of the term "industrial stapling machine" under the Customs Act, 1962.
2. Compliance with the relevant policy on import of stapling machines.
3. Application of the REP license and its exceptions.
4. Determination of the main criteria for considering a stapling machine as industrial.
Issue 1 - Interpretation of the term "industrial stapling machine":
The Tribunal referred questions to the High Court regarding the classification of a stapling machine as industrial. The High Court analyzed the term "industrial" in the context of its usage and concluded that an industrial stapling machine is one used by manufacturers in garment production. The court emphasized that the machine's usage in the industry is crucial for classification.
Issue 2 - Compliance with relevant policy on import of stapling machines:
The High Court examined the prohibition on importing stapling machines under Appendix I and the exception for industrial stapling machines under the REP license. It clarified that the term "industrial" implies usage in the industry or capability for industrial use. The court highlighted that the import must align with the purpose of the REP license and the manufacturing process.
Issue 3 - Application of the REP license and its exceptions:
The court scrutinized the provisions of the REP license and the Customs Tariff Act to determine the eligibility of a stapling machine for import. It emphasized that the use of the machine in manufacturing garments and packaging was a significant factor in considering it as an industrial stapling machine under the policy.
Issue 4 - Determination of main criteria for considering a stapling machine as industrial:
The High Court deliberated on the main criteria for categorizing a stapling machine as industrial. It highlighted the importance of the machine's usage in garment manufacturing, specifically in packaging garments for export. The court emphasized that the manufacturer's need for the machine in the production process was a key factor in classifying it as industrial.
In conclusion, the High Court ruled in favor of the importer, stating that the decision of the Tribunal regarding the stapling machine being industrial was justified. The court upheld the manufacturer's right to import the stapling machine for garment production, emphasizing the machine's integral role in the manufacturing process. The Revenue was directed to pay costs to the importer as per the court's decision.
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2002 (5) TMI 446
The case involved a dispute regarding the deduction of discounts on pharmaceutical products sold to distributors. The tribunal upheld the department's decision to limit the discount to 10% for all distributors, rejecting the appellant's claim for a higher discount for chief distributors. The appeal was dismissed based on a previous order with similar findings.
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2002 (5) TMI 445
The appeal sought waiver of pre-deposit and stay of recovery of Rs. 50,000 service tax. The applicants claimed no duty incidence on customers due to lack of credit issuance. Tribunal found no strong case on merits or financial hardship, rejecting the application and ordering deposit within eight weeks. Compliance to be reported by 1-8-2002.
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2002 (5) TMI 444
Issues:
1. Duty payment under protest and time bar under Section 11B of the Central Excise Act, 1944.
2. Rejection of refund claim by Dy. Commissioner and Commissioner (Appeals).
Analysis:
1. The appellants manufactured 'Inked Ribbon' and paid duty on it from February, 97 to September, 97, contesting the levy. CEGAT held that the process of putting inked ribbon in spools/cassettes/cartridges did not amount to manufacture. A refund claim of Rs. 1,06,349/- was filed on 26-11-99, asserting payment under protest. Dy. Commissioner rejected the claim citing time bar under Section 11B, due to the absence of a specific letter of duty paid under protest as required by Rule 233B(1) of the Central Excise Rules, 1944.
2. The party's appeal against the rejection was dismissed by Commissioner (Appeals). In the subsequent appeal, it was argued that the duty was paid under protest, supported by a letter dated 18-2-97 addressed to the Supdt. of Central Excise Range-I, stating the registration was sought under protest due to a stay granted by CEGAT. This letter fulfilled the requirements of Rule 233B(1), indicating duty payment under protest from February, 97 to September, 97. Consequently, the refund claim was deemed not time-barred.
3. The Appellate Tribunal set aside the Commissioner (Appeals)'s order, allowing the appeal with consequential relief. The letter submitted by the appellants sufficiently demonstrated the duty payment under protest, thereby overturning the rejection of the refund claim.
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2002 (5) TMI 443
Issues:
1. Confirmation of demand of Customs duty and confiscation of goods.
2. Imposition of penalty under Section 112 of the Customs Act.
3. Logging of export in DEEC book.
Confirmation of demand of Customs duty and confiscation of goods:
The appeal was filed by M/s. Suncity Art Exporters against the Order-in-Original confirming the demand of Customs duty and confiscation of goods imported by them. The Commissioner of Customs had imposed a fine for redemption of the confiscated goods. The Tribunal noted that the goods imported were not as per the description in the advance license for Paraffin Wax. However, considering that there was no mala fide intention and the goods were imported as advised by foreign buyers, the Tribunal set aside the penalty imposed on the appellants. The Tribunal confirmed the demand of differential Customs duty but set aside the penalty and confiscation of goods, following the precedent set in an earlier decision involving the same appellants.
Imposition of penalty under Section 112 of the Customs Act:
The Tribunal, in line with its previous decision involving the same appellants, set aside the penalty imposed by the Commissioner of Customs under Section 112 of the Customs Act. It was observed that the appellants did not have any mala fide intention in declaring the product as Paraffin Wax, and they could have obtained the advance license even for the preparation of Paraffin Wax. The Tribunal considered all relevant facts and the Commissioner's decision not to confiscate the goods, leading to the conclusion that no penalty was imposable on the appellants in this case.
Logging of export in DEEC book:
The appellants requested logging of export in the DEEC book as they had exported the end product out of India. However, the Commissioner of Customs found that the exported goods did not contain Paraffin Wax as required by the DEEC book conditions. As the goods exported contained polishes instead of Paraffin Wax, the Commissioner held that the exported goods were not eligible to be counted towards fulfilling the export obligation or for entry in the DEEC book for logging purposes. The Tribunal upheld the Commissioner's findings regarding the logging of export in the DEEC book, finding no infirmity in the decision.
In conclusion, the Tribunal confirmed the demand of Customs duty but set aside the penalty and confiscation of goods, following the precedent set in an earlier decision involving the same appellants. The logging of export in the DEEC book was not allowed due to the discrepancy in the exported goods compared to the requirements of the DEEC book conditions.
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2002 (5) TMI 442
The appellate tribunal upheld the decision regarding the correct classification of moulded plastic wheels under Central Excise Tariff sub-heading 3926.90 as articles of plastic, not under CET sub-heading 8716.00 as parts of trailers. The wheels were found to be of plastic and used for various purposes, leading to the rejection of the appeal.
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2002 (5) TMI 441
Issues:
1. Appeal against decision confirming demand of duty and denying exemption under Notification 175/86.
2. Partnership firm with common partners operating in different states - clubbing of turnover for denial of exemption.
3. Previous Bombay proceedings on denial of exemption under Notification No. 175/86.
4. Legality of adjudicating authority's findings in the present case vis-a-vis Bombay case.
Analysis:
1. The appeal was filed against the decision confirming a duty demand of Rs. 5,37,553 and denying exemption under Notification 175/86 by the Commissioner of Central Excise and Customs, Surat. The appellant, a partnership firm, contested the demand, stating that the Department's claim was time-barred, the firms operated independently, had separate licenses, and there was no material suppression.
2. The contention revolved around whether the turnover of units in Bombay and Vapi could be clubbed for exemption denial. The appellant argued that common partners did not warrant clubbing, emphasizing separate jurisdiction and lack of financial flow evidence. Previous proceedings in Bombay favoring the appellant were cited, highlighting the issue of the adjudicating authority's jurisdiction over the Commissioner (Appeals) order.
3. The effect of previous Bombay proceedings on denying exemption under Notification 175/86 was crucial. The Assistant Collector's order dropping the show cause notice in 1992 for the Bombay unit was upheld by the Collector (Appeals), with no appeal filed by the Department to the Tribunal. The adjudicating authority's attempt to reassess the Bombay case findings was deemed legally incorrect.
4. The Tribunal found the adjudicating authority's attempt to overturn the Collector (Appeals) findings in the Bombay case unjustified, as no appeals were filed against those decisions. The jurisdictional differences between the Goregaon and Vapi units did not empower the Department to disrupt previous favorable rulings. Consequently, the impugned order was set aside, and the appeal was allowed, granting consequential relief.
This detailed analysis highlights the legal intricacies and precedents considered in the judgment, emphasizing the importance of jurisdictional boundaries and the binding nature of previous decisions in similar cases.
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2002 (5) TMI 439
Issues:
1. Valuation of goods - Whether additional consideration received in the form of tooling cost advances should be added to the value of the goods.
Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the valuation of goods by the appellants, who were engaged in manufacturing door lock assemblies for motor vehicles and availing Modvat credit facility. The appellants had received tooling cost advances from purchasers and were issued a show cause notice by the Excise department to pay duty on these advances. The Additional Commissioner dropped a part of the demand but confirmed a significant amount in relation to advances received from one of the purchasers, imposing penalties as well. The Commissioner (Appeals) upheld this decision without providing independent reasons, leading to the Tribunal setting aside the order on the grounds of being non-speaking.
The central issue in this case revolved around whether the additional consideration received as tooling cost advances should be included in the valuation of the goods. The Commissioner (Appeals) failed to adequately address this issue and did not reference relevant case law, such as CCE, Pune v. Dai Ichi Karkaria Ltd., Commissioner of Central Excise, Coimbatore v. Servall Engineering Works Ltd., and Moosa Haji Patrawala Pvt. Ltd. v. CCE, Mumbai/Aurangabad, which discuss the provisions of Section 4 of the Central Excise Act related to valuation. Consequently, the Tribunal concluded that the matter required re-examination by the adjudicating authority in light of the legal principles established in the aforementioned cases.
As a result of the insufficient reasoning provided by the Commissioner (Appeals), the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision after considering the legal precedents and hearing both parties. The Tribunal allowed the appeal by directing a remand for a thorough reevaluation of the valuation issue in accordance with the law laid down in the relevant case law.
This judgment highlights the importance of providing detailed and reasoned decisions in matters of taxation and valuation, emphasizing the need for adjudicating authorities to consider relevant legal principles and case law when determining such disputes.
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2002 (5) TMI 436
The Appellate Tribunal CEGAT, Mumbai upheld the lower appellate authority's decision regarding the import of Tin Mill Black Plate (T.M.B.P.) coils for the manufacture of electrolytic tin plates. The respondents sold a damaged portion of the imported coils, leading to a duty demand and penalty. The Tribunal ruled in favor of the respondents, stating that the damaged coils were intended for the manufacturing process, and the benefit of concessional duty rate applies even if some quantity is unusable. The appeal by the Revenue was rejected.
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2002 (5) TMI 433
The appeals were dismissed for non-compliance with Sec. 129E of the Customs Act, 1962. The appellant argued that duty demand was confirmed on goods under Customs control, so Sec. 129E did not apply. The Tribunal agreed, citing Sec. 62(2) and a previous case. The order of dismissal was set aside, and the appeals were restored. The application for restoration was allowed.
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2002 (5) TMI 431
The appellate tribunal allowed the application for early hearing of an appeal against the suspension of a CHA license due to the appellant's business coming to a standstill. The appeal is scheduled for hearing on 7-6-2002.
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