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Showing 221 to 240 of 686 Records
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2009 (6) TMI 808
Wires and cables manufactured for various aircrafts, satellite launch vehicles and also for various military machinery like battle tanks - Exemption under N/N. 0/97-C.E., dated 1-3-2001 and N/N. 6/2002-C.E., dated 1-3-2002 serial No. 240 - Held that:- Wires and cables can be said to be covered by Sl. No. 8 of the Notification reproduced above since it covers stores also. The exemption is not limited to only parts or equipments but also systems, sub systems, equipments and stores. Therefore, a view can be taken that wires and cables are nothing but consumable stores which are stored and used from time to time as and when required.
Notification No. 64/95 cannot be treated on Par with the other two notifications and therefore clearances under this notification have to be treated separately and when we look at the heading under Sl. No. 8 equipment and stores, clearly wires and cables cannot be considered as systems and sub systems of launch vehicle and systems and sub systems of satellite projects. For clearance under this heading the appellants are required to prove that the item being cleared is a system or sub system of separate launch vehicle or satellite project. There cannot be a general rule in this regard and clearly wires and cables cannot be called as systems and sub systems and therefore are not eligible for the benefit of notification.
Each notification is different and therefore the decisions in respect of one notification cannot be applied to another notification and therefore each has to be treated differently. It is quite clear from the discussion above that appellants are eligible for the benefit of the other two notifications and it is also clear that this does not mean that they are eligible for the benefit of Notification No. 6/2002.
In view of the self contained nature of the notification, the appellants are to be held ineligible for the benefit of Notification No. 6/2002 only.
Appeal allowed in part.
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2009 (6) TMI 807
Penalty on CHA and his employee - mis-declaration of the quantity, quality and value of sub-standard goods - Held that: - penalties were imposed under Section 114 of the Customs Act which provides that any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 113, or abets the doing or omission of such an act, shall be liable for penalty. In the present case, there is no material available on record that the appellants did anything or committed anything in connivance or with the knowledge of the exporter. So, in the facts and circumstances of the case, in our view, the imposition of penalties under Section 114 of the Act are not warranted - there is no material available that the CHA and his employee had any knowledge on the quality, quantity and value of the export goods - penalty set aside.
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2009 (6) TMI 806
Issues involved: Stay petition against Order-in-Original and Order-in-Appeal regarding refund of duty amount, applicability of unjust enrichment doctrine, pre-deposit requirement under Section 35F of the Central Excise Act, 1944.
Stay Petition No. E/S/1676/08:
The petition was filed against the Order-in-Original confirming a demand and penalty imposed by the Commissioner of Central Excise. The applicants had availed suo motu credit of the amount in question, which was later sanctioned as a refund but to be credited to the Consumer Welfare Fund after recovery from the applicants. The Tribunal examined the facts of the case and directed the applicants to pre-deposit the demanded amount within a specified period, failing which their appeal would be dismissed without further notice.
Stay Petition No. E/S/323/2009:
This petition was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) regarding the refund of duty amount. The Tribunal found that the amount paid by the applicants was not a pre-deposit under Section 35F of the Central Excise Act, 1944, but a payment of duty as per the High Court's directions. The doctrine of unjust enrichment was held to be applicable, and the applicants were directed to pre-deposit the demanded sum within a specified timeframe, with the penalty pre-deposit being waived upon compliance.
The Tribunal emphasized the importance of complying with the pre-deposit requirement and highlighted the need for applicants to demonstrate that the burden of the duty amount was not passed on to consumers to avoid unjust enrichment. The legal precedent regarding the doctrine of unjust enrichment was cited to support the decision. The Tribunal dismissed the second stay petition as it became infructuous due to the decision on the first petition, and directed the amount to be held by the Department pending appeal disposal.
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2009 (6) TMI 805
Issues:
1. Stay application against Order-in-Original dated 12-12-2008 confirming duty, interest, and penalty.
2. Examination of technical notes, certificates, and reports by the Commissioner.
3. Classification and excisability of the Fired Heater component.
4. Applicability of legal judgments cited by the Advocate.
5. Decision on pre-deposit waiver and penalty.
Analysis:
1. The stay application was filed against the Order-in-Original confirming duty, interest, and penalty. The Commissioner reduced the initial demand from Rs. 52,36,875 to Rs. 5.52 lakhs after examining technical documents and reports. The Commissioner concluded that the Special Cut Naphtha project was not chargeable to duty, but the components fabricated at the site, specifically the Fired Heater, were excisable under CETA '85 and leviable to duty at 15.75%.
2. The Commissioner meticulously reviewed the technical note, Chartered Engineer's certificate, and site visit report to determine the excisability of the components. The Commissioner found that the Fired Heater, fabricated at the site as an independent equipment, was distinct from its inputs and commercially identifiable. Citing a previous Tribunal judgment, the Commissioner classified the Fired Heater under a specific category and imposed duty accordingly.
3. The Advocate cited Supreme Court and Tribunal judgments on different subjects, but the Tribunal emphasized that the case at hand pertained to the excisability of the Fired Heater. The Tribunal highlighted that each case must be evaluated on its own merits, and the Commissioner's decision was based on a thorough examination of the matter, making the cited judgments not directly applicable to the present case.
4. Considering the facts and circumstances, the Tribunal directed the applicants to pre-deposit the duty amount within six weeks, with the penalty pre-deposit waived upon compliance. Failure to adhere to the directions would lead to the vacation of the stay and dismissal of the appeal without further notice. The Tribunal's decision was pronounced on 24-6-2009, ensuring a clear timeline for compliance and consequences of non-compliance.
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2009 (6) TMI 804
Issues involved:
The main issue in this case is whether refund of surplus credit is admissible under Rule 5 of the Cenvat Credit Rules to a manufacturer who is not a direct exporter of the goods.
Comprehensive Details:
Facts and Background:
The appellants are involved in the manufacture of processed textile fabrics using grey textile fabric as their main raw material. They availed cenvat credit of duty paid on inputs used in the manufacture of processed fabrics. The processed fabrics were supplied without payment of duty to various entities for the manufacture of readymade garments for export, under Notification No. 43/2001-C.E. (N.T.). The appellant sought refund of the Cenvat credit of duty on inputs used in the manufacture of processed fabrics which were cleared for export without payment of duty.
Appellant's Argument:
The appellant contended that as per Rule 5 of the Cenvat Credit Rules 2002, they were eligible for cash refund of the unutilized credit since the processed fabrics were used as intermediate products by garment manufacturers for export, without claiming drawback or input duty rebate. Citing relevant judgments, the appellant argued that they met the conditions for refund under Rule 5.
Respondent's Defense:
The learned DR defended the impugned order and cited a Tribunal judgment in support of the Commissioner (Appeals)'s decision.
Judgment:
After considering the submissions from both sides, the Tribunal referred to previous decisions in similar cases. It noted that the issue of refund of surplus credit to a manufacturer not directly exporting goods was addressed in previous judgments. The Tribunal found that the appellant met the criteria for refund under Rule 5 of the Cenvat Credit Rules, as the exports were not made under drawback or rebate claims. Relying on precedent, the Tribunal held that the impugned order was not sustainable and set it aside, allowing the appeals.
Conclusion:
The Tribunal ruled in favor of the appellant, allowing the refund of surplus credit under Rule 5 of the Cenvat Credit Rules, as the conditions for refund were met based on the nature of exports and utilization of inputs in the manufacturing process.
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2009 (6) TMI 803
Issues:
1. Whether the drilling rigs mounted on motor vehicles chassis manufactured and cleared during a specific period are covered under a particular notification for duty imposition.
2. Whether the applicants are entitled to the benefit of a specific entry for drilling rigs or a general entry for special purpose motor vehicles under a notification.
3. Whether the applicants have satisfied the conditions for availing the benefit of a specific entry under the notification.
Analysis:
1. The judgment dealt with the issue of duty imposition on drilling rigs mounted on motor vehicles chassis manufactured and cleared during a specific period. The demand for duty was confirmed based on the classification of the drilling rigs under Heading 87.05 of the First Schedule to the Central Excise Tariff Act, 1985. The rejection of the claim for the benefit of NIL rate of duty under a specific entry was due to the classification under a different serial number of the notification. The condition of not taking credit of duty paid on the chassis and compressor was not in question.
2. The Tribunal analyzed the classification of the goods under Heading 87.05, which covers special purpose motor vehicles, excluding those designed for transporting persons or goods. The Tribunal observed that mobile drilling derricks fall under this category. The applicants argued that the goods should be covered by a specific entry (Sl. No. 217) for special purpose motor vehicles, while the Revenue contended that a different specific entry (Sl. No. 198) for drilling rigs applied. The Tribunal referred to legal precedents and held that when an item falls under different serial numbers of a notification, the assessee is entitled to avail the benefit of the serial number most beneficial to them.
3. The Tribunal found that the applicants had satisfied the conditions applicable to Sl. No. 217 of the notification. The condition required duty payment on the chassis and compressor, which the applicants claimed to have fulfilled. The Revenue did not rebut this claim. Based on this analysis, the Tribunal concluded that the applicants had made out a strong prima facie case for unconditional waiver of predeposit of duty, interest, and penalties. Consequently, the Tribunal dispensed with the predeposit and stayed the recovery pending the appeals.
This detailed analysis of the judgment showcases the Tribunal's interpretation of the relevant legal provisions, classification of goods under specific entries, and the conditions necessary for availing benefits under notifications. The decision underscores the importance of fulfilling conditions and applying legal principles to determine the most advantageous position for the assessee in matters of duty imposition and exemptions.
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2009 (6) TMI 802
Issues involved: Interpretation of condition in Notification No. 40/2006-Cus regarding availing of Cenvat Credit for imported goods against duty free import authorization.
In the present case, the appellants availed benefit of Notification No. 40/2006-Cus for imports against duty free import authorization, subject to the condition that Cenvat Credit under Cenvat Credit Rules, 2004 for the imported materials has not been availed. The Revenue contended that since the appellants had availed Modvat Credit for locally manufactured goods, they should be denied the benefit of the notification. The dispute centered around the interpretation of the condition regarding availing of credit for imported goods only.
The appellants argued that the condition of non-availment of credit applied only to materials imported against the authorization, not to locally procured goods for which they had taken credit. They also pointed out that denial of the Customs notification, not recovery of the credit, should be the consequence if a condition was not met. The issue was whether the appellants fulfilled the condition of the notification by not availing credit for the imported goods.
The Tribunal referred to a letter from the Dy. Director General of Foreign Trade and a decision of the Bangalore Bench of the Tribunal in a similar case, both supporting the view that availing credit for domestically procured inputs did not disqualify the appellants from the benefit of the notification. Relying on this precedent, the Tribunal ruled in favor of the appellant, allowing the appeals and granting consequential relief.
(Separate Judgment by Judge: None)
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2009 (6) TMI 801
Issues:
Import of wastepaper under concessional rate of duty, submission of end-use certificate, destruction of goods by fire, demand for differential duty, interpretation of exemption notification.
Analysis:
The appeal was filed against an order passed by CC & CE (Appeals), Visakhapatnam, regarding the import of 235.807 MTs of wastepaper under a concessional rate of duty. The notification required the submission of an end-use certificate, which was provided for a quantity of 185.236 MTs, while the remaining 50.57 MTs were destroyed by fire in Kakinada. The Revenue demanded differential duty for the destroyed quantity, leading to the appellants approaching the Commissioner (Appeals) for relief, which was denied. The appellants then appealed to the Tribunal.
The appellant argued that the end-use condition of the notification should not apply due to the goods being lost in a fire accident, citing relevant case laws to support their position. The Department, represented by the ld. DR, contended that the end-use certificate was mandatory for availing the exemption notification, and in its absence, duty was rightfully demanded.
Upon reviewing the case records, the Tribunal noted that the goods were imported duty-free under a specific notification. It was established that no end-use certificate could be produced for the 50.571 MTs destroyed by fire. The Tribunal referred to previous case law where goods intended for specific use and destroyed by fire were considered to fulfill the end-use condition, leading to no duty being demanded. The Tribunal highlighted the principle that duty cannot be imposed on materials intended for use in a factory when destroyed by fire accident, as seen in previous decisions. Consequently, the Tribunal set aside the demand for duty, allowing the appeal in favor of the appellants.
In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that the destruction of goods by fire accident exempted them from the duty demand, as the intention to use for the specified purpose was deemed sufficient, in line with previous legal precedents.
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2009 (6) TMI 800
Issues Involved:
Interpretation of provisions of the Sugar Export Promotion Act, 1958 regarding the levy and collection of Additional Excise Duty, specifically in relation to interest payment and penalty imposition.
Summary:
Issue 1: Interest Payment on Delayed Cess Payment
The case involved a dispute regarding the confirmation of interest on delayed payment of Cess under the Sugar Export Promotion Act, 1958. The original adjudicating authority confirmed the interest under Section 11AB of the Central Excise Act, 1944, while the Commissioner (Appeals) upheld the interest but set aside the penalty imposed. The appellant argued that the Act of 1958 did not specifically mention interest provisions, and therefore interest should not be confirmed. The appellant relied on legal precedents to support the argument that interest provisions must be explicitly provided for. The JDR, however, contended that interest under Section 11AB is applicable for delayed payment of duty, irrespective of reasons for delay. The Tribunal analyzed the provisions of the Act and relevant legal precedents, ultimately agreeing with the appellant that interest confirmation was unjust and set it aside, allowing the appeal.
Issue 2: Application of Central Excise Provisions
The Tribunal compared the provisions of the Sugar Export Promotion Act, 1958 with the Additional Duties of Excise (Goods of Special Importance) Act, 1957, which had similar language regarding the application of Central Excise provisions. Legal precedents were cited to argue that penal provisions must be explicitly provided for in the Act itself. The Tribunal concluded that since the Act of 1958 contained specific penalty provisions but lacked explicit interest provisions, confirming interest under Section 11AB was not justified. The Tribunal held that the Act did not provide the necessary jurisdiction or authority for interest confirmation, and therefore set aside the interest payment.
Conclusion:
The Tribunal ruled in favor of the appellant, setting aside the confirmation of interest on delayed Cess payment under the Sugar Export Promotion Act, 1958. The decision was based on the lack of explicit provisions in the Act for interest payment, as well as the presence of specific penalty provisions without corresponding interest provisions. The appeal was allowed, and the interest confirmation was deemed unjust and uncalled for.
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2009 (6) TMI 799
Issues:
1. Appeal against order-in-appeal for enhancing penalty under Rule 173Q(1).
2. Interpretation of Rule 173Q(1) regarding minimum penalty imposable.
3. Consideration of upper limit of penalty under Rule 173Q(1).
Analysis:
1. The appeal was filed by the Revenue against the order-in-appeal dismissing the Department's appeal for enhancing the penalty imposed on the respondent under Rule 173Q(1) to Rs. 5,000. The Department argued that the minimum penalty imposable for contraventions covered under Clauses (a), (b), and (c) of Rule 173Q(1) is Rs. 5,000. The Departmental Representative cited a previous Tribunal's order to support this contention.
2. The Tribunal analyzed Rule 173Q(1) of the Central Excise Rules, 1944, which states that the penalty imposable for contraventions mentioned in the rule is "an amount not exceeding three times the value of the excisable goods or Rs. 5,000, whichever is greater." The Tribunal noted that the rule specifies an upper limit of the penalty that can be imposed for such contraventions. The Tribunal clarified that the rule does not mandate a minimum penalty of Rs. 5,000 for contraventions under Clauses (a), (b), and (c) as argued by the Department. The Tribunal referred to a previous case to support its interpretation.
3. The Tribunal emphasized that the wording of Rule 173Q(1) does not indicate a fixed minimum penalty of Rs. 5,000 for contraventions under specific clauses. The Tribunal highlighted that the rule sets an upper limit for the penalty, and the imposition of the penalty should be based on the circumstances of each case. The Tribunal dismissed the Revenue's appeal, stating that the Department's argument would have been valid if the rule had specified a fixed penalty amount rather than an upper limit. The Tribunal's decision was in line with previous rulings on similar matters.
This analysis provides a detailed overview of the issues involved in the legal judgment, the arguments presented by the parties, and the Tribunal's interpretation of the relevant legal provisions.
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2009 (6) TMI 798
Issues involved:
Whether duty short paid on certain products can be adjusted against duty excess paid on certain other products.
Analysis:
The stay petition was filed against the Commissioner's order confirming a duty demand, interest, and penalty. The main issue was whether duty short paid on some products could be set off against duty excess paid on others. The applicants cited various case laws supporting their claim for such adjustments. However, the Learned SDR referred to a Tribunal judgment stating that no adjustment could be granted if the duty excess paid had been passed on to the buyer, citing the doctrine of unjust enrichment.
The Tribunal analyzed the case laws cited by both parties and concluded that adjustment could only be allowed if the excess duty paid had not been passed on to the buyers and the assessee was entitled to a refund. In this case, the excess duty paid had been taken into account in the valuation of finished goods, indicating it had been passed on to the buyers. The Assistant Commissioner rejected the refund claim, stating that the applicants failed to prove that they bore the burden of the excess duty paid. The Tribunal held that duty short paid could not be adjusted against a non-existent refund claim, making the applicants liable to pay the duty short paid.
The Tribunal highlighted that the principle of unjust enrichment applied to refund claims arising from finalization of provisional assessments. It cited another case where the doctrine of unjust enrichment was deemed applicable to all refund cases. Considering these precedents, the Tribunal directed the applicants to pre-deposit the demanded amount within a specified period, failing which their appeal would be dismissed without further notice.
In conclusion, the Tribunal found that the applicants did not present a strong case for a complete waiver of the pre-deposit. They were instructed to comply with the pre-deposit requirement, with the penalty pre-deposit being dispensed with upon timely payment. Failure to adhere to the directions would lead to the dismissal of their appeal.
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2009 (6) TMI 797
Issues:
Waiver of pre-deposit of central excise duty and penalty based on the contention that the appellant is not the manufacturer of the goods in question but that the independent job workers were the manufacturers.
Analysis:
The judgment by the Appellate Tribunal CESTAT, Chennai, involved the consideration of an application for the waiver of pre-deposit of central excise duty and penalty amounting to Rs. 1,32,05,174/- against the appellant, who is the proprietor of two entities involved in the manufacturing of scaffolding, shuttering, and propping materials during the period 2004-05 to 2006-07. The appellant contended that the manufacturing activities were carried out through independent job workers after procuring purchase orders from customers, and the proprietary concern did not possess the necessary machinery or facilities for manufacturing the items in question.
The Tribunal found the appellant's contention prima facie acceptable based on several factors. Firstly, there was no panchnama drawn up for machinery manufacture for goods like drilling machines, shuttering machines, welding machines, and cutting machines. Additionally, the adjudicating authority noted a lacuna in the investigation regarding the establishment of the presence of any machinery on the applicant's premises. Furthermore, the statement of the applicant, relied upon by the Revenue, indicated that the work was indeed done through job workers, some of whom were not traceable. Only a few job workers were available and produced for cross-examination before the Commissioner.
Considering these factors, the Tribunal concluded that the appellant had made a strong case for unconditional waiver of pre-deposit of duty and penalty. The Tribunal determined that the appellant was not the actual manufacturer of the goods in question, and it was the independent job workers who were responsible for manufacturing the items. Therefore, the Tribunal granted the waiver of pre-deposit of duty and penalty, and stayed the recovery pending the appeal. The order was pronounced and dictated in the open court, providing relief to the appellant based on the established facts and contentions presented during the proceedings.
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2009 (6) TMI 796
Issues:
1. Condonation of delay in filing appeal against Order-in-Appeal.
2. Stay of Commissioner (Appeals)'s order.
Analysis:
1. The application before the Appellate Tribunal concerned the condonation of a 25-day delay in filing an appeal against Order-in-Appeal No. 80/RPR-I/2008 dated 18-7-2008 passed by the Commissioner of Central Excise, Raipur, along with a request for a stay of the Commissioner (Appeals)'s order.
2. The Learned DR representing the Appellant argued that there was no delay at any stage in filing the appeal. The matter had been referred to the Chief Commissioner due to conflicting decisions, and the appeal was filed after necessary approvals. On the other hand, the Counsel for the Respondent contended that the reasons provided for the delay were insufficient. Referring to a previous Tribunal's order, it was argued that the physical locations of the Commissioners could not justify the delay in filing the appeal.
3. The Tribunal observed that the Commissioner (Appeals)'s order was received on 21-7-2008, and despite early directions from the Chief Commissioner on 2-7-2008, the appeal proposal was only put up on 10-10-08 and approved on 16-10-08. The Tribunal found the delay in filing the appeal unsatisfactorily explained. Citing a Supreme Court case, it highlighted that while the length of delay may not be crucial, the explanation for delay must be acceptable. In this case, the Tribunal deemed the explanation unsatisfactory and dismissed the application for condonation of delay, the stay application, and the appeal itself.
4. Therefore, the Tribunal, after considering submissions from both sides and reviewing the records, concluded that the 25-day delay in filing the appeal was not satisfactorily explained. Relying on legal precedent, the Tribunal emphasized the importance of an acceptable explanation for delays in filing appeals. As the explanation provided in this case did not meet this standard, the Tribunal dismissed the application for condonation of delay, the stay application, and the appeal itself.
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2009 (6) TMI 795
Issues involved: Classification dispute, refund claim rejection, entitlement to refund of duty.
Classification dispute: The appellants were engaged in the manufacture of HDPE Strips and Tapes, and a dispute arose regarding the classification of the same. Proceedings were initiated against them, leading to an order by the Assistant Commissioner, which was later remanded for de-novo adjudication by the Commissioner (Appeals). The Assistant Commissioner confirmed a duty demand of Rs. 5,08,947.70, which was not disputed by the appellants. Subsequently, the appellants filed a refund claim based on a Supreme Court judgment, which was rejected by the authorities, leading to the present appeal.
Refund claim rejection: The main issue in the appeal was whether the appellants were entitled to a refund of the duty deposited by them when the order confirming the duty demand had not been challenged. The appellants argued that the duty was paid under protest, justifying their claim for a refund.
Entitlement to refund of duty: The Tribunal found no merit in the appellants' contention. It emphasized that once an order confirming a duty demand is passed and not appealed against, it attains finality. The appellants had the opportunity to appeal the Assistant Commissioner's order but did not do so. The Commissioner (Appeals) also supported this view, stating that the duty payment without protest made the matter final, and reliance was placed on a previous Tribunal decision reinforcing the finality of unchallenged orders.
In conclusion, the Tribunal rejected the appeal, finding no merits in the arguments presented by the appellants.
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2009 (6) TMI 794
Issues: Rectification of mistake in the order due to incorrect date of death of the sole proprietor.
In this case, the appellant filed an application for rectification of mistake in the order as it incorrectly stated the date of death of the sole proprietor. The appellant's representative highlighted that the order mentioned the proprietor's death as August 2008, whereas the actual date was 13-8-1999, supported by a death certificate submitted with the appeal papers. The representative admitted the oversight in not bringing this fact to the attention of the Original Adjudicating Authority or the appellate authority before the orders were passed.
The learned Departmental Representative argued that since the fact of the proprietor's death was not previously disclosed to the authorities, the appeal should not be considered, and the Tribunal's decision should stand valid. However, upon hearing both sides, the judge acknowledged the mistake in the order regarding the date of death of the proprietor, which impacted the conclusions drawn. The judge determined that the legal issues and other aspects were not considered by the lower authorities due to the oversight in disclosing the death of the proprietor. Consequently, the judge allowed the application for rectification of mistake and remanded the matter back to the Original Adjudicating Authority for reconsideration. The appellants were granted the opportunity to present their case afresh before the adjudication.
This judgment emphasizes the importance of accurate information disclosure in legal proceedings and the consequences of failing to bring significant facts to the attention of the authorities. The rectification of mistakes in orders is crucial to ensure fair and just decisions, highlighting the need for thorough consideration of all relevant details in legal proceedings.
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2009 (6) TMI 793
The judgement by the Appellate Tribunal CESTAT, CHENNAI, from 2009 (6) TMI 793, involved a case where the appellants operated under the Cenvat credit scheme and exported inputs under bond. The lower authorities demanded an amount of Rs. 28,196 under Rule 14 of the Cenvat Credit Rules, 2004, along with interest and penalty. The appellants argued that there was no bar for a manufacturer to remove inputs for export under bond, citing a Board's letter. They also referenced a Tribunal decision that vacated a similar demand for duty on exported inputs. After reviewing the case records and submissions, the judge found that the appellants had a prima facie case against the demand and penalty. Consequently, the judge ordered a waiver of pre-deposit and a stay of recovery of the demand and penalty pending the appeal decision. The order was dictated and pronounced in open court.
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2009 (6) TMI 792
Issues involved:
Dispute over deemed credit availed by the assessee, calculation of deemed credit under Rule 9A of the Cenvat Credit Rules, 2002, misdeclaration of input stock value, difference between deemed credit actually taken and due, applicability of sub-rule (3)(a) and (b) of Rule 9A, invocation of notification 35/03-C.E. (N.T.), penalty imposition under Section 11AC of the Central Excise Act.
Detailed Analysis:
1. Deemed Credit Dispute:
The dispute in this case revolves around the deemed credit availed by the assessee in April 2003. The department sought to recover Rs. 1,50,517/- from the assessee as deemed credit, which was contested by the party. The original authority confirmed the demand and imposed a penalty of Rs. 10,000/-. The main issue is the discrepancy between the deemed credit actually taken by the assessee and the amount due.
2. Calculation under Rule 9A:
Under Rule 9A of the Cenvat Credit Rules, 2002, the appellants were entitled to avail deemed credit on inputs in stock or in process as on 31-3-2003. The method of calculating deemed credit was provided under sub-rule (3), with different clauses for inputs in stock, under process, and in finished products. The dispute arose from the misdeclaration of input stock values, leading to a demand for the differential duty amount.
3. Applicability of Sub-Rules (3)(a) and (b):
The case involved a debate on whether the deemed credit should be calculated under sub-rule (3)(a) or (b) of Rule 9A. The Revenue claimed that the appellants misdeclared values to claim higher deemed credit. The department followed the procedure under clause (a) of sub-rule (3), while the appellants argued for clause (b). The correct application of the sub-rules was crucial in determining the admissible deemed credit.
4. Invocation of Notification 35/03-C.E. (N.T.):
Both parties chose to follow the procedure outlined in Notification 35/03-C.E. (N.T.) for determining the admissible deemed credit. However, it was observed that clause (b) of sub-rule (3) was erroneously invoked by the appellants. The lower appellate authority held that clause (a) was applicable, and the department's procedure under the notification was correct. The notification's applicability was crucial in the calculation of deemed credit.
5. Penalty Imposition:
The imposition of a penalty under Section 11AC of the Central Excise Act was a consequential aspect of the dispute. The penalty of Rs. 10,000/- was upheld in the adjudication, adding a financial consequence to the deemed credit issue. The dismissal of the appeal meant the penalty stood, emphasizing the seriousness of adherence to the rules and correct declarations.
In conclusion, the judgment upheld the department's decision regarding the deemed credit dispute, emphasizing the correct application of Rule 9A and the relevant sub-rules. The invocation of the notification and adherence to the prescribed procedures were crucial in determining the admissible deemed credit. The penalty imposition highlighted the consequences of non-compliance with the statutory provisions, underscoring the importance of accurate declarations and adherence to legal requirements.
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2009 (6) TMI 791
Issues:
1. Delay in payment of duty under Rule 8 of the Central Excise Rules, 2006 (CER).
2. Utilization of Cenvat credit for payment of duty.
3. Imposition of penalty under Rule 25 of the CER.
Analysis:
1. Delay in Payment of Duty: The appellants, engaged in manufacturing iron and steel castings, paid duty for July 2007 on 12th September 2007 instead of the prescribed date of 5th August 2007 under Rule 8 of CER. They utilized Cenvat credit for payment instead of debiting the PLA for goods removed during 5-9-07 to 12-9-07. Subsequently, they paid the amount from PLA on 18-12-07 with interest. The original authority appropriated the duty, interest, and imposed a penalty of Rs. 1,00,000 under Rule 25 of CER, 2002.
2. Utilization of Cenvat Credit: During the appeal, it was argued that no penalty could be imposed under Rule 25 of CER for the violation. The appellants cited precedents like Saurashtra Cement Ltd. and Condor Power Products P. Ltd. to support their case. It was contended that Rule 27 of CER, which allows a maximum penalty of Rs. 5,000, was more applicable. The Tribunal considered the violation of utilizing Cenvat credit instead of debiting the PLA and the subsequent payment of duty and interest. Relying on the Saurashtra Cement Ltd. case, the Tribunal held that the penalty under Rule 25 was not sustainable. Instead, a maximum penalty of Rs. 5,000 under Rule 27 CER was deemed justified.
3. Imposition of Penalty under Rule 25: The Tribunal analyzed the nature of the violation and the intent behind the delay in payment of duty. It noted that the appellants had disclosed the transactions in their returns and attributed the delay to financial crises. The Tribunal emphasized that there was no intention to evade duty payment, and the penalty under Rule 25 was not warranted. Following the precedent set in Saurashtra Cement Ltd., the Tribunal reduced the penalty to Rs. 5,000, allowing the appeal in part.
In conclusion, the judgment addressed the issues of delay in duty payment, utilization of Cenvat credit, and the imposition of penalty under Rule 25 of the CER. It emphasized the importance of considering the circumstances, intent, and relevant rules in determining the appropriate penalty, ultimately reducing it to Rs. 5,000 based on the applicable provisions and precedents.
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2009 (6) TMI 790
Refund - Cenvat/Modvat - whether a claim for refund of unutilized CENVAT Credit availed by the assessee under Rule 5 of the Cenvat Credit Rules, 2004 is liable to be allowed on the ground of closure of their factory? - Held that: - refund allowed.
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2009 (6) TMI 789
Issues:
Assessment under Section 4A of the Central Excise Act based on MRP printed on offer packs, differential duty demand, penalty imposition, interpretation of the concept of levying excise duty, applicability of Jayanti Food Processing case, goods not intended for retail sale, circular issued by CBEC on items supplied free with another item as a marketing strategy.
Analysis:
The case involved the assessment of shaving cream under Section 4A of the Central Excise Act due to the presence of a printed MRP of Rs. 15 on offer packs, despite the assessable value being declared at Rs. 2.50 per unit under Section 4. The appellant had cleared the product as an offer pack, leading to a demand of Rs. 16,85,520 as differential duty, along with a penalty. The Commissioner (Appeals) allowed the appeal filed by the respondents, prompting the Revenue to appeal the decision.
The learned SDR argued that excise duty should be levied based on the price charged to customers, emphasizing that the ultimate customer had to pay Rs. 15 for the pack when purchasing Ayurvedic Oil. He contended that the appellant's actions were aimed at avoiding correct excise duty payment by deliberately clearing shaving cream as offer packs. On the other hand, the appellant's advocate referred to the Jayanti Food Processing case, highlighting that the shaving cream was not sold separately but provided as a free offer with Ayurvedic Oil, similar to the scenario in the Supreme Court decision regarding mineral water bottles not intended for resale.
Upon considering the arguments, the Tribunal noted that the issue was covered by the Supreme Court's decision in the Jayanti Food Processing case. The goods in question were not meant for retail sale but were supplied in bulk as free offers to consumers. Additionally, reference was made to a Circular issued by the CBEC, stating that items supplied free with another item as a marketing strategy do not require an MRP to be printed. Given the alignment of the case with the Circular and the Supreme Court ruling, the Tribunal found no merit in the Revenue's appeal and consequently rejected it.
In conclusion, the Tribunal upheld the Commissioner (Appeals)' decision, emphasizing that the shaving cream packs were not intended for retail sale and were provided as free supplies to consumers. The judgment highlighted the relevance of the Supreme Court precedent and the CBEC Circular in determining the applicability of excise duty in cases involving items supplied free with other products as part of a marketing strategy.
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