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Showing 241 to 260 of 781 Records
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2009 (12) TMI 829
Clandestine removal - excess unaccounted stock - Held that: - The excess stock found was 12,100 Kgs. of PVC Pipes and compared to the stock as per record, which was 56,805 Kgs. The belated explanation offered for excess stock is not acceptable. It is a clear case of improper maintenance of accounts - However, the charge of attempted clandestine removal cannot be upheld as there was no evidence about such attempt and that there was no evidence of clandestine removal in the past relied upon - while upholding confiscation, the quantum of redemption fine and penalty reduced - appeal allowed - decided partly in favor of assessee.
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2009 (12) TMI 828
Liability of interest - case of Revenue is that the determination of duty has taken effect in January and February itself and therefore, due to delay in payment of duty the assessees are liable to pay interest - Held that: - The relevant date for commencement of time the interest would be from the date the duty is determined if not paid within three months. Once there be an order, setting aside the entire order of determination there is no ascertained duty payable.
In the instant case, therefore, though there was original order passed on 14th June, 1993 that was set aside on 14th July, 2000. The matter was before the A.O., for fresh determination on which an order came to be passed on 22nd March, 2002 and consequently the duty came to be ascertained on 22nd March, 2002. Duty was paid on 17th July, 2002. Once the duty was ascertained on 22nd March, 2002 no interest could have been demanded under sub-section (1) of Section 11AA in view of sub-section (2) as inserted in Section 11AA on 11th May, 2001.
The assesses are not liable to pay interest - appeal dismissed - decided against Revenue.
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2009 (12) TMI 827
Issues involved: Misdeclaration of value in import of computer parts, rejection of transaction value, confiscation of goods, imposition of penalty.
Summary:
1. The case involved M/s. Y2K International importing Mother Boards and Daughter Boards at a declared value lower than contemporaneous import prices. Investigation revealed consistent misdeclaration of value in multiple consignments. The importers defended the declared value as per Section 14 of the Customs Act, 1962.
2. A show-cause notice proposed rejection of transaction value, fixation of unit value for Mother Boards and Daughter Boards, and demanded differential duty. The Commissioner accepted declared values for some consignments but held others liable for misdeclaration, imposing penalties on the importer and partners.
3. The Appellate Tribunal rejected the importers' argument that transaction value could not be rejected without specific circumstances. It found the declared price did not reflect the actual market price, citing fluctuating prices, comparable imports, and the apex court decision in Radhey Shyam Ratanlal case.
4. The contention that contemporaneous import prices were not comparable due to quantity and origin was dismissed for lack of evidence. The challenge on time-bar grounds was rejected due to misdeclaration of goods in multiple Bills of Entry.
5. The Tribunal upheld the order of confiscation, re-determination of value, and imposition of penalties but reduced the penalty on one partner. The appeals were partly allowed with a reduction in penalty for one partner.
Judgment: Appeal No. C/249/2002 was dismissed, while Appeal Nos. C/250 & 251/2002 were partly allowed with a reduction in penalty.
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2009 (12) TMI 826
Issues involved:
1. Stay petition for waiver of pre-deposit of interest amount.
2. Dismissal of stay petition due to lack of appearance by the applicant.
3. Disposal of appeal regarding payment of interest on ineligible drawback.
4. Jurisdictional issue related to interest payable on wrongly claimed drawback amount.
Analysis:
1. The judgment pertains to a stay petition seeking waiver of pre-deposit of interest amount. Despite notice, the applicant did not appear. Upon review, it was determined that the issue was narrow, allowing for the disposal of the appeal without the need for a stay petition. Consequently, the stay petition was dismissed for lacking merit.
2. The crux of the case revolves around the payment of interest on an ineligible drawback claimed by the appellant. The appellant had paid the drawback amount but failed to pay the interest, leading to a demand raised by the department. The Revisionary Authority, Government of India confirmed the ineligibility of the claimed drawback and upheld the demand for interest. Notably, there was no evidence of the appellant challenging this order at a higher forum. Subsequently, the Assistant Commissioner calculated and demanded the interest, which prompted the appellant to file an appeal before the Commissioner (Appeals).
3. Upon careful consideration of the submissions and the appeal memo, it was determined that the issue primarily concerned the interest payable on the incorrectly claimed drawback. The tribunal found that it lacked jurisdiction over matters related to drawback issues. As a result, the appeal was deemed not maintainable and dismissed accordingly. Both the stay petition and the appeal were disposed of in line with this decision.
This comprehensive analysis of the judgment highlights the key issues addressed by the tribunal, including the dismissal of the stay petition, the dispute over interest payment on ineligible drawback, and the jurisdictional limitations concerning such matters.
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2009 (12) TMI 825
Issues:
- Disallowance of Cenvat credit on inputs used for galvanisation.
- Imposition of penalties on the respondent company and individuals.
- Recovery of interest on irregularly availed credit.
Analysis:
1. Disallowance of Cenvat credit on inputs used for galvanisation:
The case involved the disallowance of Cenvat credit on inputs used for galvanisation by the respondent's company. The original authority disallowed the credit based on the argument that galvanisation did not amount to manufacture as per a Board's Circular. The Commissioner (Appeals) upheld this disallowance, emphasizing that the inputs were used for a non-manufacturing activity, resulting in non-excisable products. The Tribunal concurred with this decision, stating that credit on inputs used in non-excisable activities is not eligible. The Tribunal also held that interest on irregularly availed credit is recoverable, supporting the original authority's order.
2. Imposition of penalties on the respondent company and individuals:
The original authority imposed a penalty of Rs. 2 lakhs on the respondent company, along with penalties on the Director and authorised signatory. The Commissioner (Appeals) reduced the penalty on the company to Rs. 1,37,277/-, considering the amount already paid before the show cause notice. The Tribunal found the reduction justified and declined the Department's request to enhance the penalty. It noted the lack of rationale for the original penalty amount and upheld the Commissioner's decision. Additionally, the Tribunal found no specific evidence of omission or commission by the Director and authorised signatory, leading to the penalties being set aside by the Commissioner (Appeals) and affirmed by the Tribunal.
3. Recovery of interest on irregularly availed credit:
Regarding the recovery of interest on irregularly availed credit, the Tribunal held that once credit is irregularly utilized, interest becomes recoverable. The Tribunal supported the original authority's decision to demand interest along with the disallowed credit amount. This ruling was based on the principle that interest should be levied on credit that was availed and utilized irregularly, emphasizing the importance of compliance with Cenvat credit regulations.
In conclusion, the Tribunal upheld the disallowance of Cenvat credit on inputs used for galvanisation, supported the reduction of penalties imposed on the respondent company, and affirmed the recovery of interest on irregularly availed credit. The decision highlighted the importance of adhering to excise regulations and ensuring proper utilization of Cenvat credit in manufacturing activities to avoid penalties and interest charges.
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2009 (12) TMI 824
Issues involved: Denial of Cenvat Credit on electricity used in residential colony, mines, and jetty; imposition of penalties for the respective periods.
Denial of Cenvat Credit on Electricity Usage:
The appellant's Cenvat Credit on Naptha and Furnace Oil utilized in manufacturing electricity was denied for the electricity used in the residential colony, mines, and jetty. The total demand and penalties were specified for different periods.
Appellant's Arguments:
The appellant's advocate argued that previous Tribunal decisions favored the appellant regarding Cenvat Credit for capital goods used in the jetty, citing the jetty as part of the factory. Reference was made to a Supreme Court decision regarding Cenvat Credit for explosives and oils used in mines. It was acknowledged that a proportionate Cenvat credit reversal was due for the residential colony. Regarding penalties, it was highlighted that previous Tribunal decisions did not impose penalties in similar cases.
Respondent's Arguments:
The SDR relied on a Supreme Court case to argue that electricity used in the jetty was not related to manufacturing and that mines were not part of the factory, thus disqualifying Cenvat Credit. It was alleged that the appellant concealed information about electricity usage in residential colony, mines, and jetty to avoid credit reversal, justifying the penalties and extended period invocation.
Tribunal's Decision:
The Tribunal determined that the jetty was part of the factory, allowing Cenvat Credit for electricity usage. Following the Supreme Court's decision, Cenvat Credit for mines' inputs was approved. However, Cenvat Credit for electricity in the residential colony was disallowed. Penalties were waived based on the Supreme Court's stance on Cenvat Credit Rule amendments and conflicting tribunal decisions.
Final Verdict:
The demand for duty related to Cenvat Credit on electricity used in the residential colony was disallowed, while the appeal was allowed for other demands.
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2009 (12) TMI 823
Issues:
Central excise duty liability on bicycles acquired from related persons and sold at higher prices.
Analysis:
The appellant manufactured bicycles and parts chargeable to Central Excise Duty under specific sub-headings. They had separate units at different locations and were found to have acquired bicycles from their Ludhiana plant and another manufacturer. The Department alleged that since the units were related persons, duty should be payable on the prices at which the bicycles were sold. Show cause notices were issued for demand of differential duty, interest, and penalties. The Assistant Commissioner confirmed duty demand and imposed penalties on the Appellant.
On appeal, the CCE (Appeals) upheld the Assistant Commissioner's order. The Appellant then filed the present appeal challenging the order.
During the appeal hearing, the Department emphasized that duty is chargeable based on the selling price at the Unit II premises. However, the Tribunal noted that duty should have been paid by Unit I for the bicycles transferred internally. The duty demand confirmed by the Assistant Commissioner in a different jurisdiction was deemed unsustainable.
Regarding bicycles acquired from another manufacturer, the Tribunal found no discussion on how the Appellant and the manufacturer were related persons as defined in the Central Excise Act. The duty demand from the other manufacturer, confirmed by the Assistant Commissioner beyond jurisdiction, was also deemed unsustainable.
Consequently, the Tribunal set aside the impugned order-in-appeal as it was not sustainable based on the jurisdictional issues highlighted. The appeal was allowed, and the decision was pronounced in open court on 7-12-2009.
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2009 (12) TMI 822
Issues:
- Stay of order passed in Excise Appeal Nos. 844 & 845 of 2009
- Failure to comply with pre-deposit requirement
- Grant of stay by Tribunal
- Dismissal of appeals for non-compliance
Issue 1: Stay of order passed in Excise Appeal Nos. 844 & 845 of 2009:
The applicants sought a stay of the order passed in Excise Appeal Nos. 844 & 845 of 2009, citing the admission of their appeal by the Allahabad High Court on substantial legal questions. The Tribunal noted the absence of any stay granted by them on the said orders. Despite several opportunities given to the applicants to comply with the pre-deposit requirement, they failed to do so. The Tribunal emphasized the consequences under Section 35F of the Central Excise Act, 1944 for non-compliance with pre-deposit orders. The matter was adjourned multiple times to allow the applicants to provide reasons for non-compliance, but no satisfactory explanation was provided. Ultimately, the Tribunal dismissed the applications and the appeals themselves due to the failure to comply with the pre-deposit requirement.
Issue 2: Failure to comply with pre-deposit requirement:
The Tribunal highlighted the importance of complying with the pre-deposit requirement as mandated by Section 35F of the Central Excise Act, 1944. It was made clear to the applicants that failure to meet this requirement would lead to dismissal of the appeals. Despite being given opportunities to explain the non-compliance, the applicants failed to provide adequate reasons. The Tribunal emphasized that in the absence of valid reasons for non-compliance, dismissal of the appeal is the legal consequence. As the High Court had not granted a stay on the pre-deposit requirement, the Tribunal proceeded to dismiss the appeals due to non-compliance.
Issue 3: Grant of stay by Tribunal:
The Tribunal clarified that the question of granting a stay by them to the order passed in the stay applications did not arise. The applicants had appealed against the order related to stay applications, which was admitted by the Allahabad High Court but without a stay on the pre-deposit requirement. The Tribunal underscored that failure to comply with pre-deposit orders results in dismissal of the appeal itself unless valid reasons are provided. In this case, as no valid reasons were presented for non-compliance, the Tribunal did not grant a stay on the pre-deposit requirement.
Issue 4: Dismissal of appeals for non-compliance:
In light of the applicants' persistent failure to comply with the pre-deposit requirement despite multiple opportunities and the absence of valid reasons for non-compliance, the Tribunal proceeded to dismiss the applications and the appeals themselves. The Tribunal emphasized that adherence to the pre-deposit requirement is crucial as per the law, and non-compliance leads to dismissal of the appeal. Dismissing the appeals was deemed necessary to uphold the legal mandate of Section 35F of the Central Excise Act, 1944, especially since the High Court had not granted a stay on the pre-deposit requirement despite admitting the appeal.
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2009 (12) TMI 821
Issues involved:
Classification of final products under different chapters of CETA, 1985, eligibility for Modvat credit, verification of documents, legality of demanding differential duty without issuing a show cause notice, retrospective allowance of Modvat credit, adjustment of duty payable under re-classification.
Detailed Analysis:
1. Classification of Final Products and Modvat Credit Eligibility:
The dispute revolves around the classification of final products under Chapters 54 and 63 of CETA, 1985, and the subsequent claim for classification under Chapter 39 to avail Modvat credit. The Hon'ble High Court upheld the re-classification under Chapter 39, subject to verification of documents for granting Modvat credit. The appellants sought a total credit of Rs. 32,34,615, which was partially allowed by the Deputy Commissioner initially. The matter underwent multiple reconsiderations and appeals, leading to the current appeal against the Commissioner (Appeals) order disallowing a portion of the credit.
2. Legality of Demanding Differential Duty without Show Cause Notice:
The learned Advocate for the appellants argued that the Commissioner's decision to disallow a portion of the credit without issuing a show cause notice for demanding differential duty on finished products was not legal. Citing the decision in Metal Forgings v. UOI and Voltas Ltd. v. C.C.E., the Advocate contended that any recovery should be preceded by a show cause notice under Section 11A of the law.
3. Retrospective Allowance of Modvat Credit and Adjustment of Duty Payable:
The Tribunal noted that the re-classification directed by the Hon'ble High Court allowed for retrospective granting of Modvat credit based on document verification. The issue at hand was whether the differential duty payable under the re-classification should be adjusted. The Tribunal drew an analogy to situations where past demands were confirmed, but retrospective benefits like Modvat credit were extended subject to document verification, emphasizing the need to give full effect to the re-classification as directed by the High Court.
4. Conclusion:
After considering submissions from both sides, the Tribunal found no infirmity in the Commissioner (Appeals) order. The Tribunal upheld the decision to allow Modvat credit to the extent of Rs. 28,35,524, in line with the re-classification directed by the High Court. The appeal was subsequently rejected based on the above analysis and legal considerations.
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2009 (12) TMI 820
Issues:
- Interpretation of Rule 9(2) of the Cenvat Credit Rules, 2002
- Requirement of payment under Rule 9(2) upon opting for exemption
- Binding precedent of Tribunal decisions on Rule 9(2) interpretation
Analysis:
1. Interpretation of Rule 9(2): The case involved an appeal against a demand raised by the Department under Rule 9(2) of the Cenvat Credit Rules, 2002. The appellant, a manufacturer, opted for an exemption under Notification No. 8/2003-C.E. and was required to pay an amount equivalent to the Cenvat credit allowed in respect of inputs lying in stock or in process or contained in finished products. The Tribunal clarified that this requirement is not dependent on the legality of credit taken or utilized, emphasizing the mandatory nature of the payment upon opting for full exemption.
2. Payment Requirement under Rule 9(2): The appellant argued that since the credit taken and utilized were valid, no additional payment should be required under Rule 9(2). However, the Department contended that fulfilling the conditions of the exemption, including payment under Rule 9(2, was necessary. The Tribunal upheld the requirement for payment, stating that the liability under Rule 9(2) cannot be affected by the utilization status of the credit balance, emphasizing the distinct nature of recovery provisions under Rule 12 for wrongly taken or utilized credits.
3. Precedent and Tribunal Decisions: The appellant cited a Tribunal decision in a similar case where the demand was set aside based on the correctness of credit taking and utilization. However, the Tribunal in the present case disagreed with this interpretation, noting that the decision was at variance with its views. The Tribunal raised questions of law for reference to a Division Bench, seeking clarity on whether cash payment was necessary if the credit balance was insufficient and whether Rule 9(2) payment was independent of recovery provisions under Rule 12.
In conclusion, the Tribunal's judgment clarified the mandatory payment requirement under Rule 9(2) upon opting for exemption, emphasizing the distinct nature of this provision from recovery rules. The case highlighted differing interpretations of Rule 9(2) and the need for further clarification through a Division Bench reference, indicating the complexity and significance of issues surrounding Cenvat credit rules in excise matters.
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2009 (12) TMI 819
Issues:
1. Liability of duty on intermediate products used in manufacturing fully exempted goods.
2. Applicability of Notification No. 67/95-C.E. on intermediate goods.
3. Validity of duty payment by the appellant on finished products.
4. Rebate claim and its impact on duty payment.
Analysis:
1. The issue in this case revolves around the liability of duty on intermediate products used in manufacturing fully exempted goods. The appellants, engaged in manufacturing aluminum tableware and kitchenware, paid duty on finished products even though they were fully exempted under Notification No. 10/03-C.E. The Revenue contended that duty should not have been paid on finished goods as they were exempted, but duty on aluminum circles (intermediate product) was liable during that time. The impugned order confirmed a duty demand of over Rs. 1.3 crores against the appellant for utilizing aluminum circles in manufacturing exempted goods.
2. The applicability of Notification No. 67/95-C.E. on intermediate goods was another crucial point of contention. The appellant argued that they had the option to pay duty before the amendment to Section 5A of the Central Excise Act, 1944, and had claimed rebate on excise duty paid on finished products. The Board's clarifications were cited to support the appellant's position that no duty should be collected on intermediate goods used in manufacturing finished excisable goods exported under bond.
3. The validity of duty payment by the appellant on finished products was extensively discussed. The Department argued that duty paid on finished products should be treated as a deposit since they were exempted, relying on a Tribunal decision. However, the Tribunal found that the rebate sanctioned to the appellant indicated that the payment was indeed Central Excise duty, making the appellants eligible for exemption under Notification No. 67/95-C.E. The Tribunal emphasized that the entire exercise was revenue-neutral, as the appellants would have been eligible for a rebate even if duty was not paid on finished products.
4. Lastly, the impact of the rebate claim on duty payment was crucial to the resolution of the case. The Tribunal noted that the Department's contention regarding the nature of the payment made by the appellant was incorrect, as the rebate sanctioned was for excise duty. The Tribunal ultimately allowed the appeal, providing consequential relief to the appellants, and disposed of the cross objection filed by the Revenue.
This detailed analysis of the judgment highlights the complex legal arguments and interpretations surrounding the liability of duty on intermediate products, the application of relevant notifications, the validity of duty payment, and the significance of rebate claims in excise duty matters.
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2009 (12) TMI 818
Penalty u/s 114 of CA - import of prohibited item - Red Sanders Logs - Held that: - The goods were stuffed in the container under the Central Excise supervision and the red sanders logs were substituted en route to the Chennai Port. It is intriguing to find that the seals were not tampered with and they were intact at the time of examination of the consignments. The impugned order does not contain any material to conclude that the exporter either knew that the goods were liable to confiscation or did something or omitted to do something which commission or omission tendered the goods liable to confiscation - penalty cannot be sustained - appeal allowed - decided in favor of appelalnt.
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2009 (12) TMI 817
The Appellate Tribunal CESTAT CHENNAI upheld the decision denying credit for concrete sleepers and leaf springs as capital goods. The penalty was reduced to Rs. 2,000 as no suppression or fraud was found. The appeal was partly allowed for penalty reduction.
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2009 (12) TMI 816
The appeal was dismissed by the Appellate Tribunal CESTAT CHENNAI as the appellants failed to file the show cause notice along with the appeal, making it incomplete. The show cause notice is crucial for understanding the charges and presenting arguments in an appeal.
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2009 (12) TMI 815
Issues involved: Department's appeal against Commissioner (Appeals) order regarding excisable goods manufacturing, Cenvat Credit facility, job work under Rule 4(5)(a) of Cenvat Credit Rules, exemption under Notification No. 214/86, maintenance of separate accounts, demand confirmation, interest imposition, penalty.
Commissioner (Appeals) Order: The Commissioner (Appeals) set aside the Original Authority's order confirming demand and imposing penalty, holding that clearances of processed goods under Notification No. 214/86 cannot be treated as clearances of exempted goods.
Reasoning and Decision: The Tribunal rejected the appeal, stating that the responsibility of discharging liabilities in respect of central excise duty on final products lies with the supplier of inputs under Rule 4(5)(a) of the Cenvat Credit Rules. The Tribunal upheld the Commissioner (Appeals) decision, citing precedents and noting that the Department's appeal against those precedents did not suffice as grounds for interference.
Conclusion: The appeal was rejected by the Tribunal, emphasizing the legal basis for the decision and the lack of sufficient grounds for interference.
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2009 (12) TMI 814
Issues involved: Central Excise duty demand on shortage of Vanaspati, confiscation of seized crude palm oil, duty demand on seized oil, penalty imposition under various sections.
Central Excise Duty Demand on Vanaspati Shortage:
The appellant's factory was visited by Central Excise Officers where a shortage of 12.51 m.t. of Vanaspati Ghee was found. The appellant accepted the shortage and paid the duty. The Jt. Commissioner confirmed the duty demand, interest, and imposed a penalty under Section 11AC of the Central Excise Act. The Commissioner (Appeals) upheld this decision, leading to the appellant filing an appeal.
Confiscation of Seized Crude Palm Oil:
The Department alleged that the crude palm oil found in the appellant's factory was illicitly imported without duty payment. The appellant claimed to have purchased it from a specific company, which was confirmed by the company's director. However, a chemical test revealed the oil to be of non-edible grade. The Jt. Commissioner ordered the confiscation of the seized oil and tanker under the Customs Act, along with duty demand and penalties. The Commissioner (Appeals) upheld this decision.
Duty Demand on Seized Oil and Penalty Imposition:
The appellant argued that the seized oil was purchased from a legitimate source and the test reports were unreliable as they were not allowed to request a retest. The Department defended the confiscation and duty demand, stating the seized oil was of illicit origin. The Tribunal found that the test report was inconclusive due to the appellant's denied retest request. As the burden of proof lay with the Department, the duty demand, confiscation, and penalties were set aside.
In conclusion, while the duty demand for the Vanaspati shortage was upheld, the penalty was reduced. The confiscation of the seized oil and tanker, duty demand on the seized oil, and penalty under Section 112 of the Customs Act were set aside. The appeal was disposed of accordingly.
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2009 (12) TMI 813
Issues:
1. Assessment based on ex-factory price vs. depot price.
2. Validity of deductions claimed from depot sales.
3. Overlapping periods in show cause notices.
4. Adjudicating authority's approach against remand order.
Analysis:
*Issue 1: Assessment based on ex-factory price vs. depot price*
The case involved a dispute regarding the assessment of duty on excisable goods sold from the factory gate and depot. The appellant contended that ex-factory prices were genuine and should be used for assessment. The Adjudicating Authority acknowledged the existence of factory gate sales to independent buyers and found the ex-factory prices genuine. The Authority concluded that ex-factory prices should form the basis for assessing goods cleared from depots, citing relevant case laws. The Tribunal agreed with this finding, setting aside the duty liability confirmed by the Authority.
*Issue 2: Validity of deductions claimed from depot sales*
The appellant had claimed deductions from depot sales, which were challenged by the Revenue. However, the Adjudicating Authority, after confirming the genuineness of ex-factory prices, proceeded to confirm the demand based on deductions claimed by the appellant. The Tribunal found this approach contradictory to the remand order, as the genuineness of ex-factory prices had been established. Consequently, the Tribunal set aside the duty liability and penalties imposed.
*Issue 3: Overlapping periods in show cause notices*
There was an overlap in the periods covered by show cause notices issued by the Assistant Commissioner and the Commissioner. The Commissioner's notice covered a broader period, invoking the extended period of limitation. Despite this overlap, the Tribunal focused on the assessment based on ex-factory prices and the validity of deductions, leading to setting aside the impugned order.
*Issue 4: Adjudicating authority's approach against remand order*
The Adjudicating Authority's decision to confirm the demand based on deductions, despite finding ex-factory prices genuine, was deemed incorrect by the Tribunal. The Tribunal emphasized that when ex-factory prices are established as genuine and no appeal is filed against such findings, confirming the demand on this basis is erroneous. Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.
In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the genuineness of ex-factory prices for assessing goods cleared from depots. The Tribunal set aside the duty liability, penalties, and interest imposed by the Adjudicating Authority, based on the established genuineness of ex-factory prices.
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2009 (12) TMI 812
Issues Involved:
1. Eligibility for exemption under Notifications No. 96/03-Cus, 52/03-Cus, and 22/03-C.E.
2. Demand of duty under Section 72(a) of the Customs Act, 1962.
3. Liability for confiscation under Section 111(o) of the Customs Act, 1962.
4. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
Summary:
1. Eligibility for Exemption:
The Commissioner (Appeals) upheld the original authority's decision that the goods were not entitled to exemption under Notifications No. 96/03-Cus, 52/03-Cus, and 22/03-C.E. The original authority found that the goods were "somewhat akin" to prototype/technical samples, which are eligible for exemption. The assessment at the time of import, supported by an essentiality certificate, could not be revised without due process. The impugned goods were not improperly removed as the warehousing period had not expired, and the proper officer had not denied an extension.
2. Demand of Duty under Section 72(a):
The original authority demanded duty under Section 72(a) of the Customs Act, 1962, for goods not found during verification. However, the demand under Section 72(a) was not sustainable as there was no evidence of physical removal from the warehouse. The goods were dismantled for research and evaluation, not removed from the warehouse.
3. Liability for Confiscation under Section 111(o):
The Commissioner (Appeals) and the original authority found the goods liable for confiscation under Section 111(o) of the Act. However, the impugned order did not indicate any condition not fulfilled for the goods to incur liability to confiscation. The goods were used for the manufacture of export goods, and there was no evidence of dishonest or contumacious conduct by the appellant.
4. Imposition of Penalty under Section 112(a):
The penalty under Section 112(a) of the Act was also not sustainable. The appellant had fulfilled the NFE requirements under the Exim Policy and had not violated any conditions. The penalty was imposed without evidence of removal from the warehouse or any dishonest conduct.
Conclusion:
The impugned order was set aside, and the appeals filed by M/s. American Power Conversion Ltd. were allowed. The demand of duty, liability for confiscation, and imposition of penalty were not sustainable due to lack of evidence and fulfillment of conditions for exemption.
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2009 (12) TMI 811
Deduction of hypothetical tax - Held that:- Insofar as the assessee is concerned, he had received only ₹ 90/- (that is ₹ 75/- + ₹ 15/-; ₹ 10/- was not received at all in view of the nature of arrangement between the employer and the employee). Therefore, there was no question of addition of this hypothetical tax to the income of the assessee and asking the assessee to pay tax thereupon. There is no dispute that the assessee has paid tax on the actual salary received by him in India. Thus, even on the application of first principle and adopting commonsense approach, it is clear that the addition made by the AO on account of so-called hypothetical tax was unsustainable and the ITAT rightly deleted the said addition.
No question of law, therefore, arises. We accordingly dismiss all these appeals.
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2009 (12) TMI 810
Issues: Rectification of error apparent in the final order reducing penalty imposed under Section 114 of the Customs Act.
The judgment pertains to an application filed by M/s. Passage Cargo Pvt. Ltd. seeking rectification of an error apparent from the records contained in the Final Order Nos. 276 & 277/2009 dated 9-3-2009 of the Tribunal, which partially allowed the appeal filed by the Customs House Agent (CHA) for setting aside the penalty of Rs. 1 lakh imposed under Section 114 of the Customs Act. The Tribunal had reduced the penalty to Rs. 50,000. The lower appellate authority had previously reduced the penalty from Rs. 2 lakhs to Rs. 1 lakh. The appellant challenged the order before the Tribunal on various grounds, including the argument that the lower authorities had not justified the penalty imposed and that only the Commissioner of Customs was competent to initiate action against a CHA under the Custom House Agents Licensing Regulation (CHALR), 2004. The appellant also contended that the Tribunal had not considered the question of law raised in the supplementary affidavit. The appellant relied on a previous Tribunal decision and a case law to support their arguments.
The application highlighted that the Tribunal did not consider the appellant's submission that the penalty was imposed under Section 114 of the Act without a finding that the appellant had been guilty of any act leading to the export goods being liable for confiscation under Section 113 of the Act. The impugned order by the Commissioner (Appeals) made observations regarding the abetment in splitting a single consignment into different shipping bills but did not find any willful act by the appellant leading to the confiscation of export goods. Consequently, it was concluded that since the appellant was not found guilty of rendering export goods liable for confiscation under Section 113 of the Act, the penalty imposed under Section 114 of the Act could not be upheld. Therefore, the ROM application was allowed, the penalty was set aside, and the appeal was allowed, necessitating a change in the order of the Tribunal.
In summary, the judgment revolved around the rectification of an error apparent in the final order reducing the penalty imposed under Section 114 of the Customs Act. The appellant challenged the penalty on various grounds, including lack of justification and the competency of the authorities to initiate action. The Tribunal's failure to consider the appellant's submission regarding the penalty imposition without a finding of guilt for confiscation under Section 113 was a crucial point in the judgment, leading to the allowance of the ROM application, setting aside the penalty, and allowing the appeal.
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9911796707
