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Showing 281 to 300 of 835 Records
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2010 (4) TMI 961
Issues: Application for stay of order involving interest, penalty, and liability under Section 11AC of the Central Excise Act, 1944.
Interest Liability:
The appellants sought a stay on the order directing payment of interest under Section 11AB of the Central Excise Act, 1944. The advocate for the appellants acknowledged the liability to pay interest as per the impugned order and agreed to pay once the quantification is communicated by the Department. The Tribunal noted this acknowledgment and directed the appellants to pay the interest amount within eight weeks of communication.
Penalty Liability under Section 11AC:
The dispute revolved around the imposition of penalty under Section 11AC of the Central Excise Act, 1944. The adjudicating authority confirmed the duty liability, and the Apex Court upheld this decision, indicating suppression of relevant material that allowed the Department to invoke the extended period of limitation. The Tribunal observed that the Apex Court remanded the matter for adjudication of penalty and interest, emphasizing the need for detailed consideration of the penalty imposition. The appellants argued that the adjudicating authority did not adequately address the requirements of Section 11AC, questioning whether the failure to raise objections empowered the authority to ignore crucial aspects. The Tribunal considered various legal provisions and concluded that a prima facie case existed for staying the penalty demand pending further appeal proceedings.
Judicial Precedents and Legal Interpretation:
The Tribunal referenced judicial precedents such as Union of India v. Dharamendra Textile Processors and Union of India v. Rajasthan Spinning & Weaving Mills to analyze the penalty imposition under Section 11AC. It highlighted the necessity for the adjudicating authority to thoroughly assess the ingredients of Section 11AC before penalizing an assessee for deliberate deception to evade duty. The Tribunal emphasized the importance of parties raising objections and the adjudicating authority's duty to address all relevant aspects, even in the absence of specific disputes raised by the assessee.
Final Decision and Compliance:
Considering the arguments presented, the Tribunal stayed the order concerning the penalty amount until the appeal's disposal. It instructed the Department to calculate and communicate the interest amount within six weeks, with the appellants required to deposit the interest within eight weeks of receiving the communication. A compliance report was set for a specific date to monitor adherence to the Tribunal's directives.
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2010 (4) TMI 960
Issues Involved:
Imposition of penalties under Section 112 (a) & (b) Customs Act, 1962 for diversion of imported goods under the DEEC scheme to the local market without discharging export obligations, reliance on retracted statements of co-noticees, denial of cross-examination, and lack of corroborative evidence.
Detailed Analysis:
1. Imposition of Penalties under Section 112 (a) & (b) Customs Act, 1962:
The appellants filed appeals against the penalties imposed for diverting imported goods under the DEEC scheme to the local market without fulfilling export obligations. The case involved allegations against various individuals, including the importers and other parties involved in transportation and clearance of the goods. The penalties were imposed based on the investigation conducted by the DRI and subsequent show cause notices issued to the parties involved.
2. Reliance on Retracted Statements of Co-noticees:
The appellants argued that the penalties were based solely on statements made by co-noticees, which were later retracted within six days. They contended that these statements were recorded under duress and coercion, and the appellants were not allowed to cross-examine the co-noticees. The appellants emphasized that no incriminating documents were recovered, and the case lacked corroborative evidence to support the allegations.
3. Denial of Cross-Examination and Lack of Corroborative Evidence:
The appellants challenged the denial of their right to cross-examine witnesses and present documentary evidence in support of their defense. They cited legal precedents emphasizing the importance of natural justice, including cases where the denial of cross-examination was deemed a breach of principles of natural justice. The appellants argued that without corroborative evidence and in the absence of incriminating documents, the penalties imposed on them were not sustainable.
4. Judgment on Individual Appeals:
a. *Appeal of Shri Ravindra Rastogi:* The Commissioner's decision to impose penalties on Rastogi was based on allegations of profit-sharing and diversion of goods, primarily relying on statements of co-noticees. However, the Tribunal found inconsistencies in the statements, lack of valid reasons for denying cross-examination, and no incriminating evidence against Rastogi. The penalties imposed on Rastogi were set aside, and the appeal was allowed.
b. *Appeals of Shri R.P. Singh & Maha Singh Khatri:* Similarly, in the cases of Singh and Khatri, the Tribunal noted the absence of incriminating documents and the reliance on retracted statements without corroborative evidence. The penalties imposed on Singh and Khatri were deemed unsustainable, and their appeals were allowed.
In conclusion, the Tribunal set aside the penalties imposed on the appellants due to the lack of corroborative evidence, denial of cross-examination rights, and the reliance on retracted statements. The judgment highlighted the importance of adhering to principles of natural justice and the necessity of substantial evidence to support penalties under the Customs Act, 1962.
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2010 (4) TMI 959
Issues involved: Appeal against the order of the Commissioner (Appeals) setting aside the lower Adjudicating Authority's order on recovery of duty u/s Rule 173Q of erstwhile Rules read with Section 11AC of the Central Excise Act, 1944 based on reprocessed brown sugar shortages in seasons 1994-95 and 1996-97.
Details of the Judgment:
1. Department's Contention:
- Department argued that reprocessing losses in this case were significantly higher than a previous case, indicating possible clandestine removal.
- Even if the test report was not received earlier, the show-cause notice could be issued within 5 years due to suspicions of clandestine removal.
2. Respondent's Contention:
- Respondent claimed they did not suppress evidence and informed the department about the sugar shortage when reprocessing.
- Argued that abnormal losses were due to reprocessing and not clandestine removal, supported by the Commissioner (Appeals)'s acceptance of their reasons.
3. Analysis and Decision:
- Tribunal noted the department's focus on sugar yield but highlighted the absence of discussion on molasses production during reprocessing.
- Commissioner (Appeals) rightly applied a previous decision's ratio, considering the respondent's explanations for losses.
- Department's failure to obtain the test report directly from CRCL weakened their argument of non-disclosure by the respondent.
- Lack of evidence supporting clandestine removal led to the dismissal of the Revenue's appeal.
- Commissioner (Appeals) provided a well-reasoned conclusion, which the department failed to challenge effectively.
Conclusion:
The Tribunal upheld the Order-in-Appeal, dismissing the Revenue's appeal due to the lack of merit in proving clandestine removal and the strength of the Commissioner (Appeals)'s findings.
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2010 (4) TMI 958
Issues:
Challenge to order for payment of differential duty, denial of exemption under Notification No. 05/2006-C.E. due to non-compliance with conditions.
Analysis:
The appellants contested an order requiring payment of differential duty, interest, and penalty. The dispute revolved around the denial of exemption under Notification No. 05/2006-C.E. The authorities alleged non-compliance with condition 3 of the notification along with Trade Notice No. 40/97-C.E. The appellants argued that the trade notice was not in effect at the relevant time as per Rule 33 of Central Excise Rules, 2002. They also contended that the notification did not mandate information submission in the manner specified in the trade notice.
The Notification No. 05/2006-C.E. outlined conditions for an 8% ad valorem duty on goods using fly-ash or phosphogypsum. Condition 3 required maintaining proper accounts and filing monthly returns as specified by the Commissioner of Central Excise. The Trade Notice No. 40/97-C.E. mandated daily raw material accounts, monthly returns, and immediate intimation upon receipt of specified goods. Rule 33 validated notifications consistent with the Central Excise Rules, 2002, unless inconsistent. The appellants failed to demonstrate any inconsistency between the rules and the trade notice, rendering the notice enforceable.
Regarding the filing of returns, it was emphasized that compliance was not discretionary and must align with legal provisions for effective oversight by excise authorities. The necessity of timely and accurate returns was underscored to ensure proper regulation. Consequently, the authorities' findings on this matter were upheld. Despite no indication of financial hardship, the appellants were directed to deposit the demanded duty amount within eight weeks, with interest and penalty waived pending appeal. This decision aimed to balance the interests of both parties, considering the circumstances of the case.
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2010 (4) TMI 957
Issues involved: Appeal against the impugned order allowing Modvat credit based on provisionally assessed bill of entry.
Issue 1: Verification of final assessment of bills of entry
The matter was before the Tribunal for the second round of litigation. The Tribunal had earlier remanded the matter to the Commissioner with a direction to ascertain whether the bills of entry had been finalized before deciding on the admissibility of credit. The Revenue contended that the Commissioner failed to verify the final assessment of the bills of entry and instead allowed Modvat credit based on provisional assessment. The Tribunal noted that there was no provision under the Cenvat Credit or Modvat Credit Rules to deny credit solely on the basis of provisional assessment. The Tribunal found no fault on the part of the Commissioner for not verifying the final assessment of the bills of entry, especially considering the long delay by the Revenue in conducting such verification.
Issue 2: Denial of credit on endorsed bills of entry
The Tribunal had observed that denial of Modvat credit solely on the ground of bills of entry being provisionally assessed and final assessment not being produced even after five years cannot be a prima facie ground for denial. The Commissioner was directed to consider whether denial of credit on endorsed bills of entry was correct and to ascertain if final assessment had been completed. The Revenue contended that the Commissioner did not properly verify the endorsed bills of entry. However, the Tribunal found that the Commissioner had appropriately relied on Tribunal decisions and rejected the Revenue's appeal, stating that no interference was warranted in this regard.
In conclusion, the Tribunal upheld the Commissioner's decision to allow Modvat credit based on provisionally assessed bill of entry and rejected the Revenue's appeal. The Tribunal emphasized the lack of grounds for denying credit solely on the basis of provisional assessment and noted the absence of any provision in the relevant rules to support such denial.
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2010 (4) TMI 956
Issues Involved:
1. Finalization of Provisional Assessment and Refund Claim
2. Applicability of Unjust Enrichment
3. Rejection of Refund Claim and Subsequent Appeals
4. Legal Precedents and Judicial Pronouncements
Detailed Analysis:
1. Finalization of Provisional Assessment and Refund Claim:
The case revolves around M/s. ITC Ltd., Bangalore, which filed a refund claim of Rs. 3.76 crores after the finalization of a provisional assessment of Central Excise duty on cigarettes for the period from 1-10-1975 to 28-2-1983. The provisional assessment was finalized on 30-8-2002, revealing an excess payment by the assessee. The Department asked the assessee to claim a refund, leading to the filing of the refund claim on 19-4-2003. The Assistant Commissioner sanctioned the refund but credited it to the Consumer's Welfare Fund, citing the principle of 'unjust enrichment.' This decision was contested by the Revenue, leading to a series of appeals.
2. Applicability of Unjust Enrichment:
The core issue is whether the refund claim is subject to the test of unjust enrichment under Section 11B of the Central Excise Act. The Revenue argued that the refund arose not from the finalization of provisional assessment but as a consequence of an appellate order, thus necessitating the application of Section 11B. The Revenue cited the Supreme Court's judgment in the Mafatlal Industries case, which held that refunds arising from appellate orders are subject to Section 11B. The Revenue also referenced other judicial pronouncements, including the Coastal Gases & Chemicals Pvt. Ltd. and Hindustan Lever cases, supporting the stance that the refund should be tested for unjust enrichment.
3. Rejection of Refund Claim and Subsequent Appeals:
The Assistant Commissioner initially rejected the refund claim, leading to an appeal by the assessee. The Commissioner (Appeals) allowed the appeal, concluding that the bar of unjust enrichment did not apply as the payments were made post-clearance and under protest. The Revenue's appeal against this decision was dismissed by the Tribunal on procedural grounds, but the High Court of Karnataka remanded the matter for fresh consideration. The Tribunal, upon rehearing, upheld the Commissioner (Appeals)'s decision, noting that the payments were made post-clearance and could not have been passed on to customers.
4. Legal Precedents and Judicial Pronouncements:
The Tribunal's decision was influenced by several legal precedents. The Commissioner (Appeals) relied on the Supreme Court's judgment in the TVS Suzuki case, which held that the bar of unjust enrichment does not apply to refunds arising from the finalization of provisional assessments for periods before the amendment of Rule 9B(5) on 25-6-1999. The Tribunal also referenced the Punjab & Haryana High Court's decision in the Modi Oil & General Mills case, which established that duty paid post-clearance could not have been passed on to customers, thus rebutting the presumption of unjust enrichment.
Conclusion:
The Tribunal upheld the Commissioner (Appeals)'s decision, rejecting the Revenue's appeal and confirming that the refund claim was not subject to the bar of unjust enrichment. The Tribunal emphasized that the payments were made post-clearance and under protest, and the Revenue failed to provide evidence that the incidence of duty was passed on to customers. The Tribunal's decision aligns with established legal principles and judicial precedents, ensuring that the refund claim is processed without the unjust enrichment bar.
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2010 (4) TMI 955
Issues:
Claim for Cenvat Credit on duty paid on elevator denied by Commissioner (Appeals) due to alleged exclusive office use of elevator.
Analysis:
The case involved the appellants claiming Cenvat Credit on duty paid on an elevator, which was denied by the Commissioner (Appeals) based on the assertion that the elevator was solely for office use and not for movement of goods. The original adjudicating authority's observations were considered, emphasizing the lack of concrete evidence to establish the elevator's exclusive office use. The deposition of a witness highlighted that technical persons would use the elevator to access the production area on the first floor, indicating its relevance to manufacturing activities. The absence of confirmation regarding exclusive office use further weakened the Commissioner's argument.
The Tribunal noted that the movement of technical persons between floors was directly related to manufacturing activities, aligning with the rule that Cenvat Credit on capital goods should be allowed if used in the factory. It was clarified that the Revenue did not dispute the elevator's use within the factory premises. The Tribunal concluded that the Commissioner's distinction lacked legal basis and, therefore, could not be upheld. Consequently, the appeal by the appellant was allowed, emphasizing the elevator's connection to manufacturing activities within the factory premises.
In summary, the judgment highlighted the importance of substantiated evidence in determining the eligibility for Cenvat Credit on capital goods, emphasizing the relevance of the elevator's use in manufacturing activities within the factory premises. The decision underscored the necessity for legal justification in denying such benefits and upheld the appellant's claim based on the evidence presented regarding the elevator's functional connection to the production area on the first floor.
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2010 (4) TMI 954
Interpretation of statute - second proviso to para 6 of N/N. 22/2003 dated 31-3-2003 - duty on paper and PVC resin - demand on the ground that finished goods are either not excisable or are exempted or charged to nil rate of duty - Held that: - the finished goods are excisable but were exempted or charged to nil rate of duty. Hence, for the period prior to amendment i.e., 6-9-2004, the appellants are not required to pay the input duty. However, the same is payable on and after 6-9-2004 - the appellants have paid the duty for the subsequent period from 6-9-2004.
Penalty - Held that: - Since the issue involves interpretation of the Notification and also the assessments in respect of the EOU is provisional, there is no case of imposition of penalty on the appellants.
Appeal allowed - decided partly in favor of assessee.
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2010 (4) TMI 953
Issues:
- Appeal against revocation of CHA licence and forfeiture of security deposit.
- Application for continuance of proceedings after the death of the appellant.
- Impleadment of the widow as co-appellant.
- Interpretation of Regulation 16 of the Customs House Agents Licensing Regulations 2004.
- Legal heir's eligibility to work as a CHA.
- Stigma attached to the deceased appellant and its relevance in the proceedings.
Analysis:
1. Application for Continuance of Proceedings:
The appeal was filed by M/s. Samrat Shipping Services against the revocation of their CHA licence and forfeiture of the security deposit. After the death of the appellant, an application was made by the widow as the legal heir under Rule 22 of the CESTAT Procedure Rules, seeking continuance of the proceedings. The rule required the application to be filed within 60 days of the appellant's death, but the application was filed beyond this period. The Tribunal, after hearing both sides, decided to condone the delay based on the circumstances presented by the applicant.
2. Impleadment of Widow as Co-Appellant:
The widow of the deceased appellant sought impleadment as a co-appellant in the proceedings. The appellant's counsel argued that the Commissioner's order was prejudicial and illegal as it revoked the licence without providing any alternative measures. However, the Tribunal noted that the widow, although a major, did not hold the required H card to work as a CHA as per Regulation 16 of the Customs House Agents Licensing Regulations 2004. Therefore, even if the proceedings continued, the relief sought could not be granted to her, rendering the continuation of the proceedings futile.
3. Interpretation of Regulation 16:
Regulation 16 of the Customs House Agents Licensing Regulations 2004 was analyzed in detail to determine the eligibility of the legal heir to work as a CHA after the death of the original licensee. The regulation specified that the legal heir must be a major and an H card holder to be permitted to work as a CHA. As the widow did not meet the requirement of holding an H card, she could not be allowed to work as a CHA, making the continuation of the proceedings ineffective in providing the desired relief.
4. Stigma and Tribunal's Role:
The appellant's counsel emphasized the stigma attached to the deceased appellant due to the Commissioner's findings. However, the Tribunal clarified that it was not the appropriate forum to address or eliminate any stigma associated with the appellant. The Tribunal's role was limited to interpreting and applying the relevant laws and regulations in the case.
5. Decision and Conclusion:
Based on the analysis of the regulations and the eligibility criteria for working as a CHA, the Tribunal dismissed the application for continuance of the proceedings, recording that the appeal had already abated due to the failure to meet the regulatory requirements. The decision was made considering the legal provisions and the specific circumstances of the case, ultimately leading to the dismissal of the appeal.
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2010 (4) TMI 952
Issues:
1. Whether the demand representing reversal of 50% of the credit taken by the assessee was correctly set aside by the Tribunal.
2. Whether there was a simultaneous availment of Cenvat credit and income tax depreciation by the assessee.
3. Whether the appropriation of the amount paid by the assessee should have been upheld to prevent double benefit.
Analysis:
1. The Tribunal, in the final order, set aside the demand of Rs. 3,63,467/- representing reversal of 50% of the credit taken by the assessee. The Tribunal held that the assessee did not contravene the provisions of Rule 4 (4) of the Cenvat Credit Rules, 2001 by availing both Cenvat credit and income tax depreciation for the second instalment of 50% credit. This decision was based on the assessee's method of availing 50% credit on capital goods in the year of purchase and the remaining 50% in the subsequent financial year. The Tribunal found that the assessee had not simultaneously availed double benefit, as they deducted the Cenvat credit from the value of the capital goods for depreciation purposes in a staggered manner.
2. The Revenue contended that the appropriation of the amount paid by the assessee should have been upheld to prevent double benefit. However, the Tribunal found that the assessee had followed a specific method of availing Cenvat credit and depreciation, ensuring that there was no simultaneous availment of double benefit. The Tribunal highlighted that the assessee deducted the Cenvat credit from the value of the capital goods for depreciation purposes in a structured manner, which did not result in double benefit. Therefore, the Tribunal dismissed the Revenue's argument and upheld its decision to set aside the demand.
3. The Tribunal's analysis focused on the methodical approach adopted by the assessee in availing Cenvat credit and depreciation on capital goods. The Tribunal emphasized that the assessee had not committed any error or contravention that would lead to double benefit. By availing 50% of the credit in one financial year and the remaining 50% in the subsequent year, and deducting the credit from the value of the capital goods for depreciation purposes accordingly, the assessee ensured that there was no simultaneous availment of double benefit. Consequently, the Tribunal rejected the Revenue's claim of mistake apparent in its final order and dismissed the application for recall.
In conclusion, the Tribunal's judgment upheld the assessee's methodical approach in availing Cenvat credit and income tax depreciation, ensuring that there was no simultaneous availment of double benefit, and dismissed the Revenue's application for recall of the final order.
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2010 (4) TMI 951
Valuation of warehoused goods removed after withdrawal of warehousing facility - whether the duty is payable on the stocks lying on the date of withdrawal of warehouse provisions or on the different transactions values adopted at the time of removal of goods from the warehouses subsequent to withdrawal of warehousing facility from 5-9-2004 to 30-9-2004?
Held that: - The assessable value of petroleum products cleared from the refineries on or after 6-9-2004, is to be determined under Section 4 of the Central Excise Act, 1944 read with the Valuation Rules - no storage losses are permitted in the export warehouses/tanks whether intermediate or at AFS including those with such mixed storage. Further, the export warehousing under Notification No. 46/2001-C.E. (N.T.), dated 26-6-2001 does not cover removal of goods from one export warehouse to another.
The duty liability on the goods in the warehouses after the withdrawal of warehousing facility could be discharged in terms of provisions of Rule 8 of the Central Excise Rules, 2002 could indicate that duty liability can be paid by the appellant on 5th of the following month. Such determination of the duty can arise only when the goods are cleared from the warehouses.
Appeal allowed - decided in favor of appellant.
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2010 (4) TMI 950
Issues involved:
The issues involved in the judgment are related to the modification of duty liability, penalty imposition, and payment obligations under the compounded levy scheme u/s Rule 96ZO of the Central Excise Rules, 1944.
Details of the Judgment:
1. Modification of Duty Liability and Penalty Imposition:
The appeals arose from a common order passed by the Commissioner (Appeals), Ludhiana, modifying the duty liability and penalty imposed by the Adjudicating Authority. The Adjudicating Authority had ordered recovery of Rs. 2,00,000/- out of the total duty amount of Rs. 10,66,666/- along with interest and penalty. The Commissioner (Appeals) reduced the penalty amount to Rs. 2,00,000/-.
2. Application of Compounded Levy Scheme:
The appellant/respondent was engaged in the manufacture of M.S. Ingots and had opted for the compounded levy scheme u/s Rule 96ZO for duty discharge. Disputes arose regarding the furnace capacity and duty payment obligations. The High Court orders and legal interpretations were considered in determining the duty liability.
3. Payment Obligations and Penalty Imposition:
The assessee failed to pay the duty for certain months, leading to a show cause notice and subsequent penalty imposition. The Adjudicating Authority confirmed the duty demand and imposed a penalty equal to the outstanding amount. The Commissioner (Appeals) reduced the penalty, leading to a dispute regarding the penalty amount.
4. Legal Interpretation and Apex Court Rulings:
The judgment considered the legal interpretations of Rule 96ZO, Section 3A(4) of the Act, and relevant case laws. The Apex Court rulings emphasized that once an assessee opts for a payment procedure, they cannot subsequently opt out of the scheme. The obligation to pay duty and penalties under the compounded levy scheme was highlighted.
5. Decision and Disposition of Appeals:
The appeal filed by the assessee was dismissed, and the appeal filed by the department was allowed. The impugned order reducing the penalty was set aside, and the penalty amount specified by the Adjudicating Authority was restored and confirmed. The judgment upheld the duty payment obligations and penalty imposition under the compounded levy scheme.
The judgment provides a comprehensive analysis of the duty liability, penalty imposition, and payment obligations under the compounded levy scheme, emphasizing the legal interpretations and obligations of the assessee under the relevant provisions of the Central Excise Rules.
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2010 (4) TMI 949
Issues:
- Dispute regarding deemed credit under Notification No. 6/2002-C.E. (N.T.) for processed man-made fabrics cleared after 31-3-03.
- Interpretation of statutory provisions for availing Cenvat credit.
- Consideration of limitation in availing Cenvat credit.
Analysis:
Issue 1: Dispute regarding deemed credit under Notification No. 6/2002-C.E. (N.T.) for processed man-made fabrics cleared after 31-3-03:
The case involved a dispute over the availment of deemed credit under Notification No. 6/2002-C.E. (N.T.) for processed man-made fabrics cleared for home consumption after 31-3-03. The respondent had a stock of processed fabrics as of 31-3-03 and cleared them in April 2003, availing deemed credit under the said notification. The adjudicating authority disallowed the credit, leading to penalties and interest. The Commissioner (Appeals) set aside the demand, stating that the deemed credit had been earned before the notification's end date. However, the Revenue challenged this finding, arguing that as the goods were cleared after the notification's expiry, the respondent was not entitled to the credit.
Issue 2: Interpretation of statutory provisions for availing Cenvat credit:
The Tribunal analyzed the relevant statutory provisions, particularly Notification No. 6/2002-C.E. (N.T.), which allowed credit at the time of final product clearance without the need for duty payment evidence. The Tribunal noted that while the final product was in stock on 31-3-03, clearance occurred after the notification ceased to be in effect. Emphasizing that credit was to be allowed at the time of final product clearance, the Tribunal found that the Commissioner (Appeals) had misinterpreted the statute. Consequently, the Tribunal set aside the impugned order, ruling that the respondent could not claim benefits under an inoperative notification.
Issue 3: Consideration of limitation in availing Cenvat credit:
In addition to the substantive dispute, the respondent raised a limitation issue before the Commissioner (Appeals). The respondent argued that since they availed the Cenvat credit in April 2003 and reported it in their ER-1 returns, the show cause notice issued in 2008 was beyond the limitation period. However, the Commissioner (Appeals) did not address this contention while allowing the appeal on merit. Therefore, the Tribunal remanded the matter back to the Commissioner (Appeals) to decide on the limitation aspect after considering submissions from both parties.
In conclusion, the Tribunal ruled in favor of the Revenue, setting aside the Commissioner (Appeals)' decision on the deemed credit issue under Notification No. 6/2002-C.E. (N.T.). The Tribunal also directed a reconsideration of the limitation aspect by the Commissioner (Appeals) for a comprehensive resolution of the case.
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2010 (4) TMI 948
Issues Involved:
1. Waiver of pre-deposit and stay of recovery of demand of duties and penalties.
2. Eligibility for exemption under Notification No. 21/02-Cus. and Notification No. 6/06-C.E.
3. Interpretation of non-scheduled (passenger) services and non-scheduled (charter) services.
4. Applicability of limitation period for the demand.
Summary:
1. Waiver of Pre-deposit and Stay of Recovery:
The applications seek waiver of pre-deposit and stay of recovery of the demand of duties confirmed against the assessee companies, penalties imposed on them, and on their Managing Directors.
2. Eligibility for Exemption:
The appellant companies imported helicopters availing exemption u/s Sl. No. 347B of Notification No. 21/02-Cus. and Notification No. 6/06-C.E. The authorities found that the helicopters were leased on long-term charter, violating the exemption conditions. The Commissioner demanded duties, found helicopters liable for confiscation u/s 111(d) and 111(o) of the Customs Act, and imposed penalties u/s 112 of the Customs Act.
3. Interpretation of Non-scheduled Services:
The appellants argued they conducted non-scheduled (passenger) services as per condition 104 of the Notification and had necessary approvals. The Commissioner interpreted that non-scheduled (passenger) services should satisfy all elements of scheduled (passenger) services except scheduling. The Commissioner found that the appellants did not have a published tariff, thus not qualifying for non-scheduled (charter) services. The Tribunal found the Commissioner's interpretation justified and noted that the appellants did not convincingly establish their case.
4. Applicability of Limitation Period:
In the case of UHPL, the appellants argued the demand was barred by limitation. The Tribunal noted there was no charge of suppression of facts, fraud, or willful misstatement. The demand was based on a bond executed by the appellants. The Tribunal found a strong prima facie case against the demand on limitation for UHPL and ordered complete waiver of pre-deposit and stay of recovery.
Conclusion:
The Tribunal ordered KRACPL to make a pre-deposit of 50% of the duty demanded within 12 weeks, with the balance dues and penalties stayed pending appeal. For UHPL, the Tribunal granted complete waiver of pre-deposit and stay of recovery pending appeal.
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2010 (4) TMI 947
Benefit of N/N. 279/82-C.E. dated 22-11-1982 - Printed Boxes made out of duty-paid mill board pasted with duty-paid kraft paper - The assessee had filed classification list No. 53/83 effective from 18-4-1983 describing the goods as “Printed Boxes made out of duty-paid mill board pasted with duty-paid kraft paper on which proforma credit has not been availed”, and classifying the same under Tariff Item No. 17(3) of the Old Central Excise Tariff Act. This classification list also claimed the benefit of exemption from payment of duty on the printed boxes under Notification No. 279/82-C.E. dated 22-11-1982 (Serial No. 1) - Held that: - we have found no justification for demand of duty from the assessee for the period during which classification list No. 53/83 ibid was in force inasmuch as this classification list was duly approved by the Assistant Collector and such approval was ultimately sustained by this Tribunal - mill board boxes and mill board cartons were exempted from payment of duty, if made wholly out of mill board as per serial number (1) of the table annexed to the notification Explanation to the notification defined “mill board” - Admittedly, mill board used in the above boxes was having kraft paper pasted thereon. Consequently, the item in question did not qualify for the benefit of exemption in terms of serial number (1) of the table annexed to the notification. In this scenario, the amount of duty to be recovered from the assessee needs to be re-quantified by the original authority.
Penalty u/s 11AC - Held that: - the penal provision which was not invoked in show-cause notice was not to be pressed into service by the lower authorities. Section 11AC was, therefore, illegally invoked - This provision was, even otherwise, not applicable inasmuch as the entire period of dispute was prior to the date on which Section 11AC came into force.
It is, also, settled law that there can be no composite penalty under different penal provisions. The lower authorities chose to impose a composite penalty under Section 11AC, Rule 173Q (1944) and Rule 25(2002), which exercise is not permissible in law.
The order for levy of interest and imposition of penalty are set aside and the original authority is directed to re-quantify the amount to be recovered from the assessee - appeal allowed by way of remand.
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2010 (4) TMI 946
Issues involved: Stay applications seeking waiver of pre-deposit and stay of recovery of penalties imposed on M/s. Shree Deepak Exports and others for over-invoicing consignments of readymade garments to obtain undue drawback amounts, denial of DEPB claims, imposition of penalties, common allegations against exporting firms managed by Shri Suresh Jhunjhunwala and Shri Deepak Jhunjhunwala, examination of exported goods, violation of natural justice principles.
Summary:
1. M/s. Shree Deepak Exports Case:
- Stay applications filed seeking waiver of pre-deposit and stay of penalties.
- Commissioner re-determined FOB value in shipping bills, demanded undue drawback amount.
- Rejected DEPB claims and denied drawback claims on certain shipping bills.
- Allegations of over-valuation of export goods.
- Penalties imposed on appellants.
2. M/s. Suresh Enterprises Case:
- Applications seeking waiver of pre-deposit and stay of dues adjudged.
- Commissioner denied DEPB claim against export of garments.
- Allegations of over-valuation and mis-declaration of goods.
3. Common Allegations:
- Charges against exporting firms based on statements of co-noticees.
- Allegations of over-valuation of goods by exporting firms.
- Common noticees involved in cases.
4. Facts and Allegations:
- Searches conducted on exporters leading to recovery of incriminating documents.
- Allegations of fraud and obtaining undue duty drawback and DEPB credit.
- Detailed investigation by DRI revealing fraudulent activities.
5. Defence and Legal Arguments:
- Defence counsel argued against rejection of submissions and examination of goods.
- Cited Tribunal and Supreme Court judgments to support defence.
- Requested remand for de novo adjudication following natural justice principles.
6. Revenue's Position:
- Revenue relied on co-noticees' statements to establish fraud by exporters.
- Submission on examination reports not representative of entire goods.
- Cited Supreme Court judgment to support position on pre-deposit.
7. Court's Decision:
- Court considered submissions from both sides.
- Found lack of examination reports provided to exporters.
- Prima facie view of violation of natural justice principles.
- Granted waiver of pre-deposit and stay of recovery during appeals' pendency.
Conclusion:
The Court granted waiver of pre-deposit and stay of recovery of penalties to M/s. Shree Deepak Exports and others due to lack of examination reports, violation of natural justice principles, and prima facie view of unsustainable mis-declaration allegations.
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2010 (4) TMI 945
Whether the assessee used the texturised yarn of polysters manufactured by an independent texturiser as it was not having the facility in its factory for manufacture of partially oriented yarn of polysters, so, it (assessee) was not entitled to avail the Cenvat credit in respect of such inputs, in view of Rule 3(6)(d) of the Cenvat Rules, is not only devoid of merit but misplaced as well?
Held that:- The assessee is held entitled to avail the Cenvat credit on the inputs sent for intermediate job to the job worker, which were received in its factory for manufacture of final product or Zipper rolls, in the obtaining circumstances of the case. Thus, the question of law raised in this appeal is accordingly answered in favour of the assessee and against the-revenue.
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2010 (4) TMI 944
The Appellate Tribunal CESTAT Ahmedabad upheld the Commissioner (Appeals) decision that a Board clarification issued in Circular No. 813/10/2005-CX had retrospective effect. The Revenue's appeal was rejected as it lacked merit, and the Order in Original for assessing physician samples based on Rule 4 of Valuation Rules was deemed legal and proper.
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2010 (4) TMI 943
CENVAT credit - aluminium wire rods and wire bars - Clandestine removal - fake invoices - receipt of invoices without actual receipt of inputs - Held that: - the appellants never received wire rods and bars in their factory is based on the law of evidence. Once the Revenue produces sufficient evidence which would lead an ordinary prudent man to conclude that the evidence led by the department prima facie shows the goods have not been received, the onus of proving that the goods have been received shifts to the person who claims to have received the same - Except denying what has been stated in the show cause notice, appellants have not led any positive evidence which is possible in this case to show that they have actually received aluminium wire rods/bars - credit not allowed.
Demand - extrusions - Extrusion becoming scrap before reaching RG-1 stage have not been accounted - Held that: - the fact that the department has not produced any evidence to show that such goods have been removed or sold does not in any way affect the demand for Central Excise duty on the goods manufactured. Further this is not a case of mere shortage/excess of stock but Department has conducted investigation to prove the excess production - the onus has shifted to the appellants to show that they had accounted for all the goods produced in the RG-1 register. Central Excise duty is leviable on the manufacture. The taxable event is manufacture and not removal or sales - demand upheld.
CENVAT credit - aluminium ingots - Held that: - Once again the onus of proving that they have accounted for all the goods produced, shifts to the appellants and they have failed to discharge this burden. They want the department to show challanwise details of goods transported or not transported. There are several decisions of Hon’ble Supreme Court and High Courts wherein it has been held that in such clandestine activities, only the person who indulges in such activities knows all the details and it would not be possible for any investigating officer to unearth all the evidences required and prove with mathematical precision - demand upheld.
Penalty on partner of company - Held that: - he himself admitted that he was aware of clandestine removal and also non-accountal of full production made in the factory. Under these circumstances, he has been rightly penalized by the Commissioner. Therefore the penalty on Shri P.N. Shah has to be upheld.
Penalty on firm - Held that: - the benefit of payment of 25% of the duty as penalty under Section 11AC subject to the payment of duty demanded with interest thereon and penalty to the extent of 25% within thirteen days is made by the appellant firm has to be extended.
Appeal dismissed - decided against assessee.
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2010 (4) TMI 942
Issues Involved:
1. Denial of SSI exemption under Notification No. 8/2003.
2. Use of the brand name "RATTAN".
3. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act.
4. Refund of the deposit amount and interest thereon.
Detailed Analysis:
1. Denial of SSI exemption under Notification No. 8/2003:
The appellants sought to stay the order where the Commissioner dropped proceedings initiated against the respondents under a show cause notice. The notice required the respondents to justify why the SSI exemption should not be denied and the specified duty recovered along with interest and penalty. The respondents were using the brand name "RATTAN", which was registered to M/s. Rattan Hammers since 1989. However, the Commissioner found that the respondents had registered the brand name "RATTAN" in their name from 1996, thus following the proper procedure and not intentionally availing benefits of another's goodwill. Consequently, the Commissioner dropped the proceedings, allowing the SSI exemption.
2. Use of the brand name "RATTAN":
The respondents used the brand name "RATTAN" since 1996, which was also registered to M/s. Rattan Hammers. The Commissioner noted that the respondents had registered the brand name retrospectively from 1996, making them co-owners and thus not using another's brand name. The learned SDR argued that retrospective registration did not entitle the respondents to SSI exemption, citing the Apex Court's decisions in Meghraj Biscuits Industries Ltd. and Mahaan Dairies, which emphasized strict compliance with exemption notifications. The Tribunal noted that the respondents' case did not fall under the exceptions of Notification No. 8/03-C.E., thus the benefit of exemption was not available.
3. Invocation of the extended period of limitation under Section 11A(1) of the Central Excise Act:
The Commissioner found that the respondents had declared the use of the brand name "RATTAN" in their declaration, which was verified by the jurisdictional officers, hence there was no concealment. Therefore, invoking the extended period of limitation was not tenable. However, the learned SDR contended that the declaration did not disclose the use of another's brand name, thus justifying the invocation of the extended period. The Tribunal noted that the declaration did not disclose the use of a brand name belonging to another person, and the Commissioner's order lacked analysis on this aspect.
4. Refund of the deposit amount and interest thereon:
The respondents deposited Rs. 5 lakhs during the proceedings. The learned Advocate for the respondents argued that withholding the amount would deny them interest. The Tribunal found it premature to decide on the interest issue and stated it would be addressed during the appeal's disposal. The Tribunal stayed the impugned order, finding the Commissioner's findings prima facie not in consonance with the law laid down by the Apex Court, thus favoring the appellant.
Conclusion:
The Tribunal concluded that the appellants made a prima facie case for staying the impugned order, and the balance of convenience lay in favor of the appellant. The application for stay was allowed, and the impugned order was stayed until the appeal's disposal. The application was disposed of accordingly.
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