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Case Laws
Showing 301 to 320 of 1327 Records
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2012 (11) TMI 1034
CENVAT Credit - Revenue contends that drums/containers in which the chemicals were brought to the factory and which were subsequently cleared are liable to discharge duty liability - Held that:- refund which became liable to be paid to the appellant as a consequence of the earlier decision of the Tribunal stands rejected by the lower authorities on two grounds : (i) on the ground that the same cannot be refunded in cash, and (ii) that the appellant has not satisfied the unjust enrichment angle - as the amount deposited was in the nature of pre-deposit, the principles of unjust enrichment would not apply in terms of the law declared in the above referred judgment. Further the appellants are in agreement to get refund claim by way of credit entry in their Cenvat credit account - Decided in favour of assessee.
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2012 (11) TMI 1033
CENVAT Credit - Services received by the appellant for auditing the CTC National Phase Out Plan and putting the same in CTC usage - service received has no nexus with the manufacture at all – Held that:- The services have been obtained for the purpose of conducting audit of the process and change of raw material suitably presented to GTZ to receive the grant so that the company can phase out the process, which cause depletion of ozone in the atmosphere - the activity undertaken by the appellant was to implement the national plan and ensure that the appellant follow the provisions of Ozone Depleting Substances (Regulation & Control) Rules, 2000 - the whole activity has a direct nexus with the manufacture and manufacturing process and is with the objective of reduction of emission of Ozone Depleting Substances - Following decision of M/s Sujal Dye Chem Industries Versus CCE Ahmedabad [2012 (6) TMI 370 - CESTAT, AHMEDABAD] - Decided in favour of assessee.
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2012 (11) TMI 1032
Duty demand - Revenue by entertaining the view that as the appellants are selling the dutiable as also exempted products, and are availing Cenvat credit on various inputs and input services, they are required to pay 10% of the value of exempted final product in terms of provisions of Rule 6 of Cenvat Credit Rules - Held that:- requirement of payment of 10% of the value of exempted product is relatable to the final product and not to waste or by-product. Inasmuch as the fine sponge iron emerged as waste material during the course of sponge iron, I am of the view that Commissioner (Appeals) has rightly held that there is no requirement of payment of 10% of the value of iron ore fine cleared by the appellant. No infirmity is found in the order passed by Commissioner (Appeals) - Following decision of Rallies India [2008 (12) TMI 46 - HIGH COURT BOMBAY] - Decided against Revenue.
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2012 (11) TMI 1031
Notification No. 214/86-C.E. - Availment of CENVAT Credit - Appellant had a contract with M/s. BHEL for conversion of Copper Wire Bars into Rectangular Copper Bars with specified sizes and dimensions on job work basis - appellant were operating under Notification No. 214/86-C.E. and accordingly while BHEL were availing Cenvat credit in respect of copper wire bars, the appellant were returning the rectangular copper bars of specified dimension to BHEL without payment of duty and rectangular copper bars were being used by BHEL in manufacture of finished goods which were being cleared by BHEL on payment of duty - Held that:- The appellant in terms of their contract with BHEL for processing of copper wire bars into rectangular bars of specified size and dimensions on job work basis, were required to return 98% of the raw-material in process form, as in terms of the contract the burning loss of only 2% was permitted. There is no dispute that while BHEL were availing Cenvat credit in respect of wire bars sent by them to the appellant for job work, the appellant were operating under Notification No. 214/86-C.E. and sending the processed material to BHEL without payment of duty. In terms of Rule 57F(4) of Central Excise Rules, 1944, the waste arising in the course of the processing of material received from the principal manufacturer was required to be returned to the factory of the principal manufacturer, unless the waste has been cleared by the manufacturer (job-worker) on payment of duty. In this case, the conversion of copper bars involved, in addition to 2% waste on account of burning loss, 16% waste on account of off size cuts.
Since the appellant were required to return 98 Kg of rectangular bars out of every 100 Kg of copper wire bars received from BHEL and the procurement of copper wire bars from outside to the extent of 16% was in lieu of the sale of copper waste to the extent of 16%, the copper bars procured from outside have to be treated as owned by BHEL and since Cenvat credit in respect of the same has been availed by the appellant, they would be liable to pay duty on the rectangular bars manufactured out of the same, and this duty would be payable on the value determined in terms of the Apex Court’s judgment in the Ujagar Prints (1989 (1) TMI 124 - SUPREME COURT OF INDIA) i.e. on the cost of wire bars procured from outside plus job charges - Thus the duty has been correctly demanded by the Department in respect of the rectangular copper wire bars manufactured by appellant out of the wire bars procured by them, from outside - As regards the limitation, the extended period has been correctly applied, as the fact of manufacture of rectangular wire bars out of copper wire bars procured from outside was never disclosed by the appellant to the Department - Decided in favour of assessee.
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2012 (11) TMI 1030
Denial of CENVAT Credit - Difference in stock - Burden of proof - Held that:- The basis of duty demand and the Modvat credit demand in this case is that though in terms of the condition of Notification, the appellant were required to maintain account regarding end-use of the material imported at concessional rate, the end-use register was not properly maintained and that entries in end-use register did not explain the user of 710 imported copper clad laminated sheets. Since the appellant have availed concessional rate under Notification No. 13/97-Cus. and this exemption is subject to end-use condition, the burden is on the appellant to prove that imported material was used for the intended purpose. Since in this case, the records do not show that imported material was used for the intended purpose, we are thus of the view that concessional rate of duty in respect of 710 imported copper clad laminated sheets has been correctly denied as it cannot be said that the same were used for the intended purpose. For the same reason we are of the view that the Cenvat credit of the additional customs duty availed in respect of those laminated sheets has been correctly denied - Decided against assessee.
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2012 (11) TMI 1029
Duty demand - Shortage in stock - Clandestine removal of goods - Held that:- Revenue has relied upon the statement of Sh. Subhash Goyal, accepting such shortages and deposing that the goods might have been cleared without the cover of invoice. The fact is that the said statement was withdrawn by Sh. Subhash Goyal subsequently and there is a letter of the Director of the Company on record, I find that there is no other evidence available indicating the clandestine clearance of the ingots. There are umpteen number of decisions holding that there is no other evidence available on record indicating the clandestine clearance of the final product, charges of clandestine removal can not be upheld on the basis of sole retracted statement. The same are required to be proved by producing sufficient & positive evidence of clandestine removal. Apart from that as already observed the weighment of the stock was not actually done and as such shortage arrived at on the basis of arithmetical and calculative methods cannot be accepted - Decided in favour of assessee.
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2012 (11) TMI 1028
Duty demand - Clandestine removal of goods - Burden of proof - Held that:- duly demand stand confirmed in respect of shortages detected at the time of visit of the officers read with the statement of Shri Jai Kishan Khatri. The appellants have strongly contended, the manner of weighment of the final product. It is seen that the Revenue has not produced any inventory on record to show that the weightment was actually done and the shortages were not on the basis of average weight system but real and based upon actual weighments. Similarly reliance of the revenue on the statement of the authorized representative cannot ipso facto lead to the inevitable conclusion of clandestine removal of final product especially when there is no variation in the stock of the raw material. - Decided in favour of assessee.
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2012 (11) TMI 1027
Duty demand - Shortage of M.S. Ingots - However no discrepancy in stock - Held that:- duty demand stand confirmed in respect of shortages detected at the time of visit of the officers read with the statement of Shri Vijay Kumar Agarwal. The appellants have strongly contended, the manner of weightment of the final product. It is seen that the Revenue has not produced any inventory on record to show that the weightment was actually done and the shortages were not on the basis of average weight system but real and based upon actual weightments. Similarly reliance of the Revenue on the statement of the authorized representative cannot ipso-facto lead to the inevitable conclusion of clandestine removal of final product especially when there is no variation in the stock of the raw-material. There is no other evidence on record to reflect upon the above fact - though an admission is extremely important piece of evidence, it cannot be said to be conclusive - allegations of clandestine removal are required to be established by the Revenue by production of the concrete and tangible evidence. In the present case apart from the statement of the authorized representative, there is no evidence to reflect upon the said activities - As the Revenue has failed to bring on record any evidence showing illegal manufacture and removal of their final product, I find no justification in upholding the confirmation of demand of duty or imposition of penalty on both the appellants - Following decision of Commissioner of Income Tax v. Dhingra Metal Works [2010 (10) TMI 29 - DELHI HIGH COURT] - Decided in favour of assessee.
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2012 (11) TMI 1026
Waiver of pre deposit - Board Circular No. 643/34/2002-CX, dated 1-7-2002 - Appellant was entitled to deduction of transportation charges from the place of removal to the place of delivery from the assesseable value and no deduction in respect of transportation charges for return journey was permissible - Held that:- appellant has been able to make out a strong prima facie case for waiver of condition of pre-deposit. Accordingly, we allow the stay application and waive condition of pre-deposit of duty demand, interest and penalty and stay recovery thereof till disposal of the appeal - Following decision of M/s. Haldia Petroleum Corporation Ltd. v. C.C.E., Haldia [2006 (7) TMI 495 - CESTAT, BANGALORE] - Stay granted.
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2012 (11) TMI 1025
CENVAT Credit - Insurance auxiliary service - Held that:- The decision of the Hon’ble Karnataka High Court on the question whether, on insurance services provided by insurance companies to manufacturers of excisable goods so as to cover various risks to the latter’s employees, CENVAT credit could be claimed by the manufacturer is against the appellant and in favour of the respondent vide Stanzen Toyotetsu (2011 (4) TMI 201 - KARNATAKA HIGH COURT) and Millipore India (2011 (4) TMI 1122 - KARNATAKA HIGH COURT). In both the cases, the Hon’ble High Court upheld the Tribunal’s view which has been rightly followed in the impugned order - Decided against Revenue.
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2012 (11) TMI 1024
Clearance of goods without payment of duty in terms of Notification No. 4/2006-C.E., dated 1-3-2006 - Held that:- slag emerges during the course of manufacture of final product and is removed and contained in slag pot. Merely because appellant find a customer for the same, there is no reason to hold the slag removed by the appellant is a final product. It stands held by the Tribunal in a number of decisions that provision of Rule 6 applies to the final product and not to waste and scrap emerging during the course of manufacture of final product. Hon’ble Bombay High Court in the case of Rallis India Ltd. v. Union of India - (2008 (12) TMI 46 - HIGH COURT BOMBAY) has held that liability to pay 10% of value of exempted product in terms of erstwhile Rule 57CC (now Rule 6) arises only for final product and not for waste. Inasmuch as slag is admittedly a waste product, no liability would arise in terms of provisions of Rule 6, in terms of the above decision of the Bombay High Court - Decided in favour of assessee.
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2012 (11) TMI 1023
Waiver of condition of pre-deposit of duty - No source of income declared - clandestine removal of excisable goods without invoices and without payment of duty - Held that:- On perusal of the show cause notice as well as order-in-original we find that the impugned order is based only on the ground that there was unexplained income of Rs. 1 crore was detected by the income tax authorities and the Department has presumed that aforesaid income must have been the result of undeclared production and clandestine removal of excisable goods. We may note that since the Department has raised duty demand, the onus of proving excess production and clandestine removal of excisable goods is on the Department. The impugned order is prima facie based on assumption and presumption and there is no evidence which may suggest excess production or clandestine removal of excisable goods by the appellant. Therefore, in our view, the appellant have a strong prima facie case. Accordingly we allow the stay applications and waive condition of pre-deposit of duty demand, interest and penalty and recovery thereof stayed till disposal of the appeals - Stay granted.
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2012 (11) TMI 1022
Maintainability of appeal - Appeal u/s 35F - Appeal to Tribunal - Held that:- On bare reading of the Section 35B of the Central Excise Act, 1944, it is evident that a party aggrieved of the order passed by the Commissioner under Section 35A can prefer an appeal before the Tribunal. Admittedly, the impugned order has been passed under Section 35F of the Central Excise Act - Decided against assessee.
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2012 (11) TMI 1021
CENVAT Credit - whether the appellant can claim CENVAT credit of the additional duty of customs (CVD) paid on the capital goods received by them under the cover of a commercial invoice and an endorsed Bill of Entry issued by the importer of such goods - Held that:- Department has no case that the imported capital goods were not received in the appellant’s factory or not used for the purpose of manufacturing excisable goods. The limited ground raised for denying CENVAT credit to the appellant is that the endorsed Bill of Entry is not one of the documents prescribed under Rule 9 of the CENVAT Credit Rules, 2004.
It is not even the case of the Department that the capital goods in question were not received in the appellant’s factory and not used for manufacture of excisable products. In these circumstances, I am of the view that the CENVAT credit of the CVD paid on the capital goods cannot be denied to the appellant on the ground alleged in the show-cause notice - Decided in favour of assessee.
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2012 (11) TMI 1020
Classification of goods - Classification of Chapter Heading 2301.11 or Chapter Heading 1701.90 - Held that:- Chapter 23 of the Central Excise Tariff covers residue and waste from the food industry whereas Chapter 17 of the Central Excise Tariff specifically covers sugar. As per Chapter Note No. 2 of Chapter 17 of the Central Excise Tariff, sugar means any form of sugar in which the sucrose contents, if expressed as a percentage of the material dried to constant weight at 10°C would be more than 90%. In the present case the samples of brown sugar was sent to Central Excise Laboratory, Mumbai for testing and as per the Chemical Examiner the percentage is more than 90%. In view of this, we find merit in the contention of the Revenue that the brown sugar is classifiable under Chapter Heading 17 of the Central Excise Tariff - Decided in favour of Revenue.
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2012 (11) TMI 1019
CENVAT Credit - Whether, on rent-a-cab service and air travel agent’s service, the appellant rightly availed CENVAT credit or not - Held that:- It was not the case of the department in the relevant show-cause notice that rent-a-cab service was not used for transportation of employees or that air travel agent’s service was not availed by the company’s executives for undertaking business travels. The case of the Revenue as made out in the show-cause notice was that the two services did not qualify to be input services for the purpose of CENVAT credit. If the rent-a-cab service was used by the company for transporting their employees between the factory and their residential locations, the requisite nexus exists between the service and the manufacture of excisable goods in the factory. Similarly, if the air travels were undertaken by the company’s executives for business purposes, the necessary nexus between the service and the business activities of the appellant does exist. The show-cause notice did not even attempt to make out a case to the contra. Therefore, the case of the appellant is liable to be accepted - Commissioner of Central Excise, Tirunelveli Vs. DCW [2011 (1) TMI 45 - CESTAT, CHENNAI] - Decided in favour of assessee.
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2012 (11) TMI 1018
Penalty under Rule 26 of the Central Excise Rules 2002 - Irregular CENVAT Credit availed - Held that:- M/s Aditya Steel Rolling Pvt. Ltd. who issued invoices without supply of scrap (input) to M/s Usha Enterprises and it was the latter who issued invoices without supply of the material to M/s Ashok Iron Works Pvt. Ltd. This case of the department is based on confessional statements of the said parties and the same was noted by this Bench in the above final order. The assessee (M/s Ashok Iron Works Pvt. Ltd.) did not controvert the statements of M/s Aditya Steel Rolling Pvt. Ltd. and M/s Usha Enterprises. I find that they have offered to reverse the CENVAT credit in question and they did so. On these facts, the collusion between the assesseee on the one hand and M/s Aditya Steel Rolling Pvt. Ltd. and M/s Usha Enterprises on the other is fairly clear. The penalties imposed on them under Rule 26 are sustainable in principle.
Assessee did claim CENVAT credit on the strength of invoices issued by M/s Usha Enterprises who gave the statement that they had not supplied any materials under cover of the invoices. Moreover, the assessee voluntarily reversed the irregularly availed CENVAT credit. The assesee’s conduct did not in any way conflict with the statements given by the parties who issued invoices. In the circumstances, the aforesaid plea contained in the written submissions cannot be accepted. The penal liability for issuing statutory invoices without supply of goods was recognized by the legislature as early as in 2007 vide sub-rule 2 of Rule 26 of the Central Excise Rules 2002. In the facts and circumstances of this case, the appellants are liable to be penalized under this provision of law. However, it appears to me that the penalty equal to the CENVAT credit in question will be harsh on each of these appellants - Therefore, penalty reduced - Decided partly in favour of assessee.
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2012 (11) TMI 1017
Duty demand - Denial of benefit of Notification No. 67/1995 - appellants were availing the Notification in respect of molasses which are used in the manufacture of denatured alcohol - Held that:- There is no evidence on record that the appellant cleared rectified alcohol without payment of duty during the period of dispute. The whole quantity of molasses used in the manufacture of denatured alcohol which is cleared on payment of duty - benefit of Notification No. 67/95-CE is available in respect of the castings which were further used in the manufacture of glass bottles. The Revenue wants to deny the benefit of the Notification on the ground that castings which are used in the manufacture of moulds are exempt from payment of duty - Following decision of Haldyn Glass Ltd, vs. CCE reported in [2005 (4) TMI 143 - CESTAT, MUMBAI] - Decided in favour of assessee.
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2012 (11) TMI 1016
Duty demand - Whether, in relation to clearances of goods to SEZ units without payment of duty during the period from June 2008 to June 2009, they should pay the duty determined by the original authority and the penalty imposed by it - Held that:- The SEZ units were admittedly entitled to procure their inputs without payment of duty from DTA units like the appellant. It is not in dispute that the inputs supplied by the appellant were duly received by the SEZ units. These supplies were exports for purposes of the SEZ Act. These supplies were effected under cover of proper invoices and ARE-1s. The Customs Officer posted at the SEZ verified these documents and made necessary endorsements therein. It is not in dispute that, had the appellant paid duty on the above clearances, they could have claimed rebate under the relevant provisions of the Central Excise Rules 2002 read with the relevant provisions of the SEZ Act/Rules. In such a revenue-neutral situation, no intent to evade payment of duty can be attributed to the appellant.
The show-cause notice in this case alleged that the appellant indulged in wilful misstatement of facts with intent to evade payment of duty. This allegation is baseless inasmuch as every clearance to the SEZ units was promptly intimated to the Central Excise Range Officer. In the letter of intimation, the appellant had clearly stated that they had cleared the goods against exemption certificates issued by the SEZ Units. Clearance of goods, without payment of duty, to the SEZ units by the appellant was clearly within the knowledge of the department during the period of dispute. Hence there was no wilful misstatement of any fact, let alone with intent to evade payment of duty. The show-cause notice issued in March 2010 to recover duty on goods cleared in 2008 & 2009 is clearly barred by limitation.
Non-execution of bond and non-mention of LUT particulars in ARE-1s are cited as serious lapses of the appellant. Execution of bond or, alternatively, mention of LUT particulars in ARE-1 is a procedure prescribed for ensuring that the goods cleared by the DTA unit are received by the SEZ unit. In the present case, receipt of the goods cleared by the appellant, by the SEZ units is an admitted fact. If that be so, the proceedings have to be set aside by condonation of procedural lapses - Decided in favour of assessee.
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2012 (11) TMI 1015
CENVAT Credit - benefit of the Notification No. 214/86-CE dated 25.3.1986 - Manufacturers of the Panel Boards supplied to the appellant were within the SSI exemption limit of clearances - Held that:- appellant could have definitely availed the cenvat credit on the inputs if appellant had followed the correct procedure and really purchased the inputs, supplied to SSI manufacturers who could have in turn added the value of the raw material and sold it back to him. In fact, instead of manipulating and seeking the manufacturers to include his name in the invoices received by them, all he had to do was, he could make the payment and the manufacturers only need to add the value of other costs and supply the goods to him. Under these circumstances, the submission that there was no loss to the Government and in fact it was loss to the party would show that extended period could not have been invoked in this case and therefore, the entire demand may have to be set-aside.
In the absence of any Panelty proposed under other rules/ sections, Panelty under Section 11AC also may have to be struck down. However, learned advocate on behalf of the appellant has referred to a detailed examination of all the evidences and facts of the case to reach a correct conclusion regarding invocation of extended time by submitting that appellant has no objection to appropriate the duty and interest paid and is seeking only waiver of Panelty. Under the circumstances, I find that this is a very reasonable proposition and therefore, I uphold the demand for cenvat credit and interest thereon as not contested. In the facts and circumstances of the case, the Panelty imposed under Section 11AC is set-aside - Decided in favour of assessee.
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