Try our new portal www.taxtmi.com for a better experience!

Home

Case Laws

Home Case Index All Cases Income Tax Section Wise 2008 2008 (8) This

Law
Court
Citation	- -
Landmark
Order by

Advanced Search Options

Case Laws

Showing 381 to 400 of 931 Records

2008 (8) TMI 660

Issues:
1. Classification of imported goods under Notification No. 21/2002.
2. Eligibility for exemption under Sl. No. 168 of the notification.
3. Certification and clarification by C.L.R.I regarding the nature of the imported goods.
4. Claim of the appellants as manufacturer exporters of leather garments.

Classification of Imported Goods:
The appellants, a leather garment manufacturer exporter, imported goods described as Nylon Mesh Lining Material. The Department classified the items under Sl. No. 167A of Notification No. 21/2002, while the appellants claimed exemption under Sl. No. 168, which includes Lining and Interlining Materials. C.L.R.I initially certified that the goods cannot be used as Lining Material for leather goods but later clarified that Nylon Mesh, although not generally used as Lining Material, is sometimes used as Inner-Lining Material for leather garments. Considering this clarification and the appellants' status as actual users and manufacturer exporters of leather garments, the Tribunal held that the claim of the appellants for exemption under Sl. No. 168 was valid. The classification under 5407.4290 was not disputed, and the appeal was allowed.

Eligibility for Exemption:
The main issue was whether the imported goods could be considered as Lining Material for leather goods to qualify for exemption under Sl. No. 168 of Notification No. 21/2002. The Tribunal relied on the subsequent clarification by C.L.R.I that while Nylon Mesh is not commonly used as Lining Material, it can serve as Inner-Lining Material for leather garments based on specific requirements. Additionally, a certificate from the Council for Leather Exports supported that the imported goods would be used solely in the manufacture of leather garments. Considering these factors, the Tribunal concluded that the appellants were eligible for the exemption under Sl. No. 168.

Certification and Clarification by C.L.R.I:
C.L.R.I initially certified that the imported goods were not suitable as Lining Material for leather goods. However, a subsequent clarification highlighted that Nylon Mesh, although not typically used as Lining Material, could be utilized as Inner-Lining Material in certain cases, such as for collars in leather garments. This clarification played a crucial role in establishing the nature of the imported goods and supported the appellants' claim for exemption under Sl. No. 168 of the notification.

Claim of the Appellants as Manufacturer Exporters:
The Tribunal emphasized that the appellants were manufacturer exporters of leather garments, not traders. This distinction was significant in determining their eligibility for the exemption under Sl. No. 168 of the notification. The certificate issued by the Council for Leather Exports further validated that the imported goods would be exclusively used in the manufacturing process of leather garments, reinforcing the appellants' claim and supporting the Tribunal's decision to allow the appeal.
2008 (8) TMI 659

Issues:
1. Interpretation of exemption notifications for asbestos cement sheets.
2. Calculation of percentage weight of fly ash in the final product.
3. Maintenance of proper records and compliance with prescribed procedures.
4. Burden of proof for claiming conditional exemption from Excise duty.

Analysis:
1. The main issue in this case revolves around the interpretation of exemption notifications for asbestos cement sheets. The appellant claimed entitlement to exemption under Notifications requiring the use of fly ash in manufacturing the sheets. The argument centered on whether the appellants met the required percentage of fly ash in their product, with the appellant contending they used 27% of fly ash based on the standard weight of the sheets.

2. The calculation of the percentage weight of fly ash in the final product was crucial. The appellant relied on industry practices and the CBEC Manual, which accepted standard weight for assessment purposes. The Commissioner's reliance on sample weighments of wet sheets during the maturing process was challenged, emphasizing the need to consider the weight of fully manufactured sheets ready for clearance.

3. The issue of maintenance of proper records and compliance with prescribed procedures was raised. The appellant argued that they maintained the necessary registers and records as per Board's Circular and the relevant Notification, and no discrepancies were found in their standard weight recording over the years. Similar cases in favor of other manufacturers supported the appellant's claim regarding standard weight maintenance.

4. Regarding the burden of proof for claiming conditional exemption from Excise duty, the Department contended that the appellants failed to prove compliance with the conditions for exemption. However, the Tribunal found merit in the appellant's arguments, noting precedents where the weight of impugned goods in wet condition during curing process should not be considered for determining fly ash content.

In conclusion, the Tribunal ruled in favor of the appellants, waiving the pre-deposit requirement during the appeal's pendency. The decision highlighted the importance of considering the weight of finished goods at the time of clearance from the factory for determining fly ash content, and emphasized the appellants' compliance with record-keeping requirements and industry standards.
2008 (8) TMI 657

Issues:
Non-filing of authorization by Committee of Commissioners for appeal filing.

Analysis:
The matter pertains to the non-rectification of a defect pointed out by the registry to the revenue regarding the non-filing of authorization by the Committee of Commissioners for filing an appeal. The registry had informed the Commissioner of Customs about the defect in the appeal filed by them, specifically mentioning the absence of the required authorization. In response, the office of the Commissioner of Customs stated that since the appeal was signed by the Commissioner, no separate authorization was necessary. They also mentioned that no Order-in-Original was passed in the case and provided additional copies of the Order-in-Appeal for reference. However, Section 129A(2) of the Customs Act clearly outlines the requirement for authorization by the Committee of Commissioners for filing an appeal against an order deemed improper or illegal by the Appellate Commissioner or Commissioner (Appeals).

Despite the clear and unambiguous provision in Section 129A(2) of the Customs Act, the office of the Commissioner of Customs contended that no authorization was needed for filing the appeal. The Tribunal expressed surprise at this interpretation, noting that it contradicted the statutory requirement. Consequently, the Tribunal found this interpretation to be incorrect and dismissed the appeal filed by the revenue as defective. The order was directed to be given to the respondent through dasti.

This judgment underscores the importance of adhering to statutory provisions and the necessity of proper authorization for filing appeals, as mandated by the relevant legal framework. The Tribunal's decision highlights the significance of procedural compliance and the implications of failing to meet such requirements in legal proceedings.
2008 (8) TMI 656

Issues:
- Seizure and confiscation of war items in a consignment of old and used pipes
- Confiscation and penalty under Section 119 of Customs Act, 1962
- Pre-shipment certificate requirement and its absence
- Justification for confiscation and imposition of redemption fine
- Consideration of demurrage, storage charges, and reduction of redemption fine and penalty

Seizure and Confiscation of War Items:
The appellants filed a bill of entry for clearance of old and used pipes but the consignment was found to contain war items like used ammunitions and broken armoured vehicles. The impugned order resulted in the absolute confiscation of the war items and confiscation of the old and used pipes under Section 119 of the Customs Act, 1962. The appellants argued that they purchased the material on high sea sale basis and did not order war material. They requested a lenient view due to heavy expenses incurred. The Revenue contended that the old and used pipes were used to conceal the war items, justifying the confiscation.

Confiscation and Penalty under Section 119:
The appellants' argument was based on the lack of intention to import war material and the high penalty imposed. The Tribunal noted that the appellants failed to insist on a pre-shipment certificate required by law during the high sea purchase, indicating a lack of precaution. The absence of the certificate and the declaration of the goods as old and used pipes while containing war material justified the confiscation under Section 119. However, considering the demurrage and storage charges incurred, the redemption fine was reduced to Rs. 1 lakh and the penalty to Rs. 5,000.

Pre-shipment Certificate Requirement:
The Tribunal emphasized the importance of the pre-shipment certificate, which was not submitted by the appellants. The absence of this certificate, along with the use of old and used pipes to conceal war items, supported the decision of confiscation and imposition of redemption fine.

Justification for Confiscation and Imposition of Redemption Fine:
The Tribunal found that the appellants were not entirely innocent as they failed to obtain the necessary pre-shipment certificate, which was a crucial requirement under the law. The use of old and used pipes to hide war items indicated an attempt to conceal the true nature of the consignment, justifying the confiscation under Section 119.

Consideration of Demurrage, Storage Charges, and Reduction of Redemption Fine and Penalty:
Despite upholding the confiscation, the Tribunal acknowledged the heavy demurrage and storage costs incurred by the appellants. Consequently, the redemption fine was reduced to Rs. 1 lakh and the penalty to Rs. 5,000 to account for the circumstances and expenses faced by the appellants. The appeal filed by the appellants was rejected, and the cross-objection filed by the Revenue was disposed of.
2008 (8) TMI 655

Issues:
Classification of Front End Structure (FES) under Chapter Heading 8707 or 8708 of the Central Excise Tariff Act (CETA).

Analysis:
The appeals revolved around the classification of the Front End Structure (FES) manufactured by the appellants under the Central Excise Tariff Act. The appellants classified the FES under Chapter Heading 8708 as parts of motor vehicles, while the impugned order classified it under Chapter Heading 8707 as bodies for motor vehicles, leading to a demand for reclassification. The FES comprised a bonnet cover, windscreen, and dash board panel fitted to the chassis for driving the chassis to various parts of the country for sale.

The lower authorities based their decision on the separate entry for bodies under Chapter Heading 8707, concluding that since the FES is a part of the body, it falls under this heading. However, the appellants argued that Chapter Heading 8707 only covers complete bodies for motor vehicles of specific headings and not parts of bodies. They relied on the Customs Tariff entry 8708.10, which includes parts and accessories of bodies, to support their classification under Chapter Heading 8708.

The appellants contended that since the Customs and Excise Tariffs are aligned and based on the Harmonized System of Nomenclature (HSN) entries, the Customs Tariff entries could be relied upon for classification under the CETA. They highlighted the HSN Notes stating that parts and accessories of motor vehicles, including incomplete bodies, are classified under Heading 8708, not under Heading 8707. They argued that the FES does not constitute the body of the vehicle.

After considering the rival entries and legal positions, the Tribunal held that parts and accessories of motor vehicles, including parts of bodies, are correctly classifiable under Heading 8708. The Tribunal emphasized the alignment of the Customs Tariff entry 87.08, which specifically covers parts of bodies of motor vehicles, supporting the classification of the FES under Chapter Heading 8708. Consequently, the impugned order was set aside, and the appeals filed by the appellants were allowed with any consequential relief.
2008 (8) TMI 654

Issues involved: Alleged wrongful utilization of Cenvat credit for payment of central excise duty on exempted goods and imposition of penalty u/s 11D of the Central Excise Act, 1944.

Summary:
The Appellants, engaged in manufacturing dutiable and exempted goods, were accused of wrongly using Cenvat credit for paying central excise duty on exempted goods to pass the benefit to consignees. The Adjudicating Authority confirmed the amount collected as central excise duty and imposed a penalty, upheld by the Commissioner (Appeals).

The Appellant contended that they availed Cenvat credit on Stainless Steel Scrap clearance, paid duty, and did not retain any amount, thus Section 11D should not apply. They argued that the amendment to Section 11D by the Finance Act, 2008, exempts those who pay duty collected from customers.

The Department reiterated that the duty paid on Aluminium Scrap, being nil rated, should be deposited in the Government Account u/s 11D. After considering both arguments and precedents, it was found that the Appellant paid duty on exempted goods, did not retain collected amounts, and thus Section 11D did not apply. Citing relevant case law, the Tribunal ruled in favor of the Appellant, setting aside the impugned order and allowing the appeal with consequential relief.
2008 (8) TMI 653

Issues:
Appeal against Commissioner (Appeals) order regarding duty on sale of waste and scrap of capital goods without proper declaration and invoice.

Analysis:
The appellant was availing credit on inputs and capital goods under specific rules of the Central Excise Rules, 1944. It was found during checking that waste and scrap of capital goods were sold by the appellant using "stores challans" without proper declaration. The original authority demanded duty of Rs. 7,05,731/- along with a penalty for the same. The Commissioner (Appeals) upheld this decision.

The appellant argued that the waste and scrap sold were from non-modvated goods related to capital goods purchased before 1994 when Modvat credit on capital goods was not available. They claimed that the detailed chart of waste and scrap, including rejected packing material, was not considered. Additionally, they contended that the annexure to the show cause notice did not specify that the waste and scrap were from capital goods purchased after 1994.

The Tribunal considered the submissions from both sides. It was noted that the documents provided by the appellant were legible, contrary to their claim. The authorities found that the waste and scrap in question related to capital goods received after the introduction of Cenvat credit on capital goods. The invocation of the extended period for demand was deemed justified as the sale of waste and scrap had not been disclosed to the department. The penalty imposed was reduced to Rs. 1,00,000/- due to the nature of the goods involved.

In conclusion, the Tribunal upheld the demand for duty and interest but reduced the penalty imposed on the appellant. The appeal was disposed of accordingly.
2008 (8) TMI 652

Issues: Denial of input duty credit and interest demand based on CENVAT credit rules.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issue revolved around the denial of input duty credit amounting to Rs. 56,187/- and the demand for interest of Rs. 13,859/- by the lower authorities for the period of February to May, 2006. The denial of CENVAT credit was due to duty-paid inputs received by the appellants and subsequently returned for rectification of defects noted therein. The demand for interest was related to CENVAT credit taken on duty-paid inputs received from the manufacturer/supplier and returned for a similar purpose, but not within the prescribed period of 180 days as per Rule 4 [5(a)] of the CENVAT Credit Rules, 2004.

The crux of the challenge against the impugned demand lay in the interpretation of Rule 4[5(a)] of the CENVAT Credit Rules, 2004. This rule allows for the admissibility of CENVAT credit on duty-paid inputs even if they are removed for further processing, testing, repairing, or reconditioning by a job worker, provided the goods are returned within 180 days. Failure to receive the processed inputs within this timeframe would require the manufacturer of the final product to pay an amount equivalent to the CENVAT credit taken thereon. In this case, one consignment of inputs was not returned within the prescribed period, leading to the demand for reversal of credit. However, the inputs sent for repair to the supplier were received back within the stipulated period, absolving the appellants from the obligation to reverse the credit or pay interest on the first category of inputs.

Ultimately, the Tribunal ruled in favor of the appellants, granting a waiver of pre-deposit and stay of recovery as requested. This decision was made after a thorough examination of the records and hearing both sides, highlighting the importance of compliance with the CENVAT Credit Rules in claiming and utilizing input duty credit.
2008 (8) TMI 651

Issues: Delay in filing appeal; Condonation of delay

The judgment by Appellate Tribunal CESTAT, Mumbai dealt with the issue of delay in filing an appeal and the application for condonation of such delay. The appellants claimed a delay of ten months due to financial problems faced by their factory, leading to the absence of necessary personnel to handle the appeal. The excise supervisor had left, and there was no excise clerk available to attend to the matter. The order was received but not acted upon until much later, resulting in the delay. However, the tribunal noted that the reasons presented were not adequately supported by evidence. The tribunal found that the appellants failed to diligently pursue the matter despite being aware of the proceedings and the need to follow up on the appeal's outcome. Consequently, the tribunal declined to condone the delay, leading to the dismissal of both the stay application and the appeal. The judgment emphasizes the importance of timely action and diligent pursuit of legal matters, highlighting the consequences of negligence in such proceedings.
2008 (8) TMI 650

Issues:
1. Confiscation of waste oil declared as fuel oil.
2. Imposition of fine in lieu of confiscation when goods are not available for confiscation.

Confiscation of Waste Oil:
The case involved the importation of old vessels along with remnant oil declared as fuel oil, diesel oil, and lube oil for breaking/scrapping. Subsequently, it was found that the goods declared as fuel oil were actually off-specification waste oil. The Additional Commissioner proposed confiscation of the waste oil and imposed penalties. The Commissioner (Appeals) set aside the confiscation of 87.345 MT of waste oil but upheld the confiscation of 2.871 MT, reducing the penalty. The Revenue appealed against setting aside the confiscation of 87.345 MT of waste oil. The issue was whether the waste fuel should be held liable for confiscation and if a fine could be imposed in lieu of confiscation even when the goods were not available for confiscation.

Imposition of Fine in Lieu of Confiscation:
The Tribunal considered conflicting views on whether a fine in lieu of confiscation could be imposed under Section 125 of the Customs Act, 1962 when the goods were not available for confiscation. Citing precedents, the Tribunal noted the divergence in opinions on this issue. While some cases allowed the imposition of a fine even when goods were not available for confiscation, others held that no fine could be imposed in such circumstances. Given the conflicting views, the Tribunal decided to refer the case to a Larger Bench for resolution.

In conclusion, the Tribunal forwarded the case to the Hon'ble President to constitute a Larger Bench to resolve the conflicting views on the imposition of a fine in lieu of confiscation when goods are not available for confiscation.
2008 (8) TMI 649

Issues involved:
1. Validity of demand notice issued without a show cause notice.
2. Applicability of Section 11A of the Central Excise Act.
3. Sustainability of appeal against the notice of demand.
4. Justification of passing the impugned order by the Commissioner.

Analysis:

Issue 1: Validity of demand notice issued without a show cause notice
The Appellate Tribunal observed that the department proceeded to recover amounts without issuing a show cause notice, which is a violation of the procedure under Section 11A of the Central Excise Act. The Tribunal held that such a demand notice is unsustainable as it does not follow the prescribed legal process. The Tribunal emphasized that the demand notice should be set aside in such cases, as it has been consistently held in various judgments by higher courts and tribunals.

Issue 2: Applicability of Section 11A of the Central Excise Act
The learned Counsel argued that any demand should only be recovered after due process of law, which includes issuing a show cause notice as mandated by Section 11A of the Central Excise Act. The Tribunal agreed with this argument, highlighting that the Revenue cannot directly proceed to issue a demand notice without following the procedure laid down in Section 11A. This indicates the importance of adhering to the statutory provisions for recovery of amounts in excise matters.

Issue 3: Sustainability of appeal against the notice of demand
The Commissioner (A) had dismissed the appeal on the ground that no decision or order had been passed in the case, making the appeal not sustainable under Section 35 of the Act. However, the Tribunal disagreed with this reasoning, stating that the appeal against the notice of demand is indeed maintainable, especially when the demand notice itself is found to be unsustainable due to procedural irregularities.

Issue 4: Justification of passing the impugned order by the Commissioner
The Tribunal found that the impugned order passed by the Commissioner (A) was not justified, as it failed to consider the procedural lapses in issuing the demand notice without a show cause notice. By setting aside the impugned notice of demand and the Order-in-Appeal, the Tribunal allowed the stay application and appeal, granting the Revenue the liberty to proceed with recovery following the principles of natural justice and the requirements of Section 11A of the Central Excise Act.

In conclusion, the Appellate Tribunal's judgment emphasized the importance of adhering to the statutory procedures, particularly the issuance of show cause notices before demanding amounts in excise matters. The decision highlighted the significance of following due process and ensuring procedural fairness in such cases.
2008 (8) TMI 648

The Appellate Tribunal CESTAT, New Delhi dismissed the revenue's appeal regarding the benefit of Notification No. 18/95-C.E. for goods manufactured by the respondent, engaged in producing Micro Cellular Rubber Sheets. The Tribunal found no evidence that the goods were not used for the intended purpose, citing a previous case where a similar appeal was dismissed. The appeal was therefore dismissed.
2008 (8) TMI 647

Issues:
1. Allegation of goods being of foreign origin.
2. Justification of seizure and confiscation.
3. Application of cited case law.
4. Nature of seized goods.
5. Consideration of circumstances for a lenient approach.
6. Determination of redemption fine and penalty reduction.

Analysis:

1. The case involved an allegation regarding the foreign origin of the impugned goods. The Appellant argued that since the Department failed to prove the foreign origin of the goods, the seizure, confiscation, and penal action were unjustified. The Appellant contended that the impugned goods were for local sale, and the Department did not establish their foreign origin.

2. The Departmental Representative highlighted that the seized goods were alleged to be of Bangladeshi origin, including scrap, coins, and medals. The circumstances, such as the goods being carried at night and the evasive actions of the truck's driver and cleaner upon detection by Customs Authorities, indicated a contraband nature. The lower appellate Authority correctly determined that the cited case law did not apply to the present situation.

3. The Tribunal considered the submissions from both sides and acknowledged the decision of the Hon'ble Calcutta High Court in a similar case where the Department failed to prove the foreign origin of the goods. However, in the present case, the Department alleged Bangladeshi origin based on the nature of the seized goods, leading to a different conclusion.

4. Despite the contraband nature of the seized goods, the Tribunal recognized that the Appellants had no prior offenses and thus adopted a lenient approach. The Tribunal deemed absolute confiscation impractical due to the nature of the goods and ordered the release of the impugned goods upon payment of a redemption fine amounting to 25% of the seizure value.

5. In addition to the redemption fine, the Tribunal reduced the redemption fine on the seized vehicle and the penalty imposed on the four Appellants. The redemption fine on the seized vehicle was reduced from Rs. 1,00,000 to Rs. 75,000, and the penalty on each Appellant was reduced to Rs. 15,000. The Tribunal partially allowed the Appeals and disposed of all Stay Petitions accordingly.
2008 (8) TMI 646

Issues:
1. Condonation of delay in filing an appeal before the Appellate Tribunal.
2. Stay of operation of the impugned order.

The judgment by the Appellate Tribunal CESTAT, CHENNAI, involved two applications by the Revenue (appellant) - one for condonation of delay of the appeal and the other for a stay of operation of the impugned order. The impugned order was received by the Commissioner of Customs on 31-10-2007, and the appeal was filed on 8-4-2008, with a delay of 70 days. The period of limitation prescribed for an appeal to the Tribunal under Section 129A of the Customs Act is three months from the date of communication of the order. The order requires review by a Committee of Commissioners if challenged by the department. In this case, the Committee reviewed the order on 4-4-2008, and the appeal was filed on 8-4-2008. However, the delay in filing the appeal was solely attributed to the Committee of Commissioners, with no explanation provided for the delay. The Tribunal emphasized that the entire delay on the part of the Committee needed to be explained, and as no satisfactory explanation was given, the application for condonation of delay was dismissed, leading to the dismissal of the appeal as well.

The judgment highlighted the importance of complying with the prescribed timelines for filing appeals before the Appellate Tribunal under the Customs Act. It underscored the significance of the review process by the Committee of Commissioners when challenging orders of the Commissioner (Appeals) and the subsequent requirement for the proper officer to appeal on behalf of the Committee to the Tribunal. The Tribunal emphasized that any delays in the appeal process, especially those caused by the Committee of Commissioners, needed to be adequately explained to warrant condonation. In this case, the failure of the Committee to provide a valid reason for the delay led to the dismissal of the application for condonation and the subsequent dismissal of the appeal itself.

The judgment elucidated the procedural requirements under Section 129A of the Customs Act, particularly regarding the review process by the Committee of Commissioners and the subsequent filing of appeals before the Appellate Tribunal. It reiterated that the onus was on the appellant, in this case, the Committee of Commissioners, to provide a satisfactory explanation for any delays in the appeal process. The Tribunal's decision to dismiss the application for condonation and the appeal itself underscored the importance of adherence to procedural timelines and the necessity of providing justifiable reasons for any delays in the legal proceedings before the Tribunal.
2008 (8) TMI 645

Issues:
Import and clearance of Actone under DFRC Licence at nil rate of basic customs duty.

Analysis:
The dispute in this case revolves around the import and clearance of 74.175 MTs. of Actone under a DFRC Licence at a nil rate of basic customs duty, as per Exemption Notification No. 46/2002. The issue arose when the Revenue contended that acetone could not be considered a cleaning agent for sugar, leading to proceedings against the respondents. The Commissioner (Appeals) extended the benefit to the respondents based on their submission, which included references to technical journals and a book on sugar manufacture in India. The Commissioner observed that the acetone imported could be used as a cleaning agent in various industries, including sugarcane, and allowed the clearance of imported goods against the DFRC licence. The Revenue challenged this decision, arguing that the input/output norm specified by DGFT mentioned Sodium Loryal Sulphate as a cleaning agent, not acetone. However, the Tribunal found no issue with the Commissioner's decision, noting that the licence permitted the import of cleaning chemicals in addition to Sodium Loryal Sulphate. Therefore, the Tribunal rejected the Revenue's appeal, upholding the Commissioner's order.

This judgment highlights the importance of interpreting the terms of a licence accurately and considering the practical applications of imported goods in various industries. The Tribunal's decision emphasizes the need to establish a clear nexus between the goods exported and imported against a licence. Additionally, the case underscores the significance of providing relevant evidence, such as references to technical literature, to support arguments regarding the intended use of imported goods. The Tribunal's analysis showcases a meticulous review of the licence terms and the specific mention of cleaning agents, ultimately leading to the rejection of the Revenue's appeal and the affirmation of the Commissioner's decision in favor of the respondents.
2008 (8) TMI 644

Issues Involved: Alleged evasion of duty on imported old news paper, validity of end-use certificates, admissibility of statements recorded under Section 14 of the Central Excises and Salt Act in proceedings under Customs Act, basis for demanding duty, limitation period for issuing show cause notice.

Summary:

Alleged Evasion of Duty:
The case involved allegations of diversion of imported old news paper and manipulation of raw material accounts by the appellant. The Commissioner confirmed a demand of Rs. 9,60,960/- as duty payable on the imported material and imposed a penalty of Rs. 1,00,000/- under Section 112A of the Customs Act. The appellant contended that genuine certificates issued by the Supdt. of Central Excise were produced to prove the usage of imported material for pulp manufacturing, and challenged the fraud allegations.

Validity of End-Use Certificates:
The appellant argued that the end-use certificates issued by the Central Excise Authority were genuine and not proven false. They relied on previous decisions to support their claim that once genuine certificates are produced, unsubstantiated allegations of fraud cannot invalidate them. However, the Tribunal found the facts of previous cases cited by the appellant to be distinguishable from the present case.

Admissibility of Statements under Section 14:
The appellant contended that statements recorded under Section 14 of the Central Excises and Salt Act could not be used in proceedings under the Customs Act. The Tribunal disagreed, stating that the evidence obtained from such statements indicated diversion of imported material and manipulation of accounts, justifying their admissibility in the case.

Basis for Demanding Duty:
The appellant raised concerns about the lack of clarity regarding the basis for the duty demanded, arguing that without proper explanation, the demand could not be substantiated. However, the Tribunal noted that the show cause notice provided details of the imported consignments, and any arithmetical errors could have been pointed out by the appellant.

Limitation Period for Show Cause Notice:
The appellant argued that the show cause notice issued on 8-9-1987 was beyond the limitation period, as the imports took place between 14-8-1984 to 8-3-1985. They contended that the extended period of limitation could not be invoked due to the issuance of end-use certificates after each importation. The Tribunal rejected this argument, upholding the demand of duty and penalty imposed by the Commissioner.

In conclusion, the Tribunal rejected the appeal and upheld the impugned order, emphasizing the evidence of diversion and manipulation, the validity of end-use certificates, and the admissibility of statements recorded under Section 14 in the Customs Act proceedings.
2008 (8) TMI 643

Issues:
1. Limitation period for issuance of show cause notice in a case of clandestine removal.

Analysis:

Issue 1: Limitation period for issuance of show cause notice in a case of clandestine removal

The case involved the appellant, engaged in fabric processing, facing shortages detected during a visit by Central Excise officers. A show cause notice was issued proposing demand of duty and penalties, which was upheld by the original adjudicating authority and the Commissioner (Appeals). The appellant challenged the order on the grounds of limitation, arguing that the notice issued after a significant period was time-barred. The appellant relied on various Tribunal decisions to support their contention.

The Revenue, on the other hand, argued that the case involved clandestine removal, allowing a 5-year period for the issuance of a show cause notice. They cited a Supreme Court decision in the case of Mathania Fabrics to support their stance that the period for issuing the notice should be reckoned from the date of admission of suppression.

The Tribunal examined the completion of investigations by December 2003, when the last statement of the Director was recorded. Referring to precedent decisions, the Tribunal highlighted that a notice issued after a lapse of more than six months from the officers' visit to the factory is considered time-barred. Notably, decisions such as Lovely Food Industries and Jetex Carburrettors Pvt. Ltd. emphasized the importance of timely issuance of notices after completion of investigations.

Ultimately, the Tribunal set aside the impugned order on the grounds of limitation, disagreeing with the reliance placed on the Larger Bench decision and the Supreme Court decision cited by the Revenue. The Tribunal clarified that the 5-year period mentioned in the Supreme Court decision was specific to cases of admitted suppression, not applicable to the present scenario. Consequently, the appeals were allowed based on the limitation issue, providing relief to the appellants.

In conclusion, the Tribunal's detailed analysis of the limitation period for issuing show cause notices in cases of clandestine removal, supported by relevant legal precedents, led to the setting aside of the impugned order and the allowance of the appeals on the limitation issue.

*(Pronounced in the open Court on 26-8-2008)*
2008 (8) TMI 642

Issues involved: Application for fixation of brand rate, delay in filing application, jurisdiction of the Tribunal.

Summary:
The Appellants applied for fixation of brand rate for exports made on 14-3-01 but filed the application beyond the permissible 90 days. The Joint Secretary directed them to file an appeal before the Tribunal. However, as there was no rejection of the Drawback Claim by the Commissioner or Jurisdictional Commissioner, the Tribunal found no basis for entertaining a Revision Application or Appeal. The Appellants were actually seeking relaxation of the delay period under Rule 17 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, which should be done through the Central Government, not the Tribunal. The Tribunal concluded that it had no jurisdiction to address the appeal, leading to its dismissal.
2008 (8) TMI 640

Issues: Department's application for recall of Misc. Order No. 191/08 and extension of time for refund grant.

In the judgment by the Appellate Tribunal CESTAT, CHENNAI, the department filed an application seeking to recall Misc. Order No. 191/08 or extend the time for granting a refund to the respondents following Final Order No. 1292/2007. The department had previously challenged Misc. Order No. 191/08 in the Hon'ble High Court, but the challenge was dismissed, affirming the order. The alternative request was for an extension of time, which the department sought, but the tribunal noted that an appeal by the department against the final order was pending before the High Court. The High Court emphasized the department's obligation to implement the final order despite the pending appeal. Consequently, the tribunal declined the long extension sought by the department and directed the refund to be granted to the respondents within 7 days of receiving a certified copy of the order. The tribunal allowed the department's application only to the extent of granting the refund within the specified timeframe. The judgment was dictated and pronounced in open court.
2008 (8) TMI 639

Issues:
1. Appeal against dropping demand of duty
2. Appeal against sanctioning refund after dropping demand

Analysis:
1. The first issue pertains to the appeal against the dropping of duty demand of Rs. 1,01,136 by the department, alleging clandestine removal of goods by the respondents. The case originated from the recovery of chits/papers from the factory indicating the sale of ball bearings without duty payment or invoices. The Managing Director initially admitted to selling bearings to a specific entity without invoices. However, the buyer later submitted an affidavit denying such transactions and confirming payment for 4 consignments through cheques. The Managing Director, upon further inquiry, retracted his original statement, claiming uncertainty about the buyer's identity. The Assistant Commissioner dropped the proceedings due to lack of corroborating evidence from the department. The Commissioner (Appeals) upheld this decision, leading to the Revenue filing an appeal challenging these orders.

2. The second issue concerns the appeal against the sanctioning of a refund following the dropping of the duty demand. The Revenue argued that the Managing Director's clear admission, the recovery of incriminating documents, and the absence of a retraction from the second statement warranted confirming the demand. The Tribunal noted that the Managing Director's admission, made after the retraction of the initial statement, was crucial. Additionally, the recovery of chits/papers indicating clandestine removal remained uncontested. The Tribunal cited the principle that admissions need not be proven and emphasized the lack of retraction from the second statement. Consequently, the Tribunal upheld the appeal, confirming the duty demand of Rs. 1,01,136 and imposing a penalty of Rs. 26,911 under section 11AC. The liability for these amounts was also confirmed concerning the consequential refund received by the respondents.

In conclusion, the Tribunal's decision favored the Revenue's appeals, emphasizing the significance of the Managing Director's admissions and the unretracted second statement in establishing the duty demand. The lack of corroborating evidence from the department, coupled with the recovery of incriminating documents, supported the Tribunal's ruling in confirming the demand and imposing a penalty.