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Central Excise - Case Laws
Showing 61 to 80 of 260 Records
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2012 (12) TMI 921
SSI exemption - Limit to SSI Exemption - Revenue contends that respondent are not a separate manufacturer inasmuch as they are a division of the main manufacturer M/s. Premium Suitings (P) Ltd., UPSIDC Industrial Area, Jainpur, Kanpur and as such the aggregate value of the clearances of all excisable goods for home consumption from one or more factories of the respondent during the previous financial year were in excess of the threshold limit - Held that:- The benefit of SSI exemption is available to a manufacturer manufacturing the specified goods only if the clearances of all excisable goods manufactured by that manufacturer in one or more factories and cleared for home consumption during the previous financial year is within the specified threshold limit, which during the period of dispute was Rs. 3,00,00,000/- (Rupees Three crores). In this case, it is undisputed that the respondent i.e. chemical division of M/s. Premium Suitings (P) Ltd. is part and parcel of the main manufacturer engaged in manufacture of textiles and, therefore, the respondent unit i.e. chemical division of M/s. Premium Suitings (P) Ltd. cannot be looked at in isolation for the purpose of determining its eligibility for SSI exemption and for this purpose, the clearances for home consumption of all excisable goods of the respondent unit have to be clubbed with the clearances of excisable goods manufactured by other factories of the respondent-company during the previous financial year and on that basis, the respondent would not be eligible for SSI exemption. We, therefore, hold that the impugned order extending the benefit of SSI exemption to the respondent unit is contrary to the provisions of law and is not sustainable - Decided in favour of Revenue.
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2012 (12) TMI 920
Valuation of goods - Determination of assessable value on the basis of their MRP - Penalty u/s 11AC - Held that:- all the items which are being cleared in combination pack are notified under Section 4A for assessment of the duty on the basis of their MRP. There is also no dispute that each of the items in the combination pack was individually packed and while the individual items of the combination pack were not carrying individual MRP on them, there was MRP for the combination. There is also no dispute that the combination packs were not further packed in a bigger pack and according to the Appellant were being delivered together tied by a ribbon. The point of dispute is that as to whether in respect of clearances of such “combination packs”, duty liability is to be determined in respect of each item in the combination on the basis of its individual MRP or duty is to be calculated by treating the combination as one item on the basis of its combined MRP.
There is one more reason as to why the combined MRP of the combo pack can not be the basis for determining the assessable value under Section 4A. Rule 15 of the SWM Rules refers to the “combination pack” of dissimilar items which are actually packed in a bigger pack on which MRP is required to be declared. In this case, admittedly the combination packs of Referigerator with water purifiers, Refrigerators with washing machines or CTVs with VCD players are not actually packed in a bigger package. The “combination packs” in this case have to be treated as combination sales as a marketing strategy under which on purchase of two items refrigerator with washing machines, refrigerator with water purifier or CTVs with VCD players, the price charged is less than their individual MRP. Such combination sales, in our view, cannot be treated as “combination pack” or packaged commodity as understood in SWM Rules and have to be treated as sale of individually packed items at a combined price - Decided against assessee.
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2012 (12) TMI 919
Benefit of Notification No. 29/96-C.E. (N.T.), dated 3-9-1996 - Whether during the period of dispute, common central excise registration had been correctly granted to the appellant or not - Held that:- Manual of Supplementary Instructions, separate registration is required in respect of separate premises of the same manufacturer except in the cases where two or more premises are actually part of the same factory [where process are interlinked but are separated by public road, canal or railway line] and that the fact that the two premises are part of the same factory to be decided by the Commissioner based on the factors such as the product being manufactured in one premises being substantially used in the other premises for manufacture of final products, large number of raw materials being common, common electricity supply, common labour force, common administration/work management, common sales tax registration and assessment, common income tax assessment etc. In this case, the bulk of the yarn manufactured in the yarn unit is used in the fabric unit for manufacture of fabrics.
It is also not denied that the electricity supply of the two units is common and the sales tax assessment and administration is also common. Beside this, we also find that the appellant have one single registration under the Factories Act and Pollution Control Act and that other statutory authorities like ESI, PF etc. In view of this, we hold that the two units of the appellant company have to be treated as one factory and hence common registration certificate has been correctly granted to them. Since, during the period of dispute, they had already been issued a common registration, they have to be treated as composite mill and, hence, the benefit of Notification No. 22/96-C.E., dated 23-7-1996 for the purpose of duty exemption in respect of yarn cleared by the yarn division to fabric division and the benefit of Notification No. 29/96-C.E. (N.T.), dated 3-9-1996 for the purpose of Modvat credit to fabric division had been correctly availed and, as such, the demands for duty and Modvat credit against the appellant company are not sustainable - Decided in favour of assessee.
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2012 (12) TMI 918
Valuation of goods - Determination of assessable value of goods - Place of removal of goods - Held that:- about 17% of the sales were to independent buyers, at the factory gate and it is not the allegation of the department that those were not genuine sales and that the price was not the correct price. Therefore, the factory gate price to independent buyer would be the assessable value even in the cases under dispute, where the appellant had arranged the transportation of the goods and in addition to the factory gate price have charged freight, charges at equalised rates from the buyers. In our view even if the amount charged by the appellant towards freight at equalised rate is more than the amount of expenses incurred on freight the differential freight would not be includible in the assessable value so long as it is not the case of the department that the sale price for delivery of the goods at the factory gate to independent buyers is not the correct price or that the same had been artificially depressed and the freight expenses has been artificially inflated. The “additional consideration” which is includible in the assessable value of the goods is the consideration for the goods being sold, which is in addition to the declared sale price.
Any amount being received by a manufacturer from the buyer of the goods cannot be termed as “additional consideration” and added to the value of the goods it must be shown that it is sale of the goods, not for some other transaction. Thus if the amount being received by the Assessee is for some service like transportation, transit insurance etc. being provided to the buyer after clearance of the goods from the place of removal, that amount would not be includible on the assessable value. The burden is on the Department to prove that the price at the place of removal had been depressed and the balance price is flowing as additional consideration by inflating transportation/insurance charges.
So far as the period prior to 28-9-1996 is concerned, the price for the delivery at the factory gate would be applicable even in the cases where the appellant after clearance of the goods from the factory had arranged the delivery to the customers, as there is no allegation that the in 17% sales where the goods had been sold to independent buyers for delivery at the factory gate, the price is not the correct price and had been artificially depressed - As regards, the period w.e.f. 28-9-1996, in respect of this period, it is not the department’s case that the sales were not at the factory gate but at buyer’s premises on FOR destination basis. Once, the department accepts that the sales were at the factory gate and the price for sale at the factory gate is available, there would be no justification to reject the same and take recourse to Central Excise Valuation Rules and add the differential between the freight amount charged at equalised rate and actual freight expenses to the factory gate price - Following decision of Baroda Electric Meters Ltd. v. C.C.E. [1997 (7) TMI 126 - SUPREME COURT OF INDIA] - Decided in favour of assessee.
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2012 (12) TMI 917
Valuation of physician’s sample of medicines, - Held that:- Just because the actual transaction value is higher than MRP/abatement, proceedings cannot be initiated for recovery of duty. Since the issue is covered by the decision of the Tribunal in the case of CADILA PHARMACEUTICALS LTD. Versus COMMR. OF C. EX., AHMEDABAD-II [2008 (9) TMI 98 - CESTAT AHEMDABAD] - Decided in favour of assessee.
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2012 (12) TMI 916
Wrong availment of CENVAT Credit - Shortage of goods - Invoices not in the name of company - Held that:- shortage is admittedly because of removal on cash basis and wrong availment of Cenvat credit took place and the company could not produce evidence showing inputs. As regards wrong availment of cenvat credit in respect of 100% EOU, it can be said that the same is technical in nature, in view of the fact that there have been such similar instances before this Tribunal earlier. Therefore, it cannot be said that the appellant Co. is an exceptional one. Having regard to the fact that there is no evidence of clandestine removal other than shortage and the fact that the statement of director was not fully inculpatory, leniency as regards quantum of penalty is warranted. Accordingly, penalty imposed on the director is reduced - Decided partly in favour of assessee.
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2012 (12) TMI 915
Denial of refund claim - Place of removal - whether refund of service tax paid on CHA service in respect of export of goods is admissible or not - Held that:- In terms of Board Circular dated 23/08/2007 relied upon by the Commissioner (A) as well as decisions of this Tribunal, in the case of export of goods, place of removal has to be considered as port of export - Decided against Revenue.
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2012 (12) TMI 914
Waiver of predeposit - Denial of CENVAT Credit - Invocation of extended period of limitation - Held that:- none of the show-cause notices allege misuse of input services by any of the manufacturing units of the company. It is not in dispute that the input services received by the appellant-company under cover of valid invoices issued by the service providers were shared by the four manufacturing units. It is not in dispute that any amount of CENVAT credit in excess of what was mentioned in the relevant invoices was not taken by any of the units. The only irregularity found by the Department is that the Head Office of the company did not have ISD registration and did not issue invoices to the manufacturing units to enable them to avail CENVAT credit - Decided in favour of assessee.
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2012 (12) TMI 913
Maintainability of appeal - Held that:- Tribunal never desires to make the Revenue non-suitor but as has been observed by Hon’ble High Court of Punjab & Haryana in the case of CCE, Delhi-III vs. Office Automation Products Pvt. Ltd. [2009 (12) TMI 37 - PUNJAB AND HARYANA HIGH COURT] that cases after cases Revenue was before Hon’ble High Court with infirmity in review decision. Present appeal being one of such nature it would be difficult to entertain an appeal emanating from a review decision which has never seen light of the day before reaching Tribunal - Decided against Revenue.
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2012 (12) TMI 912
Penalty under Rule 25 - Penalty on each person separately - Held that:- The proviso to Sub-section (2) of Section 11A indicates the spirit of Sub-section (2) of section (1A) which is a different circumstance than the situation covered by Sub-section (1A). It appears that both the authorities below construed the provisions of sub-section (2) read with its proviso in erroneous manner defeating the spirit of law. In view of the above, notice is hereby issued to respondent No. 2, 3 & 4 before first appellate authority who are Shri Ashok Kumar Choudhary, Shri Bhajan Lal Agrawal and M/s. Seth Bansidhar Kedia Steel Pvt. Ltd. to show cause as to why appropriate penalty should not be imposed on them as per show cause notice issued. They are required to reply to show cause notice to the Tribunal on or before 24th January, 2013 on which date the matter is fixed for hearing further - Decided against Revenue.
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2012 (12) TMI 911
Confiscation of goods - Imposition of redemption fine - Held that:- In absence of cogent evidence corroborating such defence plea, statement of driver was found to be most reliable and credible when the goods were found to be with temperature proving to be manufacture of 20.2.2008 and possibly loaded at 0930 hrs. of 20.2.2008, when the appellants failed to produce any evidence to show that the goods were not manufactured on 20.2.2008 for transportation of goods on 20.2.2008. This clearly shows that truck was available even meeting its repair on 19.2.2008 for transportation of goods on 20.2.2008. This also proves that the invoice No. 1438 dated 19.2.2008 was used to conceal clandestine removal of the goods of 20.2.20008. So also when plea of repair of truck was advanced there was no evidence to show that the truck returned with the goods of 19.2.2008, if any loaded therein. Accordingly, it is not possible to hold that the seized goods were not cleared out of the goods manufactured on 20.2.2008 in view of peculiar circumstance of hot ingots found in truck. Entire defence plea being pulpable were without credence and edifice for which adjudication is bound to be sustained - Fine and penalty reduced - Decided partly in favour of assessee.
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2012 (12) TMI 910
Waiver of predeposit - Duty demand - Suppression or facts with intent to evade payment of duty - Held that:- We have gone through the terms and conditions of the contract between the appellant and one of the buyers. These terms and conditions pertaining to “engineering documentation” prima facie indicate that the drawings supplied by the buyer had to be used by the assessee for the manufacture of the subject goods. It is not in dispute that the specifications were developed from these drawings. Prima facie , in this scenario, at least an indirect nexus between the subject goods and the drawings/designs cannot be ruled out - we are of the prima facie view that, on applicability of Rule 6 to the transactions in question, the appellant has no case, but their challenge to the manner of value addition done by the adjudicating authority needs careful consideration. As to the plea of limitation, the appellant does not seem to have made out a convincing case - Decided against assessee.
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2012 (12) TMI 909
Revenue contends that Discrepancies claimed in respect of molasses loss by natural causes were denied and remission on 10710.50 quintals of molasses is ordered to be not permissible - Held that:- There may be volatility in the quantity in view of spirit element in molasses. But possible volatility was neither pleaded nor evidence was led by the appellant before adjudicating authority in that regard. Even that was not challenged questioning the manner of arriving at loss bringing out peculiar nature and factual circumstances. - When reasoned order of adjudication lends support to the case of Revenue it is difficult to discard the finding of adjudication. Accordingly, demand of excise duty is confirmed followed by interest, if any. It may be stated that learned Adjudicating Authority has reduced the penalty to 25% of duty element. Such an option being permitted by law, it would be proper to extend the same option of reduction in penalty confining that to 25% of duty demand which shall be reasonable and proper in the eyes of law - Decided partly in favour of assessee.
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2012 (12) TMI 885
Duty on bagasse & press-mud - manufacture of sugar and molasses in a sugar factory - seeking waiver of pre-deposit along with interest and penalty - Held that:- As decided in Indian Potash Ltd. vs. Commissioner of Central Excise, Allahabad [2012 (12) TMI 347 - CESTAT, NEW DELHI] & COMMR. OF C. EX., PONDICHERRY Versus CHEYYAR CO-OP. SUGAR MILLS LTD. [2008 (6) TMI 533 - CESTAT, CHENNAI] bagasse and press-mud are waste products and no amount under Rule 6 of the CENVAT Credit Rules can be demanded from the assessee against the exempted clearances made by them - there is no possibility of any input/chemicals having been used at that stage - pre-deposit is waived and stay granted.
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2012 (12) TMI 884
Benefit of Notification No.108/95-CE dated 28.08.1995 denied - as on completion of the project, the motor vehicles supplied by the applicant would not remain with the contractor or with the project - seeking waiver of predeposit of duty and penalty - Held that:- The expression "into" denotes "on-going"/"continuous" meaning thereby the goods in question i.e. motor vehicles should not be withdrawn from the on-going project. Admittedly, the project is financed by United Nations. The goods are still into the project and are not withdrawn from the project, is also not in dispute. In these circumstances, the applicant is able to make out a prima-facie case for total waiver of predeposit of all dues adjudged in this case and recovery thereof would stand stayed during pendency of appeal. Stay allowed.
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2012 (12) TMI 883
Duty exemption under notification no.214/86-CE denied- Cenvat credit in relation to manufacture of polyester chips on job work basis - Held that:- Duty exemption under notification no.214/86-CE to the job worker is available on the undertaking given by the principal manufacturer that he will discharge the duty liability on the final product cleared from his factory.
Tribunal in the case of Sterlite Industries (I) Ltd. (2004 (12) TMI 108 - CESTAT, MUMBAI) and the Apex Court in the case of M/s. Escorts Ltd. (2004 (8) TMI 106 - SUPREME COURT OF INDIA) have held that if any manufacturer of certain goods on job work basis, uses his own inputs, the job worker would be entitled to cenvat credit in respect of these inputs and he would not be liable to reverse the same even though the goods have been cleared to the principal manufacturer without payment of duty under notification no.214/86-CE. The ratio of these judgements is squarely applicable to the facts of this case and the appellant appear to be eligible for cenvat credit of the service tax paid on the input service availed in or in relation to the manufacture of the polyester chips on job work basis, which had been cleared to the principal manufacturer without payment of duty under notification no.214/86-CE, hence the requirement of pre-deposit of cenvat credit demand, interest and penalty is waived - Stay allowed.
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2012 (12) TMI 882
Jurisdiction of Commissioner and validity of Show cause Notice – non eligible for benefit of the Notification No.1/93 - Held that:- Commissioner had disposed of the issue in just a small paragraph and this issue and none of the other issues have been considered in detail. After the impugned order was passed judicial pronouncements have become available on the issue and further limitation, availability of Cenvat Credit, revenue neutrality are required to be considered besides jurisdiction since on these issues also interpretation of statute has to be made on the basis of judicial pronouncements and facts of the case. Whether Commissioner, Ahmedabad could not have issued the SCN at all or whether it is a rectifiable error is also a matter which requires fresh consideration. Thus it would be appropriate all the issues are examined by the learned Commissioner & remanded to the original adjudicating authority for fresh consideration.
As Hon'ble Supreme Court has already decided that the issue relating to manufacture and the brand name against the appellant, while remanding it is clear that the amount deposited by the appellant, if any, will remain with the department till the issue is decided by the original adjudicating authority. Appellant shall be given reasonable opportunity to present their case before the issue is finally decided. All the issues are kept open.
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2012 (12) TMI 856
Demand u/s 11D - Reversal of cenvat credit and collected the same from the purchasers - The Department was of the opinion that the entire transaction was irregular, was in breach of the Cenvat Credit Rules, as applicable from time to time. As per Section 11D of the Central Excise Act, therefore, the respondent was liable to refund such amount. - Held that:- The view of the Tribunal that in any case the respondent could have encashed the unutilized credit in the Cenvat account and that therefore the same did not make any difference to the Department, in our view, suffers from fallacy. Firstly, as noted, Rule 5 of the Rules, 2004 permitted refund of Cenvat credit under certain circumstances which provides that such refund shall be allowed subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification.
It can, thus, be seen that grant of refund is neither automatic nor a matter of course. Nothing has been brought on record to suggest that the respondent was entitled to such refund as a matter of right. Secondly, utilization of Cenvat credit for the purpose of payment of unauthorizedly collected so called excise duty was not permissible under the Rules. The contention of the Department that by doing so, the respondent passed on Cenvat credit to the purchaser to be availed by them ultimately which credit such purchasers were not entitled to, cannot be brushed aside.
Regarding period of limitation - held that:- Section 11D of the Central Excise Act does not provide any rigid time limit. In such cases, as so long as the recovery proceedings are initiated within reasonable time, the same cannot be struck down only as time-barred.
Demand u/s 11D confirmed - Order of Tribunal reversed - Decided in favor of revenue and against the assessee.
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2012 (12) TMI 855
Cenvat Credit on tool kits sold along with two wheelers - denial - Held that:- Clause 4(b) of Rule 138 of Central Motor Vehicle Rules, 1989 (as amended) dealing with “signals and additional safety measures” for motor vehicle makes it incumbent on driver of every vehicle to carry the tool kit prescribed by the manufacturer.
Since carrying of the tool kit in the vehicle is obligatory for the driver, it can be safely inferred that tool kit and first aid kit are necessary accessories of the motor vehicle as driving of the vehicle without those accessories would be violative of Rule 138(4)(b) of Central Motor Vehicle Rules, 1989. Thus, the appellant had supplied the tool kit as per statutory requirements under Central Motor Vehicle Rules, 1989 as accessories to be used in relation to the manufacture of vehicle. Thus, ‘tool kit' is squarely covered by the definition of ‘input’ given under Rule 2(k)(i) of CRR and that the appellant had rightly availed the Cenvat credit in relation to tool kits - in favour of assessee.
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2012 (12) TMI 854
Exemption under Notification No. 67/95-CE - Naphtha attributable to the electricity generated in the captive power plant used for allied activities such as lighting of the road, administrative office and canteen – Held that: - As decided in CCE vs Solaris Chemtech Ltd [2007 (7) TMI 2 - SUPREME COURT OF INDIA] while interpreting the provisions of Rule 57A of the erstwhile Central Excise Rules, 1944 which provides that input means inputs used for generation of intermediate electricity used within the factory of production for manufacture of final product or for any other purposes held that the electricity generated within the factory which is supplied to the residential colony of the factory, school etc to that extent credit is not admissible. The definition of input under the Cenvat Credit Rules, 2004 is also similarly worded.
Benefit of exemption notification 67/95 allowed in respect of (a) Naphtha cleared, availing exemption under Notification No.4/2006-CE dated 1.3.2006 for manufacture of fertilizers under International Competitive Bidding (ICB) and (b) On that much quantity of Naphtha, attributable to electricity generated in captive power plant/co-generation plant, used for manufacture of exempt goods viz. LPG (Domestic) and Superior Kerosene Oil (PDS)
Benefit of exemption notification 67/95 denied in respect of On that much quantity of Naphtha, attributable to electricity generated in captive power plant/co-generation plant, used for allied activities like lighting in the artillery (sic) roads/yard, administrative building, canteen/cafeteria.
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