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Central Excise - Case Laws
Showing 61 to 80 of 188 Records
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2014 (10) TMI 633
Waiver of pre deposit - manufacture of Lubricating Oils of different grades - Valuation of goods - Held that:- According to Section 4(1)(a) of the Central Excise Act, 1944, "value shall, in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of goods are not related and the price is the sole consideration for the sale, be the transaction value." It is thus evident from the above that the value is to be determined with reference to the value prevailing for delivery at the time and place of removal. In any other case, the value be determined in such manners, as may be prescribed. Central Excise Valuation (Determination of Price of Excisable Goods), Rules, 2000 has been framed for this purpose. Value as per Valuation Rules is defined to mean, the value referred to Section 4 of the Act. Accordingly, we are of the opinion that even for the purpose of Rule 8 of the Valuation Rules, cost of manufactured goods is to be taken for calculating the value as the said cost at the time and place of removal of the goods. As such, the assessee ought to have taken the cost of production prevailing during the relevant period of removal of the said goods to their sister units.
According to Rule 7 of the Central Excise Rules, 2002, where the assessee is unable to determine the value of excisable goods, they may request the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excises, as the case may be, in writing/giving reasons for payment of duty on provisional basis. However, in the case, the assessee has not done so, in spite of their inability to determine the correct value. Rule 7 also provides that in case of excess payment, the assessee is entitled to a refund, consequent to an order of final assessment. No financial hardship is pleaded - Partial stay granted.
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2014 (10) TMI 599
Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that:-in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay.
However, as observed by the Hon’ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (2005 (1) TMI 114 - SUPREME COURT OF INDIA), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely.
It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. - Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. - Matter remanded back - Following decision of Commissioner Versus Small Industries Development Bank of India[2014 (7) TMI 738 - GUJARAT HIGH COURT] - Decided partly in favor of revenue.
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2014 (10) TMI 598
Imposition of penalty - Failure to pay tax by due date - Held that:- provision for minimum mandatory penalty equal to the amount of duty even for slightest bonafide delay without any element of discretion is beyond the purpose of legislation. The object of the rule is to safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, an can be punished or a penalty could be imposed is not a blanket power without providing for any justification. In the Indian Constitutional scheme, power of legislature is circumscribed by fundamental rights. Judicial review of legislation is permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test. impugned provision to the extent of providing for mandatory minimum penalty without any mens rea and without any element of discretion is excessive and unreasonable restriction on fundamental rights and is arbitrary. Moreover, exercise of such power by way of subordinate legislation is not permissible when rule making authority for levying penalty is limited to default "with intent to evade duty" - no substantial question of law arises - Following decision of Bansal Alloys & Metals (P.) Ltd.'s case [2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT] - Decided against Revenue.
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2014 (10) TMI 597
Prayer to quash demand notice - Held that:- 1st petitioner had preferred an appeal and an interim order had been passed. The appeal being a special bench appeal, there was a direction to transfer the same to CEGAT, New Delhi. Stay was also granted pending disposal of the appeal. There is no material to indicate that the appeal has been disposed of so far. Ext. P2, an answer to the query under the Right to Information Act, indicates that the Assistant Registrar of the 1st respondent Tribunal has informed that the status of the special appeal could not be traced out and efforts were taken to trace the relevant records and registers and that after the records are traced out, the status of the appeal will be intimated. Ext. P2 communication is dated 8.8.2008. The fact remains that so far the abovementioned appeal has not been decided by any of the authorities. As matters stand now, Ext. P2 is the last communication by which the petitioner was informed that the records are not available. Under such circumstances, it is necessary in the interest of justice that the records are re-constructed and for that purpose, the petitioners as well as respondent authorities shall make necessary arrangement for production of copies of the available records, ie. memorandum of appeal as well as connected records and the 1st respondent has to consider the matter and pass appropriate orders in accordance with law. Until such time, recovery pursuant to Ext. P7 has to be kept in abeyance. - Until disposal of the appeal, recovery of amounts pursuant to Ext. P7 shall be kept in abeyance - Decided partly in favour of assessee.
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2014 (10) TMI 596
100% EOU - reversal of Cenvat credit - assessee contended that the clearances were made against CT-3 certificate issued in terms of Notification No.22/2003 dated 31.03.2003 by the customs authorities and that such clearances made to EOUs/EHTPs have the status of deemed exports and therefore, there is no need to reverse the credit involved. - Held that:- EOU is entitled to procure goods duty free. Such procurement is permissible only subject to fulfillment of condition of the exemption notification. Further, the decision of Larger Bench of the Tribunal in Lakshmi Automatic Loom Works Ltd., [2008 (10) TMI 57 - CESTAT CHENNAI] deals with only reversal of input as such and not removal of used capital goods. In the instant case, the assessee is having Domestic Tariff Area (DTA) Unit in the ground floor. It is having Electronic Hardware Technology Parks (EHTP) Unit in the first floor. The assessee while purchasing the capital goods as well as inputs to its DTA unit has paid duty. Therefore, it has availed Cenvat credit. In so far as the capital goods are concerned, it was used by the assessee in DTA unit. Thereafter, with the permission of the authorities in terms of the Rules 11 and 20 of the Central Excise Rules 2002 and Clause (6) of the Notification No.22/2003, the assessee removed the said goods from DTA unit to EHTP unit.
Capital goods purchased for DTA unit was used, it was not removed as such and when it was removed to EHTP unit again, they have no liability to pay the credit. This aspect has been completely missed by the authority. They proceeded on the assumption that user industry thereby mean EHTP unit was not bringing excisable goods directly from the factory of manufacture or warehouse and therefore they are not eligible for exemption. In the light of the aforesaid Notification which granted exemption, it is very clear that EHTP unit is entitled to exemption of payment of duty. Therefore, the assessee rightly availed the Cenvat credit and then reversed it when those goods were moved to EHTP unit and claimed refund. - Decided in favor of assessee.
Whether the assessee was not liable to pay any duty when capital goods after it is being used was removed to the EOU unit - Held that:- In so far as the inputs are concerned, it is not in dispute that the assessee while purchasing the said goods for its DTA unit has paid duty. It is only when those inputs as such were removed to the EHTP unit, the Cenvat credit availed was reversed. It is because, if the assessee had purchased those inputs for its EHTP unit by virtue of aforesaid Notification, there was no duty payable, as the said inputs were removed with the previous permission of the department as reflected in CT-3. There was no liability to pay the duty and already Cenvat credit had been taken, it was reversed under protest and therefore, they were entitled to the refund of the said amount. - Decided against Revenue.
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2014 (10) TMI 594
CENVAT Credit - Credit taken on furnace oil - furnace oil used in manufacturing of job work goods which were cleared without payment of duty - Held that:- As the issue has been settled by the Hon'ble High Court of Bombay in the case of Sterlite Inds. [2004 (12) TMI 108 - CESTAT, MUMBAI] wherein it has been held that if the job worker has taken any input credit on furnace oil which has been used in the job work goods and same has been cleared without payment of duty but the principal manufacturer has paid the duty on the final product, in that case Cenvat Credit on furnace oil is available to the job worker. - Decided against Revenue.
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2014 (10) TMI 560
CENVAT Credit - Exemption of fruit pulp - Held that:- credit taken on Inputs & packing materials viz. metal containers/cans lying in stock and contained in final products lying in stock - Even though final product may be exempt from payment of excise, the assessee cannot be asked to reverse the MODVAT/CENVAT credit already taken by it - A right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs, that right would continue until the facility available thereto gets worked out or until those goods existed - Decided against Revenue.
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2014 (10) TMI 559
Area Based Exemption - whether the non-filing of declaration in terms of notification would result in denial of benefit of notification - assessee filed the declaration on 14.3.2008. - difference of opinion - Majority order - Exemption notification No. 50/2003-CE - Bar of limitation - Held that:- the condition regarding filing of declaration in the prescribed format as prescribed in the first para of the Exemption Notification has been prescribed to prevent the mis-use this exemption and to enable the Jurisdictional Central Excise Officers to detect well in time if an assessee is wrongly availing of the exemption whether deliberately or otherwise. - the Appellant Company is not eligible for exemption for the period prior to 14.03.08. Moreover when the notification itself provide that the option for exemption shall courts cannot extend the benefit of this exemption for the period prior to the date of opting for the exemption, therefore, on merits, the case is in the Department’s favour.
Demand is barred by limitation having been raised by show cause notice dated 31.3.11 for the period 20.5.2006 to 13.3.2008 invoking the extended period of limitation. In terms of section 11 A of the Central Excise Act, 1944, the extended period is available to the Revenue in case duties have not been paid by reason of fraud, suppression or any willful mis-statement with intent to avail payment of duty. When the appellant was not required to pay any duty, if they would have exercised their option in writing, where is the question of malafide intention to evade payment of duty. Otherwise also we find that investigations were made by the Revenue with the appellants authorised representative, immediately after filing of declaration by them on 14.3.08, even then the show cause notice was issued in 2011. We find no justification for the same and agree with the learned advocate that the demand is wholly barred by limitation. The same is accordingly set aside along with setting aside of the penalties imposed upon both the appellants. - Decided in favour of assessee.
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2014 (10) TMI 558
Denial of the benefit of duty exemption - Notification 21/2002-Cus dated 01/03/2002 - "instruments and implants for severely physically handicapped patients and joint replacements and spinal implants including bone cement. - goods on which respondent claimed the exemption are Depth gauges, Impactors, Hammers, etc. - Held that:- Exemption covers both instruments and implants. The argument of the Revenue that instruments should also be implanted does not flow from the wordings of the entry. So long as the instruments are for severely physically handicapped patients or for joint replacements or they are in the nature of spinal instruments these would be eligible for the benefit of the said exemption. Therefore, the argument of the Revenue that the instruments should also be implanted cannot be sustained in law. However, we observe that the instruments should be for severely physically handicapped patients or for joint replacements or spinal instruments. From the product literature and write-up submitted by the respondent-assessee, it is not clear that these are for ‘severely handicapped patients'. To establish this fact expert opinion is required and, therefore the respondent-assesssee should be given an opportunity to lead expert opinion on the matter so as to establish their claim for exemption. The expert opinion can be by way of affidavits of leading orthopaedic surgeons or from hospital rendering such services. - Matter remanded back - Decided in favour of Revenue.
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2014 (10) TMI 557
Benefit of CENVAT Credit - manufacture of exempted and dutiable finished products - contravention of the provisions of Rule 57AD of the erstwhile Rules - Held that:- In the case of Burn Standard Co. Ltd. (2013 (2) TMI 35 - Madras High Court) the period of dispute was Apr.'08 to Dec.'08 under Rule 6 of the Cenvat Credit Rules. The Tribunal set aside the order and allowed the appeal by remanding the matter to the adjudicating authority to decide the matter afresh in the light of retrospective amendment to the Rules along with application filed by the assessee under Section 73 of the Finance Act, 2010. In the present case the period of dispute is March, 2000 to Jan.'01 under Rule 57CC/57AD of the erstwhile Central Excise Rules, 1944 and Revenue had not disputed the reversal of credit of ₹ 11,342/- in their grounds of appeal. - Decided against Revenue.
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2014 (10) TMI 556
Reversal of CENVAT Credit - Assessee contends that excess amount of Cenvat Credit reversed by the appellant, where lesser Cenvat Credit was required to be reversed at the time of clearance of inputs as such, is required to be adjusted while calculating the correct demand of reversal of Cenvat Credit - Held that:- On the issue of reversal of Cenvat on inputs at the time of their clearance as such appellant is not agitating the issue on merits. However, it is the case of the appellant that excess Cenvat Credit reversed by the appellant should be adjusted against the short payment made. Prima facie, there is substance in the argument made by the A.R. that getting refund of excess Cenvat Credit reversal on cenvatable invoices is a separate proceedings and cannot be adjusted against short reversal. Appellant has, therefore, not made out a case for waiver of interest with respect to the confirmed demands and are required to be put to certain conditions. Accordingly, appellant is directed to deposit an amount of ₹ 60,000/- within eight weeks - Partial stay granted.
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2014 (10) TMI 526
Waiver of pre-deposit – Stay application - Classification of micronutrients - Whether the mixture of micronutrients can be considered as other fertilizers or not – Held that:- Following the decision in CCE, Bangalore Versus M/s. Karnataka Agro Chemicals [2008 (5) TMI 14 - SUPREME COURT] – assessee contended that the product(s) is a mixture of various inorganic substances whose essential constituent is nitrogen which makes it a fertilizer - the scientific study indicates that PGRs are organic compounds, other than nutrients - As compared to nutrients which play a major role in the plant growth as a whole, PGRs play a restrictive role - essentially the product is PGR - PGR do not contain N, P or K - according to the Chemical Examiner's report submitted by the assessee and it forms part of the records and not disputed by the Revenue, micronutrient fertilizers manufactured by the appellants contain N, P or K - the assessee have made out a prima facie case on merits – the pre-deposits waived during the pendency of appeal – Stay granted.
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2014 (10) TMI 515
CENVAT Credit - Freight GTA - Whether Tribunal was justified in denying the cenvat credit of service tax paid and freight paid by M/s. Parle on inward and outward transportation (from the Appellants' factory to depots of M/s. Parle) on the ground that depots of M/s Parle cannot be the 'place of removal' and that freight charges were not borne by the Appellants but M/s. Parle - Held that:- Clear finding, which has been recorded both by the Commissioner (Appeals) and by the Tribunal, is that the sale had not taken place on an "FOR Destination" basis. Hence, the place of removal in the present case is the factory gate of the appellant and not the Depot of Parle Biscuits. As a matter of fact, as held by the Commissioner (Appeals), the liability on account of freight is borne by Parle Biscuits. No amount was borne by the appellant towards freight under the agreement with Parle Biscuits. Hence, in this view of the matter, the Tribunal was justified in coming to the conclusion that the Cenvat Credit on Service Tax paid on GTA Service availed for the transportation of the goods from the factory of the appellant to the Depot of Parle Biscuits, has been correctly denied. The view which has been taken by the Tribunal is in accordance with law - No substantial question of law arises - Decided against Assessee.
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2014 (10) TMI 514
Waiver of pre deposit - Whether the Hon'ble CESTAT erred in granting waiver of pre-deposit of assessed demand in favour of the respondents during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to section 35-C of the Central Excise Act, 1944, made through enactment of Finance Bill, 2013 - Held that:- Tribunal has noted that a waiver of pre-deposit and unconditional stay on the realisation of the adjudicated liability was granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal has not been disposed of only on account of the pendency of several older appeals and not on account of any delay on the part of the assessee. ends of justice would be met if the Tribunal is requested to dispose of the appeal expeditiously and preferably within a period of six months from today. The waiver of pre-deposit will continue to remain valid for a period of six months from date of this order - Decided partly in favour of Revenue.
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2014 (10) TMI 513
Waiver of pre deposit - Whether the Hon'ble CESTAT erred in granting waiver of pre-deposit of assessed demand in favour of the respondents during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to section 35-C of the Central Excise Act, 1944, made through enactment of Finance Bill, 2013 - Held that:- Tribunal has noted that a waiver of pre-deposit and unconditional stay on the realisation of the adjudicated liability was granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal has not been disposed of only on account of the pendency of several older appeals and not on account of any delay on the part of the assessee. ends of justice would be met if the Tribunal is requested to dispose of the appeal expeditiously and preferably within a period of six months from today. The waiver of pre-deposit will continue to remain valid for a period of six months from date of this order - Decided partly in favour of Revenue.
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2014 (10) TMI 512
Denial of CENVAT credit - Credit stand denied on the ground that the said registered dealer was not found available at the premises disclosed in his registration and his registration was cancelled with retrospective effect - Held that:- Appellant availed credit on the basis of invoices issued by the registered dealer who were carrying all the requisite particulars along with his registration number. The said invoices so received by the appellant duly stand entered by them in their RG 23A Part I register and shown to have been used in the manufacture of final product cleared on payment of duty. Apart from the general statement of the dealer of the manufacturer, there is no evidence on record to show that inputs were not actually received by the appellant or they have procured the inputs from any other sources. In the absence of inputs, the appellant could not have manufactured their final product. Accordingly, in the absence of any allegation of procurement of inputs from any other sources, the inputs received by the appellant have to be held as having been received under the cover of cenvatable invoices issued by the registered dealer. As per the provisions of Rule 7 of Cenvat Credit Rules, a manufacturer is under a legal obligation to verify the identity of the person supplying the inputs and is not expected to go beyond it and find out as to whether the supplier was procuring the goods in accordance with the law or not. - Following decision of Talson Mill Store v. CCE & ST, Ludhiana [2014 (2) TMI 443 - CESTAT NEW DELHI] - Decided in favour of assessee.
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2014 (10) TMI 511
Manufacturing activity - Printing and writing paper - Held that:- the lower appellate authority observed that by cutting paper into desired sizes does not amount to manufacture as the product remains only paper and even if duty is demanded, the appellant would be entitled to Credit on inputs - Printing and writing paper itself is classifiable under CETH 4802 90/99. By cutting into required sizes, no new product has been emerged. Therefore, cutting and slitting of paper does not amount to ‘manufacture’ - Decided against Revenue.
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2014 (10) TMI 510
Availment of Cenvat credit - Non receipt of inputs in factory - Held that:- No verification has been made with the transporters by Revenue and there is no admission or supporting evidence from transporters to prove that they have not transported the goods; three vehicles shown to have been utilized are incapable to transport the goods but no verification has been made with records maintained for receipt of the goods and nature of the goods; and the records maintained as regards receipt of goods especially with regard to two consignments said to have been received by the appellant within 44 minutes when the distance between the supplier and the appellant is more than 60 Kms also have been verified. In respect of 17 invoices where the appellant admitted the liability, description of the goods in the invoices did not tally with the records maintained by them; in respect of others there is no evidence whatsoever. Therefore, prima facie, we can say that the appellant has made out a case for waiver of balance dues. Accordingly, requirement of pre-deposit of the balance dues is waived and stay against recovery is stayed during pendency of the appeals - Stay granted.
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2014 (10) TMI 482
Demand of interest u/s 11AB on differential duty - Held that:- assessees have cleared goods and paid duty thereon and raised supplementary invoices, but however failed to pay interest payable under Section 11AB of the Act. In view of the decision of the Supreme Court in SKF India Ltd. case, referred [2009 (7) TMI 6 - SUPREME COURT], the first plea raised by the learned counsel for the appellants fails and in that regard, we find no infirmity in the order passed by the Tribunal. Section 11AA of the Act, as amended by Section 64 of the Finance Act, 2011 (8 of 2011), does not in any way advance the case of the appellant, as we find that the liability to pay interest on delayed payment of duty is clearly envisaged in Section 11A(2B) read with Explanation 2 to the said provision. Such interest was leviable even during the period in question. In fact, the Supreme Court in SKF India Ltd. case, referred supra, observed that there is some ambiguity in the said provisions, which was a cause for amendment brought to Section 11AA of the Act.
If the object of the law is to state clearly and unambiguously the obligations of the person whom the law addresses and to spell out plainly and without any confusion the consequences of failure to discharge the obligations cast by the law then the four sections of the Act fall miles short of the desired objective. Even as originally cast the provisions were far from very happily framed and worded. Subjected to amendments from time to time those provisions have now become so complicated that in order to discern their meaning it becomes necessary to read them back and forth several times. We see no reason why the two periods for which interest is leviable may not be put together and dealt with in one consolidated provision instead of being split up in sections 11AA and 11AB. Also, there is much scope to reorganise all the different subsections of section 11A and to present the scheme of that section in a more coherent and readable form.
Section 11AA of the Act, which came into effect from 8.4.2011, will have no bearing to the facts of the present case. In any event, the decision of the Supreme Court in SKF India Ltd. case, referred supra, squarely applies to the period in question and the law declared by the Supreme Court binds the issue in question. The liability of the assessee stands confirmed by the provisions of Section 11A(2B) read with Explanation 2 to the said provision and Section 11AB of the Act. Therefore, the plea of the appellants that their voluntary payment of duty would not attract interest is unacceptable and in such view of the matter, the second contention is also untenable. - Decided against assessee.
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2014 (10) TMI 481
Restoration of appeal - Whether Tribunal was justified in rejecting the first request for adjournment and deciding the appeal - Held that:- appellant should have an opportunity to urge its submission on merits before the Tribunal, subject to the payment of costs to the Revenue - without expressing any opinion on the questions of law as framed, we restore the proceedings back to the Tribunal, subject to the appellant paying costs to the Revenue quantified at ₹ 10,000. The costs shall be paid within a period of four weeks from today, failing which the appellant shall lose the benefit of this order. We clarify that all the rights and contentions are kept open. Appeal disposed of.
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