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Central Excise - Case Laws
Showing 21 to 40 of 241 Records
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2015 (4) TMI 1143
Reversal of cenvat credit - demand of duty, interest and penalty - job work - manufacture of auto parts, components - manpower supply services - security services - Held that: - the decision in the case of Sterlite Industries (I) Ltd. vs. CCE Pune [2004 (12) TMI 108 - CESTAT, MUMBAI] relied upon where it was held that job worker is entitled to take Cenvat credit on inputs / input services if job work goods has been used by the principal manufacturer in manufacture of final product and on the said goods, the principal manufacturer has discharged duty liability.
In the definition of input service as per Rule 2(l) of Cenvat Credit Rules, 2004, security service forms inclusive part of the definition and no nexus is required by the respondent for availing Cenvat credit on security service - cenvat credit allowed - appeal allowed - decided in favor of assessee.
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2015 (4) TMI 1141
Period of limitation - Demand - non- payment of Central Excise Duty for the period 29.4.2010 to 31.3.2011 - SCN issued on 22.4.2013 - Held that:- although there are about dozen grounds taken in the appeal, but none specifically relates to any suppression of facts by the assessee. Even the questions of law which have been framed in the appeal do not specifically relate to suppression of facts. Admittedly, the appellant had paid the Central Excise Duty to the tune of ₹ 44 crores for the period 1.4.2011 to 31. 3.2013. If there was any default in deposit of duty for the period prior to 1.4.2011, the assessee could have been issued notice within the statutory period as provided under Section 11A of the Act, which in normal course would be one year, and five years in cases falling under sub-Section (4). In the absence of appellant having been able to satisfy the Tribunal on facts that the present case falls within sub- Section (4) of Section 11, the notice issued to the respondent beyond the period of one year cannot be justified in law. - Decided against the Revenue
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2015 (4) TMI 1137
Dutiability - egg shell waste emerged during manufacture of final product - Held that:- the Notification No. 23/2003-CE dated 31/03/2003 has granted exemption to food industries of 100% EOU on such waste. The Tribunal by Final Order in the case of same appellant has granted relief on the self-same issue which was never appealed by Revenue. - Decided in favour of appellant
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2015 (4) TMI 1136
Condonation of delay - 84 days - non-furnishing of details in support of his reason - Held that:- we do not find sufficient reasons supported by evidences displaying bonafideness on the part of the applicant and also no proper explanation is forthcoming supported by evidence for the inordinate delay of 84 days in filing the Appeal before this forum. The vague reason of delay selection of Counsel is also not supported by evidence with details thereof. By following the ratio laid by the Hon’ble Supreme Court in the case of Office of Chief Post Master General Vs. Living Media India Ltd. [2012 (4) TMI 341 - SUPREME COURT OF INDIA], we are of the view that the Applicant could not able to make out a case for condonation of the delay of 84 days. - Decided against the appellant
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2015 (4) TMI 1131
Assessable value - manufacturing activity - whether activity of erection, installation and commissioning of the equipment is a service and is post manufacturing activity and nothing to do with the manufacturing activity and therefore the charges recovered for the said activity will not form part of the assessable value? - Held that:- We find that it is not disputed by the Revenue that the contract receipt is relating to erection, installation and commissioning charges for the transformer and voltage stabilizer. The said erection, installation and commissioning is done by the appellant in the customer’s premises. Further the goods when cleared from the factory are ready to use and complete in all respects. Erection, installation and commissioning in the present facts and circumstances of the case cannot be considered as part of the manufacturing activity of the goods and would therefore not form part of the assessable value of the goods. These activities are post manufacturing services. In view of the Hon’ble Supreme Court’s judgment in the case of Thermax Limited (1998 (4) TMI 134 - SUPREME COURT OF INDIA ), we allow the appeal in favour of assessee.
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2015 (4) TMI 1113
Application for settlement - evasion of duty - Held that:- In the instant case, a SCN F. No. 65/KZU/KOU/Gr.A/13/5430-31, dated 23-7-2014 was issued demanding duty amounting to ₹ 18,53,489/- (including duty of ₹ 17,99,504/-, Education Cess of ₹ 35,990/- and Secondary and Higher Education Cess of ₹ 17,995/-) on a shortage of 882,110 M.T. of Sponge Iron. The evasion of duty on this quantity of 882.110 M.T. has been admitted by the applicant and also by the co-applicant, Shri Ram Chandra Rungta, in their applications for settlement. The removal of 882.110 M.T. of Sponge Iron has also been admitted by the co-applicant, Shri Ram Chandra Rungta, in his statement dated 16-4-2013. The applicants have admitted that they were engaged in unaccounted manufacture and clandestine removal of finished goods without payment of Central Excise duties in a planned manner. The co-applicant, Shri Ram Chandra Rungta, in his statement dated 16-4-2013 has also admitted that he is one of the Directors of the company and is overall in-charge of the company including production, clearance and finance including direct and indirect taxation. He has also admitted removal of 882.110 M.T. of Sponge Iron without abiding by the Central Excise formalities and also admitted that even the raw material for manufacture of the unaccounted finished goods cleared from their factory without issuing any Central Excise invoices, was also not entered in their books of Account. Thus, there is no doubt that the applicants were knowingly engaged in unaccounted manufacture and clandestine removal of finished goods without payment of Central Excise duties in a planned manner. Therefore, they do not deserve full immunity from penalty.
The Bench imposes penalty of ₹ 3,75,000/- (Rupees three lakhs and seventy-five thousand only) on the applicant M/s. Maa Chhinnamastika Cement & Ispat Pvt. Ltd. and ₹ 1,85,000/- (Rupees one lakh and eighty-five thousand only) on the co-applicant Shri Ram Chandra Rungta and grants immunity from penalty in excess of these amounts. The amounts of penalty should be paid within 30 days from the date of receipt of this order.
Prosecution - Subject to the payment of the aforesaid amounts, the Bench grants immunity to the applicants from prosecution under the Act and Rules made thereunder in so far as this case is concerned.All the above payments and appropriation should be completed within 30 days from the date of receipt of this order.
The above immunities from penalty and prosecution to the applicant and co-applicant are granted under sub-section (1) of Section 32K of the Act subject to the provisions contained in sub-sections (2) and (3) of Section 32K ibid.
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2015 (4) TMI 1112
Period of limitation - Demand of duty - Sec. 11A of the Central Excise Act, 1944 - time barred as per ground C-1 of their Memorandum of Appeal which was not argued by adjudicating authority - Held that:- it is found that their is a mistake apparent from the face of record and no findings have been given by this Bench. This mistake is required to be rectified by giving suitable observations on the time-bar aspect of Section 11A demand. It is observed from the representing GP.1s that appellant has been showing duty paid through PLA, RG-23A Part-II and set off claimed. The amount so debited was also shown collectively in the invoices. These facts are also coming clearly out of the Order-in-Original. Therefore, the appellant cannot be said to have any intention to evade payment of duty. Accordingly extended period of five years is not attracted to the demand issued under Section 11A of the Central Excise Act, 1944. ROM with respect to time-barred nature of Section 11A demand is allowed and mistake rectified accordingly.
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2015 (4) TMI 1101
Disallowance of MODVAT credit - Availing the facility of MODVAT credit of duty paid on inputs, in terms of the provisions of 57A of the Central Excise Rules - Assessee had taken MODVAT credit on the strength of duty paying documents which was found to have been issued more than six months prior to the date on which credit was taken. In the entries made in the documents maintained under RG-23 A - Part I & II, even though in Part I the entry is made showing date of taking availment of MODVAT credit within the stipulated period of six months, but in Part II as the date was beyond six months,
Held that:- we are in full agreement with the principle laid down by the Gujarat High Court in the case of Baroda Rayon Corporation Limited Vs. Union of India [2011 (3) TMI 1551 - GUJARAT HIGH COURT] wherein also under similar circumstances, identical action has been quashed and MODVAT credit extended. We agree with the Gujarat High Court when it says that the right to avail all credit conferred under Rule 57A and Rule 57G only provides the procedure to be observed by the manufacturer. Therefore, when power is exercised under Rule 57G, the Central Government is not empowered to curtail any right conferred by the substantive provision of Rule 57A and, therefore, the Notification issued under Rule 57G prescribing the time limit for taking the credit as found by the High Court of Gujarat is found to be ultra vires, as it is beyond the power and is in conflict to the impugn provision of Rule 57A, these are based on the principle laid down by the Hon‟ble Supreme Court in the cases of Eicher Motors Limited Vs. Union of India [1999 (1) TMI 34 - SUPREME COURT OF INDIA] and Collector of Central Excise, Pune Vs. Dai Ichi Karkaria Limited [1999 (8) TMI 920 - SUPREME COURT OF INDIA].
Accordingly, the assessee was entitled to avail the MODVAT credit under Rule 57A, merely because of the time frame fixed in making the entries in Part II of RG-23A, and only because of some error in making the entry, denial of the benefit cannot be permitted. The act of the assessee in making such receipt of input in Part I of a single comprehensive RG-23 A action is evidence enough with regard to crystallization of right to MODVAT credit and merely because in second accounting entry of Part II, there is some inconsistency, the right accrued already to receive the credit cannot be taken away. Also the credit which had accrued to the assessee could not be denied in law by the CEGAT holding it to be inadmissible merely because of the error in making entry in Part II of RG-23A. - Appeal disposed of
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2015 (4) TMI 1087
Concessional rate of duty as per the Notification No. 141/86-C.E., dated 1-3-1986 - whether the appellant is not entitled to the concessional rate of duty prescribed in the above said notification as the base fabric used is falling under Chapter 60 and not under Chapter 52 as prescribed under the notification - Held that:- In the present case since the coated fabric manufactured by the appellant is not made of base fabric of Chapter 52, 54 or 55 therefore, is not classifiable either under Chapter sub-heading 5903.19 or 5903.29. In view of this undisputed fact the product in question is correctly classifiable under Chapter 5903.99 and therefore, correctly extended the benefit of Notification No. 141/86-C.E., dated 1-3-1986 under Sr. No. 10 of the table and Notification No. 63/87, dated 1-3-1987 under Sr. No. 5 of the table appended thereto.
Extended period of limitation invoked - Held that:- We observed that in the classification list the appellant admittedly mentioned “rate 6 per sq. mtr. plus the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid”. From this mention it is clear that department is under belief that base fabric used by the appellant is falling under Chapter 52 whereas the appellant used the base fabric which is falling under Chapter 60, therefore, this is a clear misdeclaration of the fact. As regards to submission of ld. Counsel that stock was verified physically by the departmental officer, we are of the view that though the stock of the goods was verified but from the stock verification officer cannot ascertain whether the base fabric used in the product is falling under Chapter 52 or Chapter 60. Therefore, we do not agree with the submission of the ld. Counsel on this count. We, therefore, are of the view that there is clear suppression of facts and misdeclaration on the part of the appellant therefore, extended period was rightly invoked.
during the period 1-3-1986 to 31-1-1989 the appellant has suppressed and misdeclared facts therefore, show cause notice for the said period can be issued up to five years. Only because show cause notice for the extended period was issued subsequently, nature of suppression and misdeclaration does not get extinguished. We, therefore, do not agree with this submission of the ld. Counsel. - Decided against assessee
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2015 (4) TMI 1086
Clandestine manufacture and clearance of medicaments - pre-deposit of penalty imposed upon them under Rule 26 of the Central Excise Rules, 2002 - stay demand - Held that:- All the four noticees are directly involved in the illegal manufacturing and clearance of the medicines. In the interest of the Revenue, some terms need to be imposed upon them especially when the main accused M/s. Gold Star Pharmaceuticals Pvt. Ltd. has defaulted in making the pre-deposit as ordered by this Bench and also considering that both M/s. Gold Star Pharmaceuticals Pvt. Ltd. and M/s. Suraj Medical Agencies are family concerns of Sh. Roshan Lal Kawatra, Sh. Kashmir Chand and Sh. Ashok Kumar. Further on legal issue also, it has been held that there is no bar in imposition of penalty on natural person if they are part of company/corporate body etc.
In view of the above, hold that penalties under Rule 26 have been rightly imposed upon the appellants M/s. Suraj Medical Agencies, Sh. Roshan Lal Kawatra, Sh. Kashmir Chand and Sh. Ashok Kumar. Thus the balance of convenience is in the favour of the Revenue for imposition of penalty on these persons. Accordingly I differ with the findings recorded by learned Member (Judicial).
And to avail the facility to hear the appeals, it is necessary that all these appellants M/s. Suraj Medical Agencies, Sh. Roshan Lal Kawatra, Sh. Kashmir Chand and Sh. Ashok Kumar are directed to deposit 50% of the penalty imposed upon them by the Commissioner under Rule 26 of the Central Excise Rules, 2002. Ordered accordingly consequently balance amounts of penalty shall remain waiver if penalties are deposited within six weeks and compliance reported within four weeks thereafter.
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2015 (4) TMI 1079
Penalty imposed - whether M/s. Satya Metal, Jammu has passed inadmissible Cenvat Credit or not is in dispute? - Held that:- When the issue of M/s. Satya Metal has passed inadmissible Cenvat Credit to the respondent is in dispute. Therefore, no penalty was required to be imposed by the Adjudicating Authority itself and show cause notice could have been kept in abeyance. But in over enthusiasm penalty has been imposed on the respondent by the Adjudicating Authority which has been considered by the Ld. Commissioner (A) in the impugned order and same has been set aside and now again in over enthusiasm that order has been challenged before me before attaining finality the issue of inadmissible credit passed by M/s. Satya Metal, Jammu. - Decided in favour of assessee
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2015 (4) TMI 1078
Eligibility of Notification No. 6/2002-CE dated 01.03.2002 - Manufacture of Steam Turbines and supplied for bio-mass based project without payment of duty by availing the exemption under said Notification - Held that:- boiler is the only device where the agricultural, industrial etc. waste is converted into thermal energy. Thereafter this thermal energy is used. Therefore the exemption cannot be extended to turbine which converts heat energy into rotational energy (kinetic energy). Therefore the appellants plea that the turbine is eligible for nil rate of duty as per Notification No. 6/2000, read with Sl. No. 16 of list of the said notification or under Notification 6/2002, dated 1-3-2002 read with Sl. No. 16 of List 9 is not accepted. - Decided against the appellant
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2015 (4) TMI 1061
Manufacturing of Gutkha and pan masala - The Department invoking the first proviso to Rule 8 of the PMPM Rules has treated each machine as 2 packing machines and has demanded duty on this basis. - Held that:- 1st proviso to Rule 8 of the PMPM Rules cannot be interprested so as to result in levy of duty on the quantity which is more than the deemed production per machine per month as specified in Rule 5. When for the purpose of rule 5, in case of a packing machine manufacturing Gutkha pouches of RSP of ₹ 1, the RSP of ₹ 0.50 piece is not a new RSP, for the purpose of First Proviso to Rule 8, it cannot be treated as new RSP. - Decided in favour of assessee.
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2015 (4) TMI 1046
Availing Cenvat credit without actually receiving the goods - onus to prove - modus operandi - diversion of the duty paid brass circles/strips in the open market - Held that:- the only case has been booked against the respondent on the premise that M/s. AMC has diverted the goods as they have altered the description of goods in the invoices issued by them showing the goods supplied by manufacturer/supplier showing the description of goods as brass sheets. But Revenue has failed to produce corroborative evidence to show that respondent has not received the goods against the invoices issued by M/s. AMC. - Decided against the revenue.
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2015 (4) TMI 1036
Denial of CENVAT Credit - Issue of invoices without actual receipt of goods - Held that:- as the respondent has made all the payments through account payee cheque to the first stage dealer who has accepted that they have delivered the goods along with invoices. Moreover, no statement of transporter have been recorded to ascertain the fact that respondent has not received the goods. In these circumstances, I do not find any infirmity with the impugned order on merits. Further, I find that in this case show cause notice has been issued in September 2011 whereas transaction involved the period August 2006 to September 2006. Therefore, I hold that show cause notice is barred by limitation also. In these circumstances, impugned order is upheld. - Decided against Revenue.
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2015 (4) TMI 1035
Benefit of CENVAT Credit - exemption vide Notification No. 3/2005 dated 24.02.2005 - Held that:- What 57D provides is that where MODVAT input is used in the manufacture of dutiable final product and waste, refuse or by-product arise in the process, then, even if the MODVAT inputs are contained in the waste, refuse or by-product and whether or not Excise duty is payable on such waste, refuse or by-product, the manufacturer would not be denied full credit of duty paid on inputs used in the manufacture of dutiable final products. Rule 57CC applies only if the MODVAT inputs are used in manufacture of both dutiable final products and exempted final products and the manufacturer has not maintained separate accounts so as to ascertain the quantum of inputs used in the manufacture of the final products. Therefore the floor sweepings/waste and scrap/hydrogen arising in the manufacture of biscuits/iron-products/oxygen, respectively will be governed by Rule 57CC if they are exempted final products and would be governed by Rule 57D if they are merely waste, refuse or by-product arising in the manufacture of dutiable final products and accordingly the Hon ble Bombay High Court allowed the writ petition of Rallis India Limited (2006 (12) TMI 162 - CESTAT, MUMBAI) holding that no duty whatsoever is payable in the case of by-products, waste and scrap. - in the present case also sawdust generated is waste and not a final product of the appellant. Accordingly I hold that no duty is payable under the provisions of Rule 6(3)(b) of the CENVAT Credit Rules, 2004 or in the earlier provisions of rule 57CC of the Central Excise Rules, 1944. Accordingly, the appeal is allowed. The appellant will be entitled to consequential benefit if any. - Decided in favour of assessee.
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2015 (4) TMI 1034
Wrongful availment of CENVAT Credit - Credit availed on full goods mentioned in invoice however, received less goods - Held that:- Goods involved in the present case are lubricating base oil. Ld. Counsel for the appellant has produced copy of supplement to the manual of departmental instruction on excisable manufacture product. In the said manual different limit has been prescribed for different goods and different method of transfer etc. In the case of lubricating base oil the permissible limit is 0.1 %. We also note that Larger Bench of this Tribunal in the case of Bhuwalka Steel Industries Ltd(2009 (11) TMI 177 - CESTAT, CHENNAI [LB]) has gone into details of various factors to be considered while permitting various losses on their receipt of the goods for purpose of availment of Cenvat credit under Rule 3(1) of Cenvat Credit Rules. We also note that the Commissioner in the impugned order has taken note of such factors and discussed in detail the relevance or irrelevance of each of the five factors enumerated in the larger bench decision. In nutshell, the conclusion is that Cenvat credit availed and utilized on short receipt of base oil in excess of 0.1% is not permissible. We do not find any thing wrong in the said findings. - However, penalty is set aside - Decided partly in favour of assessee.
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2015 (4) TMI 1033
Denial of refund claim - Service tax amount paid on the commission to the agents - refund of unutilised credit of duty paid on input and input services - adjudicating authority rejected the refund claim on the ground that the services were not used in the manufacture of the final products which were exported - Held that:- issue is no more res integra. Honourable High Court of Gujarat in the case of Commissioner of Central Excise, Ahmedabad - II v. CEDILE Healthcare Ltd - [2013 (1) TMI 304 - GUJARAT HIGH COURT] has settled the issue - though the business activities mentioned in the definition are not exhaustive, the service rendered by the commission agents not being analogous to the activities mentioned in the definition, would not fall within the ambit of the expression activities relating to business. Consequently, CENVAT credit would not be admissible in respect of the commission paid to foreign agents - impugned order is not sustainable and is liable to be set aside - Decided in favour of Revenue.
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2015 (4) TMI 1032
Denial of CENVAT Credit - return goods - defective goods or waste / scrap - Held that:- Allegation against the appellant is that they have not received the rejected goods and received only waste and scrap /ash on which they have taken Cenvat credit which is not permissible and said fact has been examined by the learned Commissioner (Appeals) - Commissioner (Appeals) has attained finality wherein it has been held that goods returned by the appellant are not waste and scrap/ash and they are rejected goods. Therefore, the show cause notice is not sustainable in the eyes of law. Whatever observations were made by the Commissioner after that are not part of the show cause notice. Therefore same is not required to be considered by me. In these circumstances, I hold that appellant has taken Cenvat credit correctly. Consequently the impugned order is set aside - Decided in favour of assessee.
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2015 (4) TMI 1031
Duty demand - Valuation - appellant were issuing debit notes to their distributors/consignment agents for the said 2% margin of replacement - Revenue contented that since 2% margin was not claimed by the appellant in price declaration and since the debit note was raised towards the said margin the deduction is not admissible - Held that:- Appellant in the marketing policy explicitly declared to their wholesale buyer in all over India regarding the margin of 2% towards damage and replacement. It is also found that this 2% margin was allowed to each and every wholesale buyer. Therefore contention of the Revenue that this margin is not uniform is apparently not correct. As regard the variation of the price from one state to another state, we find that the retail sale price remain same in all over India, however the wholesale price/assessable value varied from one state to another state only for the reason that in different state Sales Tax and Octroi rates are different. Therefore the rate of margin indeed the same and uniform, the variation is only on account of Sales Tax/Octroi. As regard the debit notes, we find that this practice is not followed in each and every case as against the total sales. Only few debit notes were issued for an amount of ₹ 2,41,337/- therefore in our view merely because the debit note of ₹ 1,46,706/- was issued, entire sale cannot be weighed in the same manner.
2% margin which is margin of wholesale buyer towards sale of their goods to the retailer cannot from the part of whole sale price and accordingly the same cannot be included in the assessable value. Even in terms of Rule 6(a) of erstwhile Central Excise Valuation Rules, 1975 if the goods are sold in retail and wholesale price is not known reasonable margin has to be deducted to arrive at the wholesale price for charging of excise duty. In the present case the wholesale price is clearly known i.e. the price after deduction of Sales Tax, Octroi, 7.5% margin, 2% margin and excise duty from the retail sale price, therefore the wholesale price clearly known. Hence, excise duty is chargeable on the wholesale price and not on retail price. - Partial amount is recoverable - Decided partly in favour of assessee.
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