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Central Excise - Case Laws
Showing 61 to 80 of 277 Records
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2016 (10) TMI 948
Denial of CENVAT credit - purchase of inputs - MS billets - MS ingots - whether the denial of CENVAT credit on the ground that the credit availed without receiving the inputs, justified? - Held that: - The show cause notice have nowhere disclosed the source of several invoices (about 620 in number) purported to have been issued by Rathi Ispat Ltd, for sale of materials to the appellant on the basis of which the transporter-Pramod Sachdeva was confronted. Further, the said invoices are not part of the relied upon documents in the show cause notice. - As such, the appellant also did not have any opportunity to comment on those invoices, as admittedly the copy of such invoices was never made available to the appellants.
We further find that the Ld. Commissioner have failed to exercise the jurisdiction vested on him by not ensuring the presence of the witnesses of the Revenue, whose statements have been relied upon, in raising the demand against the appellant. The Ld. Commissioner have also failed to examine the witnesses of the Revenue in the course of adjudication proceedings and to further offer the witnesses for cross-examination, which is in clear violation of provisions of Section 9D of the Central Excise Act, thus, vitiating the impugned order.
The allegations of family concern on the appellant (company) viz-a-viz Rathi Ispat Ltd., is vague and no averment supporting the same have been made either in the SCN nor any findings recorded in the Order-in-Original.
Under the facts and circumstances, there being no suppression of facts and/or contumacy conduct on the part of the appellant, the extended of limitation is not invokable, on this score also, the tax and penalty are fit to be set aside.
The appellant entitled to take back the Cenvat Credit debited in their register by way of pre deposit during the pendency of this appeal with interest, as per Rules - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 947
Clandestine removal of goods - 96 MT of MS bars - clearance from factory not recorded in daily stock account register - reliance on statement - Held that: - the decision in the case of Central Excise, Mumbai Vs. M/s. Kalvert Foods India Pvt. Ltd. [2011 (8) TMI 24 - SUPREME COURT OF INDIA] relied upon where it was held that the statement recorded by the Central Excise Officer can be relied upon. The statement of Shri Todarmal G. Mundada, partner of the appellants, admitting the clandestine clearance of 96 MT have never been retracted.
Cross examination of witness cannot be claimed as a right and would depend on case to case basis. Nothing new will emerge in the cross examination when all facts are accepted and are on record.
It is well settled position in law that what has been admitted need not be proved. In fact, the appellants have immediately deposited full duty on being pointed out that the invoices for impugned clearances were not in their record. Under the facts and circumstances for the case, there is no doubt that the appellants had cleared these consignments in a clandestine manner without the cover of invoices and without paying the central excise duty - appeal dismissed - decided against appellant.
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2016 (10) TMI 910
Denial of CENVAT credit - imposition of penalties - correctness of documents covering the import and local procurement of various capital goods for availing credits - manufacture of Iron Ore Concentrates - Held that: - there is no dispute about the receipt and utilization of the capital goods at the appellant s plant. As the documents contain full details of the product, duty paid on the same and the full address of the appellant/supplies issuing the invoice, the credit cannot be denied to the appellants - reliance placed on the decision of case LARSEN & TOUBRE LIMITED Versus COLLECTOR OF C. EXCISE, BHUBANESWAR [1994 (4) TMI 146 - CEGAT, CALCUTTA] where the case was decided in favor of appellant.
The credit of ₹ 1,52,422/- rightly denied - invoices consigned to Essar Steel India Ltd., Chitrakonda - There is no indication that they have a registered manufacturing unit of Chitrakonda.
Time bar - Held that: - the appellants have filed monthly ER-1 statements indicating the credits taken along with copies of the duty paying documents. As the photocopies of the duty paying documents were filed along with ER-1 Return, full details were in the knowledge of the department regarding various credits availed by the appellants. As such, we find that invoking extended period of demand in the present case is not legally sustainable.
The impugned order not justifiable on merits as well as substantially on time bar also - appeal allowed.
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2016 (10) TMI 909
Constitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - Prohibition on assessee from utilising cenvat credit for payment of excise duty for default in payment of duty - discharge of part duty by making use of PLA - a part of the duty payable for the month of August 2008 was not paid by the appellant within the time limit allowed but was paid alongwith interest after delay in the month of November 2008 - whether the duty amount to the tune of about ₹ 12 lakhs already paid by the appellant by making use of Cenvat Credit needs to be demanded to be paid in cash/PLA? - Held that: - reliance placed on the decision of the case Indsur Global Ltd. vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] where it was held that Condition contained in sub-rule (3A) of rule 8 for payment of duty without utilizing the cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion "without utilizing the cenvat credit" of sub-rule (3A) of rule 8 of the Central Excise Rules, 2002, shall be rendered invalid.
I find that there is no justification to proceed with the demand made under Rule 8 (3A) by the authorities below in as much as the Rule itself has been stuck down as unconstitutional - appeal allowed - facility of using Cenvat credit for making payment of excise duty cannot be denied - decided in favor of appellant.
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2016 (10) TMI 908
Reversal of CENVAT credit of CVD - manufacture of Insulated Wires and Cables falling under Chapter 8544 of the Central Excise Tariff Act - credit of the CVD paid, availed on imported capital goods - whether the denial of CENVAT credit on the ground that capital goods was found defective and were re-exported by the appellant under bond without payment of duty justified? - qualification as capital goods as defined in Rule 2 (a) of the Cenvat Credit Rules, 2004 - Held that: - It is not in dispute that the appellants have re-exported the defective capital goods without putting them to use. They have cleaned these goods "as such" under bond and export the goods without payment of duty. Para 3.4 of Chapter 5 of CBEC Central Excise Manual reads as follows - "3.4 There is no bar for a manufacturer to remove the inputs or capital goods "as such" for export under bond". - Therefore, the respondent cannot be faulted for removing the goods without payment of duty for export.
Reliance placed on the decision of case of Glass and Ceramic Decorators vs. CCE, Mumbai - I [2014 (9) TMI 864 - CESTAT MUMBAI] where it was held that In respect of the goods on which credit has been taken, Circular issued by Board in 1996 as well as in 2000, clearly says that the manufacturer assessee is entitled to clear the inputs or capital goods for export (on which credit has been taken) under bond without payment of duty.
The CBEC has also in the clarified Circular dated 29/8/2000 that there is no bar for manufacturer to export inputs and capital goods under bond. In any case if the capital goods would have been cleared for export on payment of duty the same would have been allowed as rebate to the respondent as per the provisions of Rule 19 of the Central Excise Rules, 2002.
Demand of reversal of the Cenvat credit not justified - appeal dismissed - decided against Revenue.
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2016 (10) TMI 907
Benefit of exemption under N/N. 6/2002 CE dated 01.03.2002 as amended by Notfn No. 47/2002-CE dated 06.09.2002 - contract of construction of pipeline - whether the department's view that in the assessee's contract there is no element of 'water treatment plant' hence they are not eligible for exemption justified? - Held that: - the decision in the case of CCE., C. & ST. (A-III), HYDERABAD Versus IVRCL INFRASTRUCTURES & PROJECTS LTD. [2008 (12) TMI 198 - CESTAT, BANGALORE] relied upon where it was held that pipes needed for delivery of water from its source to the plant and from there to the storage facilities have been exempted subject to the requirement of obtaining a certificate from the Collector, District Magistrate, Deputy Commissioner of the District in which the plant is located. We find that the Notification merely talks about the storage facilities and there is no restriction that the water should be delivered only to the first storage point – benefit of exemption available.
Benefit under the exemption notification available - appeal dismissed - decided against Revenue.
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2016 (10) TMI 906
Valuation - Superfine Spray Plaster - Retail Sale Price in terms of Section 4A or transaction value in terms of Section 4 of the CEA, 1944 - supply of Superfine Spray Plaster in bulk from NCC-Maytas for their consumption in construction - Held that: - decision in the case of CCE, Bangalore Vs. Mysore Cements Ltd. [2010 (8) TMI 246 - KARNATAKA HIGH COURT] relied upon where it was held that construction activity has been considered as a service industry by the Finance Ministry - general construction work for building, general construction work for civil engineering installation and assembly work building, completion and finishing work and assessee is treated as a service industry.
The clearances of surface coating material supplied by the appellant in 25 kg PP bags to NCC-Maytas will fall under the ambit of exemption from affixation of MRP as envisaged in Rule 34/amended Rule 2A of SWM (PC) Rules - valuation to be done u/s 4 as transaction value - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 905
CENVAT credit - items falling under chapter 76, 83,68, 69 of CETA - capital goods in terms of Sub-Clauses of Rule 2(a)(A) of CCR, 2004 or inputs - components/spares/accessories of capital goods - packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat loss - Held that: - the definition of inputs in Rule 2(k) of CCR means and includes all goods used in the factory by the manufacturer of the final product. It also includes any goods including accessories, cleared with the final product, the value of which is included in such final product - the definition of 'inputs' during the relevant period under explanation 2 in Rule 2(k) includes goods used in manufacture of capital goods which are further used in the factory of the manufacturer. Further, clause (i) of Rule 2(k) provides 'input' means all goods used in or in relation to manufacture of final products which directly or indirectly and whether contained in final product or not and includes items like lubricating oils, grease, cutting oils etc., in relation to manufacture of final product or for any other purpose within factory of production.
I find that most of the items in question have been indisputably utilized in the factory of production of excisable goods and without the use of which the appellant could not have manufactured excisable goods - CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 904
Clandestine removal of goods - manufacture of Pan Masala and Gutkha - Held that: - the contentions of Revenue in the grounds of appeal are more or less repetition of show cause notice. We find that the show cause notice and earlier Order-in-Original dated 27.05.2005, have merged into the final order dated 12.08.2011 passed by this Tribunal, as per the doctrine of merger. The issue for our consideration is present appeals before us is whether the impugned order in original is sustainable with reference to the directions that were given by this Tribunal in its said final order dated 12.08.2011. The grounds of appeal by Revenue & M/s Durga Trading Company are stated is foregoing paras. In none of the grounds, either Revenue or M/s Durga Trading Company would establish that any of the direction given by this Tribunal while remanding the matter to Original Authority have been violated while passing the impugned Order-in-Original. We therefore, hold that present Order-in-Original is sustainable in respect of all the above stated appeals. Therefore, all the above stated appeals are dismissed.
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2016 (10) TMI 873
Condonation of delay - appeal against the case M/s Nirmit Tele Infra Pvt Ltd Versus Commissioner of Central Excise And Service Tax, Hyderabad [2016 (10) TMI 387 - ANDHRA PRADESH HIGH COURT] - SLP dismissed.
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2016 (10) TMI 872
Validity of order-in-original confirming the demand based on SCN - show cause notice issued on presumption and surmises - M.S. Ingot - unrealistic electricity consumption, high cost of production vis-a-vis income from sale, unrealistically low amount of expenditure towards salary of employees and though manufacturing activity incurs losses - principles of natural justice - Held that: - the variation is from 555 units to 1800 kWH/Per Ton. This is mainly because of the nature of the machinery utilized by the noticee. Looking to the facts of the present case, the electricity consumption pattern as has been given in Annexure- RUD-7, as stated in paragraph 4 of the show cause notice, which is at page no. 63 of this memo of writ petition which reveals that this petitioner has consumed electricity absolutely in consonance with the report given by Joint Plant Committee, constituted by the Ministry of Steel, Government of India and for few months it is even less than that. Thus, there are varieties of report available in the markets, one could not have been chosen by the respondents, arbitrarily, without carrying out the experiment of consumption of electricity for one ton of manufacturing at the noticee's manufacturing unit. This type of experiment is a must by the department, whenever respondents are canvassing the ground of electricity consumption pattern vis-a-vis clandestine removal of finished products. Otherwise, without such experiment, if any one of the aforesaid report relied upon, then it is arbitrariness on the part of the respondents and whenever there is any arbitrariness, there is always violation of Article 14 of the Constitution of India because for few of the noticees such type of reports are not relied upon whereas for rest of the assessee, as per the choice of the respondents, such type of reports will be relied upon and in fact, this has happened in this case - Thus, without experiment is being carried out at the premises of the noticees, use of any of the committee's report for electricity consumption pattern always leads to arbitrariness on the part of the respondent-department. Whenever arbitrariness is present, equality is absent. Equalities and arbitrariness are strong enemies of each other. When equality is present, arbitrariness is absent.
This Court is not much going into detail of further arbitrariness in the Order-in-Original about the lower remuneration to the employees of the petitioner no. 1 as well as the manufacturing unit is running in loss and the profit is made from non-core activities etc. There appears to be very high sounding reasons, but, if they are viewed with zoom lens camera, it appears that nothing is proved by the respondents. “Low remuneration” is a relative word and therefore, statement of the employees of the noticee, ought to have been reduced to writing by the respondents- department. If the employees are stating that they are getting more remuneration than what is shown in the books of account by the noticee, then these statements ought to have been reduced in writing and they must be referred in the show cause notice. Copies of the gist of the statements should be given to the noticee and those employees must be kept ready for cross examination. This type of procedure ought to have been followed by the respondents- department. Instead of doing this exercise, allegation has been levelled that there is low remuneration paid by the noticee, is not sufficient at all.
The Order-in-Original is based upon mere presumptions and possibilities, and, nothing has been proved at all by the respondents, especially unaccounted manufacturing of M.S. Ingots and the clandestine removal thereof - matter remanded for adjudication of the SCN - petition allowed.
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2016 (10) TMI 871
Clandestine removal - SSI unit - Notification No. 8/98 dt. 02.06.1998 and 8/99 dt. 28.02. 1999 - Seizure of the goods and commercial invoices, register containing details of sales and a chart containing details of sales - demand of duty on the value excess of the turnover eligible for exemption - Held that: - duty demand was confirmed by the authorities below based on the commercial invoice which are alleged to have been corroborated either with the transporter LR, follow up reports of the alleged consignee or details of payment - except commercial invoices there is no other evidence of clearances of goods, or no confirmation of receipt of goods by the alleged consignee of such goods and no payment receipt against such invoices.
Deduction was claimed on the ground that though Lorry receipt numbers was mentioned against such commercial invoices but no LR was found either from the Appellant premises or from the transporter or from the consignee - Held that: - the statement of two of the transporters were recorded and relied upon but only two dispatch register were recovered which has not been corroborated with the Lorry receipt or commercial invoice - when except confirmation from alleged consignee, no single statement is on record and no cross examination was allowed to check veracity of confirmation; the demand cannot be made on such value.
Even though the demand is mainly based upon the commercial invoices, but during investigation any excess production than recorded in books of the Appellant concern was not found - Appeal is partly allowed.
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2016 (10) TMI 870
Captive consumption - Adjustment of short payment of duty with the excess payment of duty during the same year - self adjustment in the absence of provisional assessment - the correct value for excise duty purpose has been arrived at only on completion of the financial year and based on final accounts and following the CAS-4. When the value is arrived at based on annual data it is apparent that whatever value adopted by the appellant for captive clearances during the year are not based on final price as the same is not known at the time of clearance. - hot-rolled products of iron and steel.
Held that:- the appellant was not allowed to have provisional assessment and the department now proceeds to demand of duty selectively for periods within the same financial year wherever the value is less than the Rule 8 value and refused adjustment within the same financial year when the value is determined higher than the Rule 8 value. It is apparent that the duty liability as already discharged on the basis of value which is not final. The net excess or shortage will have to be considered. In the present case, admittedly, no refund has been claimed or under consideration for the impugned period even though overall payment by the appellant for the whole year is much higher than the actual liability.
Appeal allowed - decided in favor of appellant.
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2016 (10) TMI 869
Eligibility for exemption under N/N. 6/2006-CE dated 1.3.2006 (Sl.No.19) - manufacture of bus bodies - buses cleared to M/s. Delhi Metro Railway Corporation (DMRC) - Held that: - The wordings of Entry No.90 in the Notification is specific and the appellant’s claim that bus is an equipment cannot be accepted even by plain reading. The Original Authority also relied on the Board’s letter dated 14.09.2004 addressed to the DMRC enclosing two lists of items, for which exemption was sought by the DMRC. The Original Authority referred to the proceedings of the Empowered Committed on Delhi MRTS Project. The Original Authority, after examining in detail, the background of DMRC’s claim with the Department of Revenue recorded that bus cannot be even by implication considered as “equipment” It was also recorded that if the intention is to include the bus for exemption, the same could have found place in the original list of items submitted by the DMRC for consideration before the issue of the exemption notification - buses for passengers cannot be considered as an “equipment” within the scope of Entry No.90 of the above said notification. The appellant’s claim for such exemption is not tenable.
Imposition of penalty - Held that: - the penalties imposed on the main appellant as well as the Director of the DMRC cannot be sustained. We find no justification for imposing equal amount of penalty on the main appellant in terms of Section 11 AC. The main appellant produced a certificate given by DMRC and claimed the exemption. DMRC gave such certificate based on their understanding of the claim for exemption. No fraudulent intent could be brought out in these transactions. DMRC is a Government Promoted Utility Organization and considering the facts and circumstances of the case, we find no justification in the imposition of equal penalty on the appellant and personal penalty on the Director of DMRC. Accordingly, we set aside the penalties imposed on them.
Appeal disposed off - decided partly in favor of appellant.
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2016 (10) TMI 868
Clandestine removal of goods - clubbing of clearances for SSI exemption - moulds for footwear - Held that: - the turnovers for the year 2004-05 and 2005-06, as recorded by the Original Authority, were mainly based on the assumptions and presumptions and theoretical calculation of average production/value of clearances. Accordingly, without giving weightage to the presumptive calculation, the aggregate value of clearances of these two respondents were found to be below SSI limit of ₹ 1 crore even taken together. Regarding recovery of cash, we note that there is nothing on record to link the said amount as sale proceeds of clandestinely removed excisable goods. Due explanation has been filed by the respondent to account for said cash claimed to be the sale proceeds of the agricultural land. In the absence of any evidence and also in view of the findings against the Revenue regarding clandestine manufacture and clearance, we hold that the seizure and confiscation of the cash and also of the finished goods are not sustainable - appeal dismissed - decided against Revenue.
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2016 (10) TMI 867
Suppression of production - clandestine removal of goods - window sections, angles, flats, CTD bars, etc. - unusual deviation of electricity consumption figures for different months - Held that: - the products being manufactured by the respondent are shown as window sections, angles, flats, CTD bars, etc. There is no details about the proportion of manufacture of these items or the nature of standard machinery used in the manufacture. It is also not known what will be the normal consumption per machine for a given period of time when in continuous normal operation. We have only electricity consumption for few months in 2008-2009 and certain calculation based on purported average electricity used for production of 1 M.T. of final product. We are also not very clear as to how 91 units are considered as standard for calculation as nothing is recorded regarding the nature of machinery and the consumption capacity of said machinery. We find that the calculation made is completely presumptive.
There is no evidence relating to procurement of extra unaccounted raw materials/inputs, deployment of additional labour, unaccounted transportation/sale, identity of any of the buyers of such goods, etc. Even where certain verifications were made regarding trading activities, no substantial evidence could be attributed to allege that the tradings undertaken by the respondent firm are all bogus. We have already noticed in the absence of any tangible evidence, allegation of clandestine manufacture/clearance of excisable goods cannot be sustained. Even if the transactions on trading were to be found as bogus, the same by itself will not support the confirmation of duty demand as linkage to the clandestine manufacture and the income on bogus trading should be brought out by the evidence - appeal dismissed - decided against Revenue.
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2016 (10) TMI 866
Refund claim - whether the appellant is eligible to refund for the period prior to 1/6/2000 when appellant was not registered? - That Notification No. 33/99-CE is conditional and contained mandatory procedure to be followed before a refund is made admissible to a manufacturer - Held that: - It is also observed that one time eligibility can not give license to the appellant to get refund for all the periods before & after 16/11/2006 because refund for each month under Notification No. 33/99-CE is an independent claim required to be filed under the exemption notification. Whether each of such a refund claim filed by the appellant is admissible has to be seen only at the time of deciding that refund claim - appeal disposed off - decided against assessee.
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2016 (10) TMI 865
Captive consumption - benefit of exemption notification no. 67/95 - further processing of goods after packing into unit container - skimmed milk powder, branded butter and branded ghee - interpretation of the words “intended for captive use” of “intended for sale” - the demands raised by recording a finding that the goods were packed in unit containers and were branded and were intended for sale, hence having consumed captively duty liability arises. - Held that: - The said goods were packed in unit containers is an accepted fact but at the same time due to exigency i.e. shortage of the said goods, respondent consumed the goods which were manufactured and put up in 20 kgs. Corrugated boxes for captive consumption. - though the goods were intended to be cleared outside the factory, due to shortage of milk and milk products, respondent consumed the same within the factory premises. - there is no dispute that the goods were consumed within the factory premises and as such it cannot be said that there was no exemption available on the said products for captive consumption as notification no. 67/95 does not carve out any exception.
It is seen that the inputs and final products in this case are both specified products in the Notification No. 8/98 dated 02/06/98 and in terms of para 4(c) of the said Notification clearances of specified goods captively as inputs are deemed to be exempt from the whole of excise duty. Therefore the clearances of Skimmed Milk Powder and Branded Butter though put up in unit container but used for captive consumption as inputs for regeneration of Milk are not dutiable.
Appeal disposed off - decided against Revenue.
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2016 (10) TMI 864
Clandestine removal of goods - discrepancies found in the figures of raw materials as reflected in the balance sheet and in the excise returns - Held that: - the difference in the balance sheet figures and the statutory records cannot lead to the inevitable conclusion of clandestine activities, Similarly, in the absence of evidence to show that the income reflected in Balance sheet or otherwise is on account of manufacturing activities, the same cannot be held to be sale proceeds of clandestinely removed goods. The order of the appellate authority is a detailed order passed based on the merits of the case and read with the law laid down by the Tribunal in identical matters.
Appeal disposed off - decided against Revenue.
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2016 (10) TMI 829
Levy of education cess and secondary and higher education cess - powers of the central government - business of exploration, development and production of crude oil and natural gas - production sharing contract - production of crude oil - Scope of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007, being the cess as per Section 15(1) of the Oil Industries (Development) Act, 1974, is said to be not levied and collected by the Ministry of Finance (Department of Revenue)? - Held that: - Pertinent to notice that under the Act of 1974, as per Section 16, the duty of excise levied shall be first credited to the consolidated fund of India and the Central Government may, if Parliament by appropriation made by law in this behalf, so provides, pay to the Board from time to time, from out of such proceeds, after deducting expenses of commercial and such sums of money as it may think fit for being utilised exclusively for the purpose of this Act. Under Section 16, a broad discretion is available with the Central Government for necessary allocation of excise. On the other hand, under the Sugar Cess Act, the entire duty shall mandatorily go to consolidated fund required to be maintained as per the Sugar Development Fund Act, 1982. Learned Tribunal without examining this aspect of the matter decided the appeal by applying the law laid down in the case of Commissioner v. Sahakari Khand Udyog Mandi Ltd., that is apparently erroneous.
As per Section 93 and 138 of the Acts aforesaid, the cess is a duty of excise which is to be levied and collected by the Central Government in the Ministry of Finance under provisions of the Central Excise Act, 1944 or under any other law for time being in force. The scope of the provisions referred above is quite wide and that covers levy and collection of all excisable goods under provisions of the Central Excise Act, 1944 or even under any other law for time being in force. In light of this provision also we do not find any wrong in applying the cess in question upon the excise duty referred under Section 15(1) of the Act of 1974.
No reason found to reason to escape the respondent from application of education/secondary and higher education cess under the Act of 2004 and the Act of 2007 respectively - Decided in favor of revenue.
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