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Central Excise - Case Laws
Showing 81 to 100 of 277 Records
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2016 (10) TMI 828
MRP based valuation or Transaction value - supply of Cement bulk customers like manufacturers, builders, contractors, educational institutions, societies and hospitals etc. - qualification of buyer as industrial/ institution consumers - Held that: - We find that the original authority found that hospitals, co-operative societies, temples cannot be considered under the category of institutional or industrial consumers. We find the reasoning given by the original authority that schools, educational institutions and hospitals are not service industry in terms of Rule 2A of the Packaged Commodities Rules, 1977 is not tenable. The institutional consumer means those consumers who buy cement directly from the manufacturers for service industry like transportation including airway, railway, hotel or any other similar service industry. We find that educational institutions and hospitals are directly buying cement from the assessee-appellant and rightly eligible for concessional rate of duty as service institution - admittedly, the sale being direct without any intermediary involved, the criteria for retail sale has not been fulfilled. As such we find wherever such direct sale is effected the application of Packaged Commodities Rules, 1977 will not be governed by Rule 3 for enforcement - the denial of the concession in terms of the abovesaid notification for the assessee-appellant on these grounds is not justifiable.
The reliance placed by the original authority on the decision of the Tribunal in Grasim Industries Ltd. vs. CCE, Trichy [2008 (10) TMI 462 - CESTAT, CHENNAI] is not proper as the department has filed civil appeal before the Hon’ble Supreme Court against the said order.
Appeal filed by assessee-appellant allowed - appeal filed by Revenue rejected.
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2016 (10) TMI 827
Modvat credit - common input used in manufacture of excisable as well as exempted product - Rule 57-AD of the Central Excise Rules, 1944 - amendment of rule by Finance Act of 2010 - the substantial questions of law, on which the appeal was admitted, do not survive any longer - appeal dismissed.
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2016 (10) TMI 826
Imposition of duty, interest and penalty - Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 - reliance placed on the decision of M/s. Shree Bhagwati Steel Rolling Mills Versus Commissioner of Central Excise & Another [2015 (11) TMI 1172 - SUPREME COURT] where it was held that the provisions of Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 were struck down. - The claim of the Central Excise Authorities for interest and penalty are on the basis of such rules. Consequent to such rules being struck down, the claim on account of interest and penalty are not sustainable - petition disposed off.
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2016 (10) TMI 825
Discrepancies in stock - reversal of CENVAT credit - Substantial discrepancies in the valuation of inputs as per the stock register and the stock physically found - mere manufacturing loss or not - appeal against the judgement passed in the case M/s Shah Alloys Ltd. Versus The Commissioner C&CE, Ahmedabad III [2014 (11) TMI 116 - CESTAT AHMEDABAD] - Held that: - the assessee was consuming as many as 42 different inputs. The discrepancies in the stock was found only in five of them. As a whole, the shortfall is only 0.42% of the total consumption of inputs by the assessee. It was in this background that the Tribunal opined that such discrepancy can be put down as manufacturing loss - no reversal of CENVAT credit required - appeal dismissed - decided against Revenue.
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2016 (10) TMI 824
CENVAT credit - structural steel items, namely, Plates used in fabrication/laying foundation of supporting structures of the plant and machineries - Held that: - the period involved for the demand is from August, 2009 to June, 2010. I find that that with effect from 07.07.2009, Explanation 2 to Rule 2(k) defining input excludes cement, angles, channels, CTD bars, TMT bars and other items used for construction of factory shed or laying of foundation or making of structures for support of capital goods from the definition of input. Here, there is no evidence on record to prove that the item steel plates have been used for construction of factory sheds or for laying foundation for support of capital goods, etc. Actually, the appellant has claimed that the subject goods, namely, MS plates have been used for repair and maintenance of chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. It is also evident from the facts that there is no evidence to disclaim or counter the appellant s claim that these goods were used for repair and maintenance of above machinery, namely, chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. Therefore, subject item is certainly covered within the Explanation 2 of definition of input given in Rule 2(k) of Cenvat Credit Rules, 2004.
Reliance placed on the decision of case Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] and Monnet Ispat & Energy Ltd. Vs. CCE, Raipur [2016 (1) TMI 917 - CESTAT NEW DELHI].
Subject item entitled to CENVAT credit - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 823
Clandestine removal of goods - MS ingots - MS runners and riser - Held that: - the appellant had taken the credit on the basis of invoices and in respect of the goods received in their factory. To confirm the demand on the basis of difference in figures in balance sheet and RG 1, without their being any further evidence either in the shape of statements of any of the employees of the appellant or in the shape of identifying the buyers, the transporters etc., the finding of clandestine activities cannot be upheld. It is well established principle of law that onus to discharge the burden in case of clandestine activities is upon the Revenue. In the present case, I find that sole basis of Revenue to raise the demand is a difference in the figures, as detected by the Audit, without their being any difference in the opening and closing balance. As such, I find no justification for upholding the impugned orders - appeal allowed - decided against Revenue.
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2016 (10) TMI 822
CENVAT credit - fake invoices - suppliers found to be non-existing - Extended period of limitation - suppression of facts - Held that: - reliance placed on the decision of M/s Vrindavan Dyeing Mills (P) Ltd, Shri Shyam Sunder Dhanawat Versus Commissioners of Central Excise, Customs and Service Tax-Surat-I [2015 (10) TMI 2199 - CESTAT AHMEDABAD] where it was held that Goods were supplied by various merchant manufacturers for processing, on job charge basis and the goods were supplied to them accompanied with Central Excise invoice. They processed the goods and which were taken by the merchant manufacturers. He also stated that they received job charges for the processing of the grey fabrics. It is categorically stated that they received job charges by cheque from the various merchant manufacturers. It is seen that in 2005, the Central Excise Officers found that the suppliers of the Grey fabrics were not in existence. We find that the Dy Commissioner, C&CE Div IV, Surat by his letter dtd 4.12.2008 in response to query under RTI application had forwarded to copy of the CE Registration Certificate of the suppliers. Thus, it is clearly evident that the suppliers were in existence during the material period.
Following the decision the extended period of limitation cannot be invoked - appeal allowed - decided against Revenue.
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2016 (10) TMI 821
Clandestine removal of goods - non inclusion of packing charges in the value - non-payment of duty in respect of goods cleared by declaring value as 'NIL' - wrong availment of CENVAT Credit to the tune of in respect of goods meant for 'installation & commissioning - removal of capital goods in contravention of CENVAT Credit Rules, 2004 - clearing certain goods under a document "to whom so ever it may concern" and Delivery Note (Way Bill) mentioning the purpose as 'testing', without mentioning any value or by mentioning very low values, without raising Central Excise Invoice and without payment of Central Excise duty - Held that: - we find merit in the contentions of the learned counsel that the adjudicating authority has not taken full cognizance of the submissions and documents produced by them. In the circumstances, we are of the considered Opinion that the matter requires to be considered de novo by original authority after giving an opportunity to the appellant to submit all documents and materials in their defence, which should be properly analysed and correlated to arrive at well reasoned findings with regard to the veracity or otherwise of the contentions of the appellant. All the issues are kept open - Appeal allowed - matter remanded.
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2016 (10) TMI 820
Input credit - LSHF-HSD - whether the appellants are eligible to avail CENVAT Credit on Low Sulphur High Flash - High Speed Diesel Oil keeping on view that LSHF HSD is nothing but HSD with a different flash point and specific content of sulphur and hence the same is nothing but HSD, which is excluded from the definition of “input”? - classification of goods - interpretation of law - Held that: - the definition of input in 2 (k) of CENVAT Credit Rules, 2004 excludes interalia, High Speed Diesel Oil (HSD) from the meaning of input. It is further seen that in the Central Excise Tariff Act, 1985 the classification of HSD is 2710 19 30. There is no separate sub-classification for LSHF-HSD. This implies that HSD and all its variations will necessarily be classified under the said heading only. The input invoices of LSHF-HSD from Indian Oil Corporation Ltd., also clearly classify the said items under CTH classification 2710 19 30 only. The use of the word High Speed Diesel in the definition of input will therefore necessarily have to harmonize with the tariff entry and heading of the same item in the said Central Excise Tariff Act. This being so, HSD and all its variations including LSHF-HSD, will be in the same footing, for the purposes of Rule 2(k) of CENVAT Credit Rules 2004. Consequently, HSD and all its variations including LSHF-HSD, will be excluded from the ambit of input defined in the said Rule 2(k).
Extended period of limitation - It is not the case that the appellant had not submitted statutory returns disclosing the necessary details. In fact, on going through copies of RT-12 submitted by the appellant we find that product LSHF-HSD or LS/HF HSD, has been mentioned in the input credit statements. However, as indicated in the SCN, and as conceded by the Ld. Counsel, the appellant had described the product as ST 6733 in the input credit statements for the latter part of the impugned period. This being so, we are of the considered opinion that for the periods during which the appellant had indicated the description of the product/input as LSHF-HSD or LS/HF HSD, the department cannot allege suppression and hence any demand of duty for the said irregular availment of credit will be barred by limitation. Whereas, during the period in which the appellant had merely described the product/input as ST 6733, in our view would amount to suppression/and mis-declaration of vital facts and the department is well within its rights to demand duty for said period.
Credit not allowed - however, the demand for the period during which appellant has declared the input goods as LSHF-HSD or LS/HF HSD is not sustainable. The demand for the period during which the appellant has declared the input goods as ST 6733 is sustained - matter remanded to adjudicating authority for the limited purpose of calculating the demand sustained for the said period along with interest and consequential revision of penalty as applicable - decided in favor of Revenue.
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2016 (10) TMI 792
CENVAT credit - Outdoor Catering Service - whether appellant is entitle to avail Cenvat Credit in respect of Outdoor Catering Service when charges of the same was recovered from their employees? - Held that: - decision in the case of Commissioner Vs. Ultratech Cement Ltd [2010 (10) TMI 13 - BOMBAY HIGH COURT] relied upon where it was held that where the cost of food is born by the worker and the service tax is borne by the ultimate consumer of the services, namely worker, the manufacturer cannot take credit of that part of the service tax.
CENVAT credit not admissible as the fact that the cost of catering was recovered from the employees is not under dispute - appeal dismissed - decided against appellant.
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2016 (10) TMI 791
CENVAT credit - Outdoor Catering Service - Employees Accident Insurance Service - Whether the appellant being manufacturer is entitled for Cenvat Credit in respect of Outdoor Catering Service and Employees Accident Insurance Service in terms of Rule 2(k)(i) of the Cenvat Credit Rules, 2004? - the case of The Commissioner of Central Excise, Chennai III Commissionerate Versus M/s. Visteon Powertrain Control Systems (P) Limited, Customs, Excise & Service Tax Appellate Tribunal [2015 (3) TMI 736 - MADRAS HIGH COURT] relied upon - Held that: - the decision of the case squarely applies to the present case where it was held that use of the outdoor catering services is integrally connected with the business of manufacturing cement and therefore, credit of service tax paid on outdoor catering services would be allowable.
The decision in the case of COMMISSIONER OF C. EX., RAIPUR Versus MAHAMAYA STEEL INDUSTRIES [2010 (10) TMI 228 - CESTAT, NEW DELHI] also relied upon where it was held that The Insurance Policy for Workmen’s Compensation has been taken by the respondent to cover the risk of the workers who are involved in the manufacturing process of the final product - the respondents are entitled for Input Service Credit as per Rule 2(l) of the Cenvat Credit Rules.
CENVAT Credit in respect of both the services admissible - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 790
Imposition of penalty u/s 11AC and Rule 27 of the Act - short payment of duty - suppression of facts - N/N.54/2001 C.Ex.(N.T.) dt. 21.6.2001 - payment of duty by availing the notification even after its discontinuance - Held that: - the short payment of duty has been taken place in December 2003 and the due date for filing the return for December 2003 is in January 2004. The show cause notice was issued on 22.12.2004 i.e. well within one year. Since, the show cause notice was issued within one year, proviso to Section 11A is not applicable to the case. Consequently ingredients of the proviso to Section 11A and for invoking the penal provision under Section 11AC are same, penalty under Section 11AC is not imposable, I therefore waive the penalty under Section 11AC of the Central Excise Act, 1944. However, it is apparent on record that the appellant failed to file the return in time. Therefore they are liable for penalty under Rule 27 of the Central Excise Rules 2002. Hence, the penalty of ₹ 5,000/- imposed under Rule 27 is upheld - appeal partly allowed.
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2016 (10) TMI 789
Maintainability of appeal - duty amount involved in the case is Rs. ₹ 15,000/- - Tribunal has discretion either to refuse or to admit the appeal under Second proviso to Section 35B of Central Excise Act, 1944 - Held that: - the impugned order was passed by the Commissioner(Appeals) under Section 35A which is specified under Clause (b) of sub-section (1) of Section 35B. In view of Second proviso to Section 35B (1), this Tribunal has discretion to refuse or to admit the appeal in respect of order referred to clause (b) or Clause (c) or clause (d) where amount of duty, amount of fine or penalty determined by such order does not exceed ₹ 50,000/-(before 6/8/2014) and ₹ 2 Lakhs (on or after 6/8/2014).
As the amount involved is below threshold limit of ₹ 50,000/-, the appeal is dismissed.
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2016 (10) TMI 788
Maintainability of appeal - duty amount involved in the case is Rs. 1,13,852/- and interest thereon - Tribunal has discretion either to refuse or to admit the appeal under Second proviso to Section 35B of Central Excise Act, 1944 - Held that: - the impugned order was passed by the Commissioner(Appeals) under Section 35A which is specified under Clause (b) of sub-section (1) of Section 35B. In view of Second proviso to Section 35B (1), this Tribunal has discretion to refuse or to admit the appeal in respect of order referred to clause (b) or Clause (c) or clause (d) where amount of duty, amount of fine or penalty determined by such order does not exceed ₹ 50,000/-(before 6/8/2014) and ₹ 2 Lakhs (on or after 6/8/2014).
As the amount involved is below ₹ 2 Lakhs, the appeal is dismissed.
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2016 (10) TMI 787
Denial of SSI exemption - N/N. 6/2002-C.E., dated 1-3-2002 - Low Sodium Salt called LoNa - whether denial of CENVAT credit justified on the ground that the Cenvat credit has been taken on the inputs used in the manufacture of goods with brand name of others? - entitlement for both the benefits i.e. SSI exemption and Cenvat credit - Held that: - reliance placed on the decision of Commissioner of Central Excise, Chennai v. Nebulae Health Care Ltd. [2015 (11) TMI 95 - SUPREME COURT] where it was held that manufacture of dutiable goods bearing a brand name is outside the scope and purview of the SSI exemption notification since the branded goods manufactured on job work basis is not covered by the said notification. Once excise duty is paid by the manufacturer on such branded goods manufactured, the brand name whereof belongs to another person, on job work basis, the SSI Unit would be entitled to Cenvat/Modvat credit on the inputs which were used for manufacture of such goods as on those inputs also excise duty was paid.
SSI exemption cannot be denied - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 764
Regular bail - Section 439 of the Code of Criminal Procedure - offences punishable under Sections 9(1) (b), (bb), (bbb) and Section 9(1)(c) of the Central Excise Act, 1994 - Held that: - considering the nature and gravity of accusation made against the applicant in the First Information Report and other papers as also considering the fact that the applicant is ready and willing to deposit ₹ 50,00,000/-, at this stage, without prejudice to his rights and contentions, before the concerned the Central Excise Department towards the duty leviable under the Central Excise Act, this Court is of the view that discretion is required to be exercised in favor of the applicant for grant of bail. Moreover, the applicant assures that he will abide by the terms and conditions that may be imposed by the Court and shall not commit any breach. Hence, the present application is allowed and the applicant is ordered to be released on regular bail in connection with Investigation No. INV/DGCEI/VRU/33/2016-17 conducted by DGCEI, Vadodara and registered with the Gorva Police Station, Dist: Vadodara on his executing a personal bond of ₹ 10,000/- (Rupees Ten Thousand Only) with one surety of the like amount to the satisfaction of the learned Trial Court, and subject to some conditions imposed.
The authorities will release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the conditions imposed is committed, the Sessions Judge concerned will be free to issue warrant or take appropriate action in the matter - application disposed off - decided in favor of applicant.
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2016 (10) TMI 763
Evasion of excise duty - clandestine removal of goods - alloys and non-alloy steel ingots - demand of duty with imposition of penalties - norms as per Rule 173E - serious inconsistencies in the entries as well as the purported meter reading for electricity. The meter reading as on 27.04.1999 was shown higher than the meter reading later given by the electricity department in their monthly bill as on 30.04.2016 - Held that: - production based on estimation basis without any corroboration cannot be the basis for duty demand. In the present case, the purported production as per the private records for the period of 27 days in April 1999 was projected for demand period of 4 years in respect of two respondents and for about two years in respect of the third respondent. Such extrapolation of small base data (even if such data is considered authentic) is not legally sustainable.
When the case of manufacturer suppliers of ingots itself has not been supported with adequate evidence further demand based on such purported excess production of raw material cannot stand. Further, we also note that average consumption of electricity was worked out in respect of M/s Magnum Steels Limited based on the consumption of particular period. The respondents contended that if average has to be worked out of the consumption the data should be taken for the entire year. In that case the average consumption will get altered and the calculation of alleged excess production will not be sustainable.
The demand of duty of such substantial nature cannot be sustained on piecemeal evidence which are uncorroborated. The case of the Revenue has serious infirmities both in law and in fact. Even considering the general principle that in the case of clandestine removal cannot be established by precise and mathematical corroborative evidence, the minimum legal requirement is a preponderance of probability atleast to sustain the allegation. On careful analysis, we find that the case of Revenue against the assessee is full of presumptions and projection with unexplained gaps in analysis of facts which are too many too gloss over. We find that to arrive at a contrary conclusion other than the one arrived by original authority we are not presented with sufficient supportive evidence in the appeals by the Revenue - appeals dismissed.
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2016 (10) TMI 762
Area based exemption - Eligibility of benefit of N/N.50/2003-CE dated 10.6.2003 - whether the appellant did not commence commercial production on or before 31.3.2010 and benefit of notification can be denied to him? - Held that: - construction activity in the factory was not in progress. It was found not fit even to keep the machines therein. This will indicate that whatever production shown to have happened on 30/31-3-2010 cannot be considered as commercial production as the machine was not fit enough for such operation.
Even after 3 weeks of commencing commercial production, the physical condition of the manufacturing unit was found to be in incomplete status. The windows, walls, floor were in unfinished condition. This aspect is not contested by the appellant also. Such being the position even after three weeks of the cut off date, it will test the reason to conclude that commercial production and activity on the Three Layer Blow Film machine was in stream before 31.3.2010. The plant itself is of substantial size and is not in complete state . It is without roof and not apparently ready for commercial production with such new machinery.
The appellant claim to have produced 750 kgs. of poly film on 31.3.2010, quarterly return for the period ending on 31.3.2010 indicated only production of 117 kgs. Such contradiction in the statutory records raised a serious doubts about authenticity of commercial production. The original authority recorded that three layer blow film plant was not at all even in functional stage as on 31.3.2010. The said plant had to be completely dismantled by the supplier later.
Time bar - Held that: - the claim made by the appellant about commercial production on 31.3.2010 was found to be on the basis of mis-represented facts. In such situation, notice issued to demand duty as a consequence of such mis-representation is to be issued within five years in terms of Section 11A(1) of the Act. Accordingly, no infirmity found on this ground.
Appeal dismissed - benefit of notification denied - decided against appellant.
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2016 (10) TMI 761
Liability to duty - principal manufacturer or job worker - N/N.83/94 and 84/94 - whether demand of duty from respondent justified on the ground that principal manufacturer Rajni Timbers P. Ltd did not use the goods supplied by the respondent for further manufacture of the goods but sold them as such in the open market? - Held that: - The fact that the respondent is functioning under notification 83/94 read with notification 84/94 would mean that the respondent has not undertaken any responsibility for discharging the excise duty on the manufacture of goods; which incidentally passes to the raw material supplier as he gives a declaration to their Jurisdictional Divisional Office as also the respondent s central excise office. In the case in hand, there is no dispute that such declarations were given. If it is so, we find that the first appellate authority has correctly relied upon the Board s circular no. B-32/1/94-TRU dated 18.4.1994 to hold that the principal manufacturer i.e. who furnished the undertaking under notification 83/94 and 84/94 is liable to duty - appeal dismissed - decided against appellant.
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2016 (10) TMI 760
Denial of CENVAT credit u/r 9(10(b) of the CENVAT Credit Rules, 2004 - payment of duty on detection of the fact of under-valuation of imported goods - amount paid by reason of fraud, collusion, suppression of facts with the intention to evade payment of duty - whether denial of CENVAT credit on the ground that the non-levy or short levy of duty was occasioned by fraud, collision, wilful mis-statement, which falls under the restricted provisions of Rule 9(1)(b) of CENVAT Credit Rules, 2004 justified? - Held that: - the decision in the case of BOSCH CHASSIS SYSTEMS INDIA LTD. Versus CCE., DELHI-III, GURGAON [2008 (9) TMI 106 - CESTAT NEW DELHI] relied upon where it was held that mere filing of application before Settlement Commission for waiver of interest, penalty and immunity from prosecution and suo motu payment of duty, not amounts to admission of guilt, fraud, collusion etc.
Since the appellant himself paid the differential duty into the Govt. exchequer and availed the CENVAT credit on the strength of the challans duly certified by the DRI officials, the restriction provided in Rule 9(1)(b) is not applicable and the appellant is eligible to avail the CENVAT credit - appeal allowed - decided in favor of appellant.
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