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Central Excise - Case Laws
Showing 161 to 180 of 253 Records
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2016 (7) TMI 631
Irregular credit on MS Beam, MS Channels, MS Sections, TMT bars, HR sheets, HR coils, welding electrodes - extended period of limitation invoked - suppression of fact - Held that:- Undisputedly the appellant has furnished returns (ER-1) and also filed details of the credit availed. There is no provision/column in the ER-1 return to mention the prupose/place of use of inputs/capital goods. When returns are filed, it is for the proper officer to conduct scrutiny of the returns and inform the assessee about defects. If the assessee disputes a show cause notice can be issued within the normal period. In the present case Revenue has not stated what prevented the proper officer from conducting scrutiny of returns and issuing show cause within normal period. The Commissioner (Appeals), in my view has rightly applied the judgment rendered by Hon’ble Apex Court in the case of Continental Foundation Jt Venture Vs CCE, Chandigarh-1 [2007 (8) TMI 11 - SUPREME COURT OF INDIA ] wherein held that mere omission to give correct information is not suppression of facts
Revenue has miserably failed to establish the allegation of suppression of facts. In such circumstances, the demand raised invoking extended period is unsustainable. - Decided in favour of assessee.
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2016 (7) TMI 630
Eligibility to Cenvat Credit availed on the service tax paid on advertising charges - Held that:- Cenvat Credit can be availed at one unit. - Decided in favour of assessee
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2016 (7) TMI 629
Denial of credit availed on TMT Rebar Coils, TMT Rebar and cement - time barred demand - Held that:- It is seen that the period involved is July 2009. The show-cause notice is dated 01/04/2013, which is beyond the normal period. From the records, as find no evidence to establish that appellant suppressed facts with intent to evade payment of duty. The findings of Commissioner(Appeals) is that appellant ought to have ensured whether credit is admissible before availing credit. This does not amount to suppression. Further the show-cause notice relies upon ER-1 returns filed by appellant. This again established, that appellant disclosed necessary details in ER-1 returns. All these prove that appellant is not guilty of suppression. Therefore the extended period is not invokable. Demand is unsustainable being time-barred. - Decided in favour of assessee
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2016 (7) TMI 596
Extended period invoked - duty demand - Held that:- It is a well settled law that when during the relevant period, there were decisions in favour of the assessee, he cannot be attributed with any mala fide so as to invoke the longer period of limitation. In fact, we find that in an identical case involving the same issue of insulation bricks and by taking note of the Larger Bench decision of the Tribunal in the case of Prakash Industries [2000 (5) TMI 59 - CEGAT, COURT NO. III, NEW DELHI], which subsequently stand overruled by Supreme Court in the case of Kohinoor Elastics Pvt. Ltd. [2005 (8) TMI 115 - SUPREME COURT OF INDIA], the Hon’ble Delhi High Court in the case of Commissioner of Central Excise-Delhi Vs. Sun Shine Industries (2015 (10) TMI 678 - DELHI HIGH COURT) has held that extended period would not be invokable due to uncertain legal podsition. As such we are of the view that issue of limitation is squarely covered by the above referred decision of the Hon’ble Delhi High Court. Accordingly, we set aside the impugned order and allow the appeal in favour of assessee.
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2016 (7) TMI 595
Cenvat credit denied - description of the goods disclosed in the invoice as M/S. Scrap which is not the raw material for the appellant - Held that:- Appellant has been able to obtain the certificate from the Range Superintendent of supplier of goods who certified that the goods supply to the appellant are MS. Ingots and not M.S. Scrap. As the description of goods has been certified by the Range Superintendent of the supplier in the same was not examined by both the authorities below. If the same was considered, the cenvat credit could have been allowed but the authorities below have not done so but confirmed the demand against the appellant. As description of goods have been explained satisfactorily with documentary evidence, in that circumstances, thus hold that the appellant has correctly taken cenvat credit on the goods in question - Decided in favour of assessee.
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2016 (7) TMI 594
Cenvat credit of service tax availed on freight on outward transportation of goods denied - Held that:- Ownership in goods rests with appellant till delivery to customer. The appellants have also furnished a certificate issued by Chartered Accountant wherein it is certified that freight is included in price of goods and form integral part of assessable value. That appellant has paid appropriate duty of excise payable when calculated by including freight in the assessable value, in case of sales made on FOR basis. These documents sufficiently establish that sale was on FOR basis, and freight was borne by appellant.
The Board Circular No. 97/8/2007-ST dated 23.08.2007 lays down three conditions to be satisfied to avail credit of outward transportation on FOR basis. As find that all three conditions are satisfied. The Hon’ble High Court in the case of CCE & Cus Vs Parth Poly Wooven (P) Ltd., [2011 (4) TMI 975 - GUJARAT HIGH COURT ] referring to this Circular held that outward transportation is an input service and is eligible for credit.
Following the judgment in the above case and applying the same to the facts presented before me, I hold that denial of credit is not legal or proper. - Decided in favour of assessee.
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2016 (7) TMI 593
CENVAT credit on service tax paid availing the security service - Held that:- When the buyer always opt to take delivery of the goods only upon pre-dispatch testing. The place where such testing was carried out was subjected to security provision for protection of the goods. Therefore the service tax suffered in respect of security service availed cannot be said to be out of the zone of consideration of the input service. Accordingly, the service tax paid availing the security service entitles the appellant to the CENVAT credit. See Ramala Sahkari Chini Mills Ltd. Versus Commissioner Central Excise, Meerut-I [2016 (2) TMI 902 - SUPREME COURT] - Decided in favour of assessee
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2016 (7) TMI 592
Cenvat Credit on capital goods - claiming depreciation under the Income Tax Law - Appellant relied upon the Chartered Accountants Certificate to argue that calculation made in the show cause notice and confirmed has been wrongly arrived at - Held that:- As this issue of miscalculation/wrong calculation was not raised before the lower authorities, therefore, the case is required to be remanded to the adjudicating authority for verifying the claim of the Appellant. Appellant should also produce all the relied upon documents, including chartered accounts certificate produced before this bench. Needless to say that a personal hearing should be extended to the Appellant for explaining their case regarding correct calculation of Cenvat Credit required to be reversed.
Imposition of penalty - Appellant enjoyed double benefits of taking Cenvat Credit and availing depreciation by suppressing the facts - Held that:- When the provisions of Cenvat Credit Rules were abundantly clear then Appellant cannot claim ignorance of law for not imposing penalty. Accordingly penalty has been correctly imposed upon the Appellant. However, looking to the fact that the quantification of correct demand is required to be worked out by the Adjudicating Authority under this order, the amount of penalty on such re worked amount will be required to be calculated and Appellant will be entitled to option to pay 25% of such reduced penalty on the redetermined amount, along with interest, and 25% reduced penalty under Section 11 AC, if these amounts are paid within one month from the date of receipt of final order passed by the Adjudicating Authority in the remand proceeding.
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2016 (7) TMI 591
Cenvat Credit on capital goods - simultaneous availing depreciation - The appellant in the year 2004-05 availed cenvat credit to the tune of 50%, i.e. amounting to ₹ 104828/- and remaining 50% capitalized and claim the depreciation on the total assessable value and 50% of excise duty, i.e. ₹ 104828/-. In the year 2005-06, the appellant reduced an amount of ₹ 104828/- from the capital account and availed cenvat credit of the said amount as remaining 50%. The show cause notice was issued proposing denial of cenvat credit. - Held that:- As per Rule 4(4), it clearly provides that only part of the value of capital goods which represents the amount of duty on such capital goods, which the assessee claimed as depreciation shall not be allowed as cenvat credit. In the present case, the part of the value, which claimed as depreciation, is ₹ 16569/- only. Therefore, to this extent the appellant is not entitle for the cenvat credit, however the remaining amount, i.e. ₹ 88263/- (Rs. 104832-16569/-) is eligible as cenvat credit to the appellant for the reason that in respect of this amount of ₹ 88263/-, depreciation was not claimed. - Decided partly in favor of assessee.
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2016 (7) TMI 590
Eligibility of Cenvat credit on air travel agent and rail travel agents services - Held that:- It is clear from the definition that sales promotion is included in the inclusive part of the definition and there is nothing contrary to prove that the services were availed for any personal activity and the appellants had availed the services in the course of their sales promotion which is directly related to the manufacture of the final product. Also guided by the decision of the Hon’ble High Court of Bombay in the case of Coca Cola India Ltd, [2009 (8) TMI 50 - BOMBAY HIGH COURT ] and Good Luck Steel Tubes ltd vs. C C EX, Noida, (2014 (1) TMI 37 - CESTAT NEW DELHI ) wherein it was held that when air travel was performed for the purpose of company business the Service Tax paid on the said air travel agent service is admissible as credit, the same principle is applicable for rail travel agents service also. Therefore, the credit availed on the air travel and rail travel agent service is admissible. - Decided in favour of assessee
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2016 (7) TMI 556
Refund - manufacturing of Gutka - Abatement in case of non-production of goods - closing of the factory - Held that:- The Rule 10 of the Pan Masala Packing Machines Rules specifies that the intimation for closure should be, at least 7 days’ prior to the commencement of the period. The question which arises before us is whether this condition precedent is to be rigidly enforced.
The only objection of the department is that the intimation for closure was not given three working days prior to commencement of the period of closure. We are of the view that when the purpose of giving prior intimation three working days prior to commencement of closure, is that the officers have enough time to seal the machines in the manner as prescribed in this rule, and this purpose has been achieved, as the sealing of the machines in the manner prescribed was done on 14-1-2013 in pursuance of the orders given by the Assistant Commissioner on 11-1-2013, the Conditions of the intimation of closure being given at least three working days’ prior to closure lose its significance and the benefit of abatement cannot be denied on the ground that intimation of less than three working days’ prior to closure. - Refund allowed - Decided in favor of assessee.
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2016 (7) TMI 555
Valuation - inclusion of extra packing charges which is in the form of catch covers - valuation of physician samples - Held that:- the appellant has valued the physician sample based upon pro rata basis with the comparable goods available, the comparable goods being sale pack of the physician sample. - Following the decision in the case of Medley Pharmaceuticals vs. CCE, Daman [2011 (1) TMI 13 - SUPREME COURT OF INDIA] decided in favor of assessee.
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2016 (7) TMI 554
Denial of credit on various input services for the period September, 2011 to July, 2012 - various services including AMC of air conditioners and lifts - services non qualify as input service as per Rule 2(I) of Cenvat Credit Rules 2004 - Held that:- The air conditioners are installed in the office as well as manufacturing area to maintain adequate temperature for manufacture of good. This service can be treated an activity of modernization of factory and office of the factory premises. Therefore, the same qualify as input service as per Rule 2 (I) of Cenvat Credit Rules, 2004. Consequently, the credit on AMC of air conditioners is allowed.
AMC of lifts - lifts are used for taking material from lower floors to upper floors and bringing from upper floors to lower floors of the factory premises having three floors. As the usage of lifts has been explained by the appellant that the lifts facilitate in movement of raw material and finished goods manufactured by the appellant. Therefore, the AMC of lifts has nexus with manufacture of excisable goods. Therefore, the appellant is entitled for credit on AMC of lifts as per Rule 2(I)
Business tour and hotel boarding and lodging services have been used by the appellant for marketing and sale promotion of finished goods as well as procurement of raw material or capital goods. Therefore, these services are entitled for input service credit as the same is integral part of manufacturing activity. Therefore, the input service credit is allowed to the appellant.
Tour and travel service has already reversed the credit on these services, therefore, the credit is disallowed as the service has been excluded from the scope of the input service with effect from 1.4.2011.
Customs clearance service has been used in relation to obtaining the export incentives. Therefore, the same has nexus with manufacture and clearance of export of goods. In that circumstance, the appellant is entitled for credit.
Construction service has been used for repair and maintenance of factory premises is specified as an admissible input service under Rule 2(I) of Cenvat Credit Rules, 2004, therefore, the same is allowed.
Insurance service has been used for insurance of factory premises, plant and machinery and stock of goods. The said service has direct nexus with manufacturing of excisable goods. Therefore, the credit cannot be denied. Consequently the credit on the said service is allowed.
Office maintenance service has been used for house keeping/maintenance of factory preemies of factory preemies as well as office of the factory located in the same premises, therefore the same is entitled for input service credit. Consequently, the credit on the said service is allowed.
Photography service has been used for taking photocopies of purchase orders for procurement of raw material, despatch of documents of final product and miscellaneous documents pertaining to accounts/audit and fiancé. The said service has direct nexus with manufacturing activity of the appellant. Moreover, audit and accounting service has specifically been allowed as input service. Therefore, the credit cannot be denied. Consequently, the credit on the said service is allowed.
Photography service for samples of export goods manufactured by the appellant has been used for taking for photographs of the samples of goods for procurement of export orders. The said service has direct nexus with manufacturing activity, clearance and export of goods for marketing and sale promotion. In that circumstance, the appellant is entitled to avail the credit on the said service.
Professional and consultancy service has been used by the appellant for organizing a meeting of M/s. Sarita Handa, Director in foreign for export of excisable goods. The said service is used by the appellant for marketing and sale promotion of goods manufactured by them. Therefore, the said service is having a direct nexus with manufacturing activity. Consequently, the appellant is entitled to avail the credit on the said service. - Decided in favour of assessee
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2016 (7) TMI 553
Suppression/mis-declaration - under valuation of the scraps - comparable goods by another supplier at a much higher price available - Held that:- We find that the show-cause notices issued by the lower authorities do not bring out any facts by which it could be said that the appellants were aware of under valuation of the scraps supplied by M/s.Greaves Ltd. to them. There is nothing on record to establish that the appellants were aware of the similar products being manufactured by another job worker M/s.Transmissions, Bombay and supply of the same was at a higher assessable value.
The appellants have clearly declared in their invoices that they are converting the scraps supplied by M/s.Greaves into ingots and the invoices clearly shows the manner in which they arrived at the assessable value for the purpose of Central Excise duty. The Hon’ble Supreme Court in the case of Ujagar Prints (1989 (1) TMI 124 - SUPREME COURT OF INDIA) has held that the valuation of goods produced on job work basis would be done on the basis of cost of material supplied and the processing charges. The invoices issued by the appellants are in consonance with the said decision of the Hon’ble Supreme Court. In these circumstances, we find that there is no express or implies suppression/mis-declaration by the appellant.
The argument of the learned AR that the appellants had purchased the material from M/s.Greaves Ltd. also does not help the revenue. So long as it is not established that the appellants were aware of the supply of comparable goods by another supplier at a much higher price. In the instant case there is no evidence that the appellants have recovered any price higher than the declared in the invoice. In these circumstances even if the arguments of the revenue that the appellants had purchased the material from M/s.Greaves Ltd. there is no suppression or mis-declaration forthcoming. Notice is barred by limitation. - Decided in favour of assessee.
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2016 (7) TMI 552
Valuation of physician samples manufactured along with other regular medicament - Held that:- The issue stand decided against assessee by the Honble Supreme Court decision in Medley Pharmaceuticals Ltd. [2011 (1) TMI 13 - SUPREME COURT OF INDIA ], as such, fairly agrees that duty confirmation by the lower authorities is as per the declaration of law
In view of the fact that issue on merits stands against the assessee, we uphold the demand confirmed against them but falling within the limitation period. As admittedly, there was confusion in the field and there were various circulars issued by the Board supporting the assesses stand, the demand falling within the limitation period would be recalculated by the original adjudicating authority.
As regards the penalty, we find that in similar set of facts and circumstances, Tribunal in the case of M/s. Lupin Ltd. [ 2016 (2) TMI 682 - CESTAT NEW DELHI] have already held that there is no case for penalty. We have also held that extended period of limitation is not available to the Revenue inasmuch as there was no malafide in which case also, no penalty can be imposed
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2016 (7) TMI 551
Cenvat Credit - Damage compensation given by the supplier of capital goods - whether dis-entitled to Appellant taking corresponding credit to the Appellant - Held that:- In view of CBEC vide Circular No.877/15/2008-CX dated 17.11.2008 any reduction in prices will not disentitle the recipient from taking full Cenvat Credit of duty shown in the invoices. In the present case it is not even the case of reduction in prices of the capital goods and the amount received by the Appellant represents compensation given by the supplier of the capital goods for delay in commissioning of the project. There is no evidence on record that the supplier of the capital goods obtained any refund with respect to the duty paid on capital goods, indicated in the invoices, on which Cenvat Credit is taken. In the light of case law relied upon by the Appellant and CBEC Circular dated 17.11.2008 Cenvat Credit availed by the Appellant cannot be reduced on account of damages received by the Appellant from the supplier of capital goods.
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2016 (7) TMI 550
Penalty under Rule 26 of the Central Excise Rules, 2002 - non mention of dimensions of goods supplied - Held that:- The adjudicating authority has imposed penalty of ₹ 1,00,000/- on the appellant. The lower authorities have come to a conclusion that appellant have not mentioned any dimensions of goods supplied hence there was malafide intentions. As find that there may be no malafide intentions but may be due to some genuine reason on the part of the appellant, improper dimensions may have been mentioned on the invoices. This would not mean that the penalty needs to be set aside as there is contravention of rules. While upholding the penalty on the appellant reduce the penalty from ₹ 1,00,000/- to ₹ 50,000/- and dispose of the appeal as indicated herein above.
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2016 (7) TMI 549
Categorisation of grey fabrics - Job work - cenvat credit - duty demand - Held that:- The categorisation of grey fabric will need to be done with reference to the final products cleared from the hands of appellant-assessee. It is not in dispute that the ultimate products which has been exported by the appellant-assessee are processed fabrics and the appropriate duty has been paid at that stage by them. Keeping this in view, we have no hesitation in categorising the grey fabrics as input/ intermediate products.
Rule 4(5)(a) of the Cenvat Credit Rules permits such goods to be sent to the job worker for further processing. Under the permission granted by the Commissioner under Rule 4(6), the processed fabric has been cleared directly for export from the premises of the job worker, by the appellant - assessee on payment of appropriate duty. Under the circumstances, we find that the view taken by the Commissioner to consider these goods as finished goods is totally erroneous and the demand of duty itself is without the sanction of law. We accordingly set - aside the order dated 28.09.2007 of the Commissioner. - Decided in favour of assessee.
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2016 (7) TMI 548
Cenvat credit disallowedon various MS Plates, Flats, Channels, Angles and Beams etc. - credit was disallowed mainly on the ground that these are general steel items used as support structures in the factory and cannot be considered either as capital goods or as parts and components of any capital goods - Held that:- Hon’ble Supreme Court in CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. reported in [2010 (7) TMI 12 - SUPREME COURT OF INDIA] held in respect of similar type of inputs by applying user test, the credit is available for MS Channels used in fabrication of chimney, categorizing it under the scope of capital goods.
Reference can also be had to the decision in CCE, Tiruchirapalli vs. India Cements Ltd. (2013 (1) TMI 5 - Madras High Court ). In the present case on perusal of the certificate given by the Chartered Engineer it is apparent that the specific usage of various MS items relatable to various capital goods have been mentioned. The insistence of learned Commissioner (Appeals) on the drawings and designs of the capital goods is of no relevance considering the above factual position and as supported by Chartered Engineer certificate. - Decided in favour of assessee
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2016 (7) TMI 499
Refund of terminal excise duty (TED) where goods were exempted from duty - Period of limitation - Section 11B - supply of goods under the category of International Competitive Bidding on payment of duty - Though the goods cleared were eligible for exemption, they have paid duty and claimed refund - Held that:- The short point for decision is the eligibility of appellants for refund claims in terms of notification no.12/2012-CE read with Section 11 B of the Act. The admitted facts of the case are that the appellants supplied the goods in pursuance of 'International Competitive Bidding' on payment of duty. Since these goods are exempt, they filed claims for refund initially with the office of DGFT. The TED was processed and sanctioned by the office of DGFT. As noted earlier, the policy was changed vide notification dated 18.04.2013 of Ministry of Commerce by taking note that these goods were exempt ab initio and will not be eligible for refund of TED.
This policy change resulted in return of their claim. The appellants approached the jurisdictional Excise Officer for refund. These refund claims are to be processed necessarily in terms of Section 11 B. The impugned orders examined the legal issue and allowed the claims, which are within time limit and disallowed those claims filed beyond the period stipulated under the said Section.
The exemption available was not availed, which resulted in claim for refund later. Such claims are rightly covered under the provisions of Section 11B. - Refund beyond the prescribed period rejected - However interest on delayed refund to be granted - Decided partly in favor of assessee.
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