|
Advanced Search Options
Central Excise - Case Laws
Showing 61 to 80 of 278 Records
-
2016 (9) TMI 1124
Demand alongwith interest and penalty - Zinc Dross and Zinc Ash arising during the manufacture of G.P. Coils & G.P. Sheets - Held that:- it is very clear from the Circular dated 25th April, 2016 issued by C.B.E.C. that Revenue has taken a view that Dross, ash or any such by-product or waste of non-ferrous metals are non-excisable goods. We, therefore, hold that the impugned Order-in-Original is liable to be set aside. - Decided in favour of appellant with consequential relief
-
2016 (9) TMI 1113
Imposition of penalty - Rule 25 of Central Excise Rules, 2004 - contravention of Rule 8(3A) of the Central Excise Rules, 2004 - duty liability for the month of July, 2010 and August 2010 were paid with delay ie. beyond the period of 30 days - acute financial constraints - Held that:- in view of the judgment of Hon'ble High Court of Gujarat in the case of Indsur Global Ltd Vs UOI [2014 (12) TMI 585 - GUJARAT HIGH COURT] which has struck down the said Rule 8(3A) as unconstitutional, the imposition of penalty for contravention of the said rule will not lie. Therefore, the impugned order to this extent is not sustainable. - Decided in favour of appellant
-
2016 (9) TMI 1102
Maintanibility - Impugned order regarding exemption under Notification No.14/2002-CE dated 01-03-2002, passed by Tribunal by relying upon its earlier order passed by a Larger Bench was challenged by the Department before the Gujarat High Court - Appeal held to be non maintainable vide order passed in the case of Commissioner of Central Excise Vs. Shanti Processors Ltd. [2015 (11) TMI 1164 - GUJARAT HIGH COURT] - Held that:- by considering the Shanti Processors Ltd. case (supra), the issue involved in the present appeal is same, the appeal being not maintainable before this Court under Section 35L of the Central Excise Act, 1944, the same is dismissed as not maintainable, however, with liberty to the appellant to avail of its appropriate remedy before the appropriate forum. - Decided in favour of Revenue
-
2016 (9) TMI 1101
Refund claim - seeking direction to refund a sum together with interest at the rate of 6% from the date of deposit till the date of payment - stay granted on the condition that the petitioner pays a sum of ₹ 15,00,000/- - Held that:- the amount which has been paid by the petitioner is not strictly in the sense of pre-deposit, but it may be akin to one, as the same has been done pursuant to the interim order granted by the Division Bench of this Court. Having succeeded before the Division Bench, the petitioner is entitled to refund of the amount deposited. So far as the interest portion is concerned, the petitioner has referred to circular which contemplates the payment of interest when pre-deposit is effected and the assessee succeeds in the appeal. There is no reason as to why such condition should not be imposed in the instant case also because what was deposited by the petitioner is akin to a pre-deposit as it has been done pursuant to the order passed by the Division Bench of this Court.
Therefore, the present writ petition is disposed of by directing the respondent to consider the documents placed by the petitioner namely, the payment voucher and the information regarding the challan status as culled out from the website of the department and verify the records maintained by the department and thereafter, effect refund of the amount paid by the petitioner. So far as the demand for interest at the rate of 6% is concerned, the respondent is directed to take note of the law as pointed out in the preceding paragraphs and pass orders on merits and in accordance with law. - Petition disposed of
-
2016 (9) TMI 1100
Valuation - includability - ammortised tool cost - demand alongwith penalty - Held that:- the tooling agreement with M/s.Ford India was completed only on 13.7.2000 and that they paid the duty involved immediately thereafter on 14.7.2000 and 20.7.2000, indicated the reason why they could not pay the duty earlier. Furthermore, the Settlement Commission noted that there are no other mala fides. Thus, on facts, the Settlement Commission has taken a decision on the first respondent's application, wherein the first respondent has accepted the entire duty liability and also noted the fact that after the first respondent agreed for the appropriation, only after a period of about three years, show cause notice was issued. Thus, in the light of the factual finding recorded by the Commission, this Court exercising jurisdiction under Article 226 of the Constitution of India, will not act as if it is a Second Appellate Authority over the orders passed by the Commission, in the absence of an perversity in the order. - Decided against the Revenue
-
2016 (9) TMI 1099
Clandestine manufacture - 7072.978 MT iron and steel products without payment of duty - private records recovered from the residence of the appellants - licit clearances made by the main Appellant also find mention in the private records, indicating the correctness of the private records - Held that:- argument made by appellant that the quantities at Sl.No.18,19,24,25 & 26 of the same page which show marked differences between quantities shown in the private records and the Central Excise invoices has force. Accordingly it is held that private records recovered from the residential premises by the investigation is not the correct representation of the manufacture and clearance of the main Appellant even if accepted to be admissible evidences. Appellants have also argued that maximum capacity of their furnace/month is 1200 MT. No efforts were made by the department to know whether the recipient of finished goods indicated in the private records or those claimed by the main Appellant in their reply were actually existing or not. Similarly for manufacturing such huge quantities of finished goods, as alleged to be clandestinely manufactured and cleared by the main Appellant, there must be procurement of substantial quantities of raw materials. The entire investigation conducted does not throw any light as to how main Appellant clandestinely procured huge quantities of raw materials for manufacturing finished goods. There are allegations of not receiving of the raw materials, but no evidence of excess procuring raw materials without duty paying documents has been brought on record by the department.
It is difficult to appreciate that on one hand Appellant will clandestinely divert the duty paid raw materials and on the other hand procure non-duty paid raw materials for clandestine manufacturing and clearances of finished goods when no stock variation either in the raw material stock or finished goods stock was detected during the course of investigation. The maximum capacity of manufacture of 1200 MT/month was not refuted by the department by carrying out any study that actual production per month could be more than 1200 MT . It was clear during the investigation that Appellants were not giving the correct picture in explaining the private records recovered from their residence. Under the circumstances it was incumbent upon the department to find out evidences for corroborating private records with other independent evidences to pin down such smart operators and not resort to presumption and surmises.
Clandestine removal - Held that:- in the present case there is no indicator of clandestine removal. Though in the present proceedings a seizure of ₹ 2.00 Lakh was made during the investigation but the same has not been confiscated as sale proceeds of the alleged clandestinely removed finished goods. Therefore, in view of the above observations and the settled proposition of law in the relied upon case law, offence of clandestine removal of finished goods and duty demand against the main Appellant, is not sustainable and Appeal filed by the main Appellant is required to be allowed on this account.
Cenvat credit - allowabilty - cross-examination of certain persons was sought by the main Appellant who confirmed duty paid raw materials to have been received by them - Held that:- Adjudicating authority while framing issues of the Order-in-Original neither made cross-examination of witnesses as the issue nor gave any findings as to why cross-examination of witnesses can not be allowed. It is now a well accepted legal principle that cross-examination of the witnesses, whose statements etc. are relied upon, has to be provided to the aggrieved party. On this ground the issue of rejection of credit is remanded to the Adjudicating authority to make efforts to provide the cross-examination of the relevant relied upon witnesses and decide this aspect afresh in denovo proceedings.
Imposition of penalties - no findings have been given at all in the Order-in-Original as to why penalties are required to be imposed - Held that:- in the absence of any findings by the Adjudicating authority in this regard penalties imposed upon the Appellants are set aside. - Appeal partly allowed and partly remanded back
-
2016 (9) TMI 1098
Whether Appellant is required to discharge an amount under Rule 6(3)(1)(b) of the Cenvat Credit Rules, 2004 with respect to value at Spent Sulphuric Acid supplied by the Appellant under Notification No.6/2006-CE dated 01.03.2006 at NIL rate of duty - Held that:- by respectfully following the ratio of various case laws relied upon by the appellant that the CENVAT credit cannot be denied, nor the penalty can be imposed on the clearance of Spent Sulphuric Acid , as it is not a final product, which is manufactured along with Acid Slurry , attracting duty at 8% under Rule 57CC of the Central Excise Rules, 1944. Rule 57CC of the erstwhile Central Excise Rules, 1944 is comparable to Rule 6(3)(1) of the Cenvat Credit Rules, 2004. - Decided in favour of appellant
-
2016 (9) TMI 1097
Cenvat credit - availed on 836.99 MT of steels used for fabrication of misc. structures - Rules 12 and 13 of erstwhile Cenvat Credit Rules, 2001/2002 read with Section 11 A of the Central Excise Act, 1944 - three main categories of items viz., M.S. Beams, Angles, Plates and Channels used to support the various ducts and cyclones in the appellant's factory, iron steel items used for fabricating, attending platforms, which are generally erected around a machinery and staircases and ladders and fabricated using the angles, plates, etc.
Held that:- the lower authorities denied the credit mainly on the ground that the M.S. items, on which credits have been taken are falling under Chapter 72, which is not covered under the category of capital goods . The second main objection is that these items were used for fabricating the structures, which become immovable upon fixing and hence, results in a non-excisable item. Hence, the credit is not eligible on any of them. We find that the denial of credit by the lower authorities is on the ground that the items are not used in the manufacture of capital goods as none of the items, as described above, arising after fabrication, can be considered as accessories of the capital goods. Further, they become immovable upon fabrication. We find both these arguments as un-sustainable. Much emphasis has been made on the requirement and necessity of emergence of excisable items after fabrication using the impugned goods. We do not find any such requirement specifically mentioned in the definition of either in the inputs or capital goods under Cenvat Credit Rules.
In the present case, the lower authorities have not categorically established that upon fabrication, an immovable civil structure is emerged. Fabrication of structural as an accessory for necessary operation of capital machinery cannot be considered as creation of immovable property. It is relevant to note the Hon’ble Supreme Court’s observation in Rajasthan Spg. & Wvg. Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA]. The Hon’ble Apex Court allowed the credit on steel plates and M.S. channels used in the fabrication of chimney applying user test . In other words, the usage of a particular item in the appellant s premises will determine the credit eligibility rather than its classification alone. Hence, we find no merit in the impugned order and accordingly set aside the same. - Decided in favour of appellant
-
2016 (9) TMI 1096
Valuation - includability - additional consideration - debit notes raised to various buyers of excisable goods to compel them to return the durable packing - amount raised in debit note have not been received by the appellant - Demand - Held that:- any debit note issued with reference to sale transaction of excisable goods will necessarily be form part of the transaction value. The Central Excise duty is not levied only on the quantum of consideration actually received by the appellant. The invoice as well as debit note indicate the sale value of excisable goods. Some amount has been defaulted by the buyer cannot result in reduction in duty incidence. In other words Central Excise duty is not on receipt basis. The levy is on manufacture and the collection is at the time of clearance. As such, we find no merit in the appellant s plea for non-inclusion of the additional consideration admittedly raised in the form of various debit notes to the buyers.
Valuation - includability - additional consideration - cost of raw material supplied free by the buyer of finished goods - Demand - Held that:- the raw material received free of cost has to be additional consideration over and above the amount received by the appellant towards sale of the finished goods. Admittedly the free raw material would have resulted in the lesser invoice value which does not duly reflect the normal transactional value for excise duty purposes.
Demand - lesser payment of duty paid on the cables which were cleared for second time - appellants claimed that these goods were re-manufactured by using additional inputs as untenable - Held that:- the appellants received back the finished goods, did some processing to obtain similar finished goods and cleared to another customer. There is nothing on record to say that the second time clearance was of different goods resulting after a process of manufacture. In terms of Rule 16 (2) if the process to which the goods are subjected before being removed does not amount to manufacture the manufacturer shall pay an amount equal to the Cenvat credit taken under sub-Rule (1). In the present case, the appellant is liable to pay the Cenvat credit already availed on return of the said finished goods. Hence, we find no merit in the plea of the appellant against such demand.
Demand - capital goods cleared to the other unit of the appellant - denial of credit was on technical ground and the machine was sent to their own unit for further maintenance - Held that:- it is found that the capital goods are no more available with the appellant for intended use and there is no record of their return after maintenance work. In such situation, the Original Authority is correct in demanding to recover the credit taken on such capital goods.
Cenvat credit - misuse of provisions of Rule 16 - availed as a credit by the appellant upon return of duty paid final products back to the unit - defective goods returned back have been accounted for by the appellant - denial of such credit is on the ground of alleged motive of appellant to avail the credit and to keep the goods without clearance in the unit - Held that:- the duty paid goods when returned back with a purported intend of re-conditioning or for any other reason the appellant is rightly eligible for credit of duty already paid. The presumed motive or the retention of returned goods inside the premises for long time are not reasons for denial of credit under the said Rules. In fact it has to be noted that duty is only a portion of the sale value of finished goods which has got considerable economic value for the manufacturer and nobody will intend to keep such saleable goods only to avail credit on returned goods. The misuse of Rule 16 has not been demonstrated in the present case as per the original order. As such, we find the denial of credit by the Original Authority is not sustainable.
Imposition of penalties - Held that:- the penalty imposed under Section 11AC has been justified as the various additional consideration, as discussed above, have escaped duty and the appellant's act of non-payment due to not disclosure of material facts cannot be denied. As such, we uphold the penalty imposed under Section 11AC. Regarding penalty under Rule 15 of Cenvat Credit Rules, 2004, since the main demand of ₹ 63,32,710/- in terms of Cenvat Credit Rules, 2004 was held unsustainable the penalty also required to be suitably reduced. Accordingly, we reduce the penalty to ₹ 1,00,000/- under Rule 15 of Cenvat Credit Rules, 2004. Since, penalty under Section 11AC has already been upheld, we find further penalty under Rule 25 is not warranted in the present case. Accordingly we set aside the penalty imposed under the said Rule. - Decided partly in favour of appellant
-
2016 (9) TMI 1095
Cenvat Credit - impact of subsequent decision of apex court - Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Sub-section (1) of Section 11A of Central Excise Act, 1944 - procurement of plastic laminated packing pouches as their inputs for packing their finished goods - Hon’ble Supreme Court ordered that plastic laminated packing pouches should not be used for packing of Chewing Tobacco on 11th May, 2011 and cenvat credit availed was for the period from March, 2009 to March, 2011 - Held that:- it is found that the date on which Cenvat credit was taken by the appellant the inputs on which the Cenvat credit was taken were regularly in use for packing the finished product and therefore the Cenvat credit availed was eligible. I also find that Cenvat credit which is validly taken needs to be reversed only when the inputs are cleared as such. I, further, note that Rule 14 of Cenvat Credit Rules, 2004 provided for recovery of irregularly availed Cenvat credit and it is beyond the scope of said Rule 14 of Cenvat Credit Rules to recover the Cenvat credit which was validly taken. I, therefore, hold that the Show Cause Notice is misconceived and therefore, I set aside the Show Cause Notice, Order-in-Original and Order-in-Appeal. - Decided in favour of appellant
-
2016 (9) TMI 1094
SSI exemption - wrong availment of Exemption benefit - Notification No.175/86-CE and 1/93-CE - denial of SSI notification - clubbing of value of clearances - impugned order does not hold one person as the manufacturer and the others as dummies - Held that:- the manufacture and clearances made by the respective noticees/appellants - M/s Atlantic Chemical Industries, M/s Foamsil Chemicals (not appellant here) and M/s Arun Chemicals for the item namely RBA availing the benefit of Notification No.175/86-CE (1/93-CE later) have to be clubbed together as we hold that these units are one and the same, when their operations are under common management and financial control and have mutuality of financial interest with each other. When it is so, then we agree with the findings of the impugned order. The three units namely, M/s Atlantic Chemical Industries, M/s Foamsil Chemicals and M/s Arun Chemicals, whatever is their constitution, (these are proprietary concerns), are under common management and closely controlled by only one person Shri J.S. Jain, who is one of the appellants here. The facts and circumstances have warranted to examine the reality of these units; and after going behind the mask of these entities, it has been revealed that activities of these units i.e. manufacture, clearance etc. has to be clubbed together supported by the decision of Hon'ble Supreme Court in the case of Calcutta Chromotype Ltd. vs. C.C.E., Calcutta [1998 (3) TMI 138 - SUPREME COURT OF INDIA].
Regarding the submission that M/s Arun Chemicals had got no manufacturing activity, it may be mentioned that both M/s Foamsil Chemicals and M/s Arun Chemicals have been actively involved in the operations of wrongly availing exemption under Notification No.175/86-CE by -artificial fragmentation when there was no distinction in management of the firms’. Therefore, M/s Arun Chemicals (who is one of the appellants) deserves to be penalized under Rule 9(2) and 173Q of Central Excise Rules. We are giving no specific findings on M/s Foamsil Chemicals as they are not the appellant here.
It is clear that noticee appellants M/s Atlantic Chemicals played a major role in the manufacturing of the item RBA. Many of the machinery items and facilities for manufacturing are available only with M/s Atlantic Chemicals. Therefore, after clubbing of clearances of the subject three units, liabilities for payment of duty of Central Excise is hereby fixed on M/s Atlantic Chemicals. Consequently, the appellant M/s Atlantic Chemicals is to pay total duty of Central Excise of ₹ 71,06,066/- (i.e. ₹ 38,45,363/- + ₹ 31,39,343/- + ₹ 1,21,360/-) for the RBA manufactured and cleared during 1989-90 to 1993-94. In this regard, corresponding penalty of ₹ 70,20,000/- is also imposed on M/s Atlantic Chemicals under Rule 2(2) and 173Q of C.Excise Rules. Further M/s Arun Chemicals have been involved in continuing this operation of wrongly claiming exemption Notification No.175/86-CE ; therefore, the penalty of ₹ 1,20,000/- imposed on them is hereby sustained.
Demand and imposition of penalties - RBA manufactured and not accounted for - removed clandestinely in the guise of soda bicarbonate - Held that:- the retractions and modifications do not matter when overall evidences conclusively prove that appellants in fact cleared their product RBA in the guise of soda bi carb thus evading central excise duty. It has also come on record that soda bi carbonate cannot be technically used by the manufacturers concerned, who are using RBA as one of the raw materials for their products in Kerala. In other words, soda bi carb is not the substitute for the use of RBA in the respective rubber or other industries. In this regard, we entirely agree with the findings given by the Commissioner (Adjudication) in the impugned order.
It also appears from the record that “the RBA cleared in the guise of Soda bi carb by Atlantic Chemicals and Arun Chemicals, were received for further disposal by the Ceyenar Chemicals, India Rubber & Chemicals and Lotus Chemicals. It is evident that Ceyenar Chemicals, Inda Rubber & Chemicals and Lotus Chemicals had sold the said goods to various hawai rubber sheets manufacturers and also collected the differential amount between the price of such supplied RBA and price of Soda bi Carb and arranged then remittance to Atlantic Chemicals and Sh. J.S. Jain. In their defence submissions dated 9.1.95, India Rubber & Chemicals, Ceyenar Chemicals & Lotus Chemicals have denied the allegations and contested the proposed penalty in the SCN. However, these submissions are not supported by any evidence. On the other hand, there is overwhelming evidence indicating the receipt and disposal of RBA transported under the garb of Soda bi Carb as discussed above. It is, therefore, held that they have been concerned in the receipt and disposal of the said offending goods and hence liable to penalty under Rule 209A of the CER”.
Penalties imposed in the impugned order on M/s Atlantic Chemicals (of ₹ 29 lakhs) and on M/s Arun Chemicals (of ₹ 6 lakhs) are modified and we instead impose the penalty of ₹ 35,00,000/- (Rupees thirty five lakhs only) on M/s Atlantic Chemicals only in this regard under Rule 9(2) and Rule 173Q of the Central Excise Rules. Further, it is to be noted that M/s Arun Chemicals along with M/s Atlantic Chemicals and others has been actively involved in the clearance of RBA in the guise ofsoda bi carb and therefore, deserve imposition of penalties. Consequently, penalty of ₹ 6 lakhs imposed on M/s Arun Chemicals by the impugned order under Rule 9(2) and Rule 173Q of Central Excise Rules is hereby sustained.
Demand and imposition of penalties - extra production of RBA (based on the test reports) - not accounted for in the production records and was removed clandestinely without payment of duty - Held that:- change of extra production is based solely on the ‘test reports’ and the Revenue has not been able to give any other corroboratory evidence to support this charge of extra production against the respective assesees. Further, when M/s Arun Chemicals do not have required manufacturing facility available with them there cannot be any production of RBA on record by them. Moreover, unless there are sufficient corroboratory evidences on records to support this charge of extra production of RBA (based on the test reports), we are of the considered view that there would be no sufficient justification to sustain the charge of extra-production of RBA (based on mere test reports), where the Revenue claims that central excise duty was not paid by the respective noticees/appellants. In other words, when we do not find any corroborative evidence(s) to sustain the charge of extra unaccountable production of RBA (based on test report), we have no option but to hold that this charge of unaccounted production of RBA (based on sample test reports) by the noticees namely, Atlantic Chemicals, M/s Foamsil Chemicals and M/s Arun Chemicals remain unsustainable and hereby dropped. Consequently, the penalties imposed on the respective noticees are also not sustainable and are hereby dropped.
Imposition of penalties - Held that:- we are of the considered view that there is no reason to interfere with the above penalties. The impugned order has rightly imposed these penalties on the respective noticees appellants for the reasons mentioned in the impugned order. - Appeal disposed of
-
2016 (9) TMI 1056
Demand - differential duty - misdeclaration of MRP on gas stoves - stock of goods of the relevant period i.e. 1998-99 has been seized from anywhere showing MRP at higher level than that was declared by the noticee - evidence of sale of the excisable goods to consumers at prices higher than declared to the Department - statements of the authorized signatory Shri Sandeep Jain taken.
It may mention that gas stoves fall under Chapter sub-heading 7221.10 of the Schedule to the CETA, 1985. The law requires that Maximum Retail Price has to be declared on the packages of subject goods and correct duty payment is to be accordingly made. But in the instant case, two sets of stamps were kept by the appellant. The plea taken by the appellant is indeed vague. The background of the matter is that the appellant has been charged for evasion of duty by violating law, that specifically relate to the payment of duty on the MRP value of the excisable goods which has been admittedly violated in the statements recorded under statutory provisions. In such background, the cartons and stamps found are critical piece of evidence for the detected evasion and that support charges against the appellant. The MRP of the product on cartons was enough and does not require presence of gas stove in the carton. Gas stove in the carton is sufficient for the customer to know the MRP. Therefore, we find no reason to interfere with the impugned order. The same is sustained. - Decided against the appellant
-
2016 (9) TMI 1055
100% EOU - Excisability - cut flowers - demand - cut flowers cleared to DTA without informing to the department, without taking permission from the Development Commissioner and without discharging duty liabilities - Held that:- it is found that the issue and methodology of charging duty on articles allowed to be cleared inter alia from a EOU, into DTA is now been said to rest with effect from 18.05.2001 by way of amendment in Notification No. 126/94-Cus. However it is seen that the period of dispute in the present appeal is from 1997-98 to 2001-02 during which period the unit made DTA clearances of cut flowers and on which the order in original had inter alia confirmed demand, which on appeal was set aside by the Commissioner (Appeals). Therefore, prior to the amendment with effect from 18.05.2001 to Notification No. 126/94 dated 03.06.1994 there cannot be any duty charged for the said DTA clearances of cut flowers for the reason that flowers are not excisable under the Central Excise Tariff supported by various case laws.
For the period of dispute, after 18.05.2001, in the present case on such clearances of cut flowers customs duty will be liable to be paid, equal in amount to that leviable on the inputs, if any, that have gone into the production or packaging of such flowers. The matter is therefore remanded to the original adjudicating authority to re-work the duty liability in case any inputs obtained by assessee as per the notification. - Appeal allowed by way of remand
-
2016 (9) TMI 1054
Refund claim - out of the refund of approximately ₹ 91.99 lakhs,Commissioner (Appeals) allowed the refund claim of ₹ 75 lakhs - goods were assessed provisionally - duty paid under protest - unjust enrichment has not been properly satisfied by the appellant-assessee - Held that:- this has no merits inasmuch that there is no dispute that the clearances affected by the appellant-assessee had been under provisional assessment as per Rule 9B of the erstwhile Central Excise Rules, 1944. Under the said Rule, an assessee can seek provisional assessment and on finalization, either excess duty paid by him has to be refunded or short payment has to be paid by him to the Government. The factor of satisfying that unjust enrichment does not arise on the finalization of the provisional assessment was brought into Rule 9B in the year 1999. It is undisputed that the refund claims were filed by the appellant in 1991. The law is now settled that the provisions of Rule 9B before the amendment of bringing the question of unjust enrichment cannot be applied for rejecting the refund claims arising out of provisional assessment. On this ground, we hold that the Revenue's appeal is devoid of merits and is rejected.
Reversal of Modvat credit - inputs used in manufacture as intermediate products were exempted from payment of duty - Held that:- the appellant-assessee had used this credit for discharging the duty liability on the intermediate products which were held subsequently as non-excisable/ non-dutiable but further consumed in manufacture of final product "chopped strand mat" which is excisable. Therefore, having paid the duty and provisional assessment being finalized in their favour, we hold that the impugned order to the extent challenged by the appellant-assessee is liable to be set aside. - Decided against the Revenue
-
2016 (9) TMI 1053
Imposition of penalty - inadmissible availment/utilization of Cenvat credit in the name of Baddi unit - documents issued by the head office and Baddi branch as distributor of services - Baddi was a tax free zone and therefore, goods manufactured by the assessee in their Baddi unit were exempted from payment of duty - appellant paid inadmissible credit voluntarily - Held that:- the assessee had deposited the amount only when based on specific information , the Department caught them. Had there being voluntary payment on the appellant's part, without any action on the part of the Department, they might have deposited the said amount earlier. It may mention that the assessee had already accepted their guilt by depositing the excise duty. The case is not fit for reduction of penalty to any extent. In the instant case, the ‘surrender’ is not voluntary and levy of penalty is justified as per the ratio laid down by Hon’ble Supreme Court in the case of UOI vs. Dharmendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT]. - Decided against the appellant
-
2016 (9) TMI 1052
Invokation of extended period of limitation - Imposition of penalty - Cenvat credit disallowed on goods, namely angles, plates, channels and joists - no documentary evidence that goods used as inputs or capital goods for manufacture of welding electrodes - period June, 2006 to March, 2007 - appellant is in appeal on the ground that in view of the finding of ld. Commissioner (Appeals) that there is no malafide and/or contumacious conduct on the part of the appellant, extended period of limitation is also not available to revenue as the whole demand relate to the period beyond one year from the date of show cause notice being 27.1.2009.
Held that:- I am satisfied that the extended period of limitation is not invokable in the facts and circumstances of the case. Accordingly I hold that the Show Cause Notice is bad and the impugned order is set aside to the extent it have confirmed the disallowance of Cenvat credit for ₹ 2,30,256/-. - Decided in favour of appellant with consequential benefits
-
2016 (9) TMI 1051
Invokation of extended period of limitation - Cenvat credit - appellant purchased input-Scrap i.e. SS Scraps from a first stage dealer namely, Khmeshwar Enterprises who was involved in passing fraudulent credit by trading in excisable goods namely Metal Scrap - seeking cross examination of witness of the Revenue - appellant contended that they are not aware, if Khameshwar Enterprises have supplied them some other scrap or non-duty paid scrap and passed on illegitimate credit - suo motu, reversal of duty with interest by the appellant.
Held that:- it is found that the appellant has admittedly paid the duty on the inputs in question by cheque. Further, no case of collusion is made out against the appellant. I further take notice of the fact that the case of Revenue is based on the statements of the said Rakesh Agarwal of Khameshwar Enterprise & others, and Revenue have failed to offer its witness for cross-examination in spite of prayer having been made by the appellant. This has resulted into miscarriage of justice for not giving any reasonable opportunity of hearing. Further, in view of the findings of the Ld. Commissioner (Appeals), we find that the appellant seems to have received some scrap along with the duty paying document, also establishes the absence of collusion and or mala fide on the part of the appellant. I also take a notice of the fact that the appellant have, suo motu, reversed the Cenvat credit under dispute along with the interest prior to the enquiry initiated against them by the Revenue and issuing the show cause notice. Therefore, I hold that no case of contumacious conduct or fraud, is made out against the appellant. Hence, the penalty imposed under Rule 15 of CCR read with Section 11 AC of the Act is set aside. Also, the appellant will not be entitled to take re-credit of the amount reversed by them, suo motu. - Decided partly in favour of appellant
-
2016 (9) TMI 1022
Condonation of delay - 117 days - because of financial constraint since the company was unable to deposit the 10% requisite amount, there is delay in preferring the appeal - Held that:- it is by now well settled that the condonation of delay though is required to be sufficiently explained but at the same time, if the Court finds that there is substantial case to be considered in the appeal, the Court may also examine as to whether the delay could be condoned by imposing suitable costs or not. It is true that, the delay may operate as bar in pursuing the proceedings but, to what extent the discretion should be exercised would vary from facts to facts. Financial inability cannot be a ground which need not be considered at the time of condonation of delay. On the contrary, financial inability can be one of the valid grounds for accepting the contention that the appellant was prevented by sufficient reasons in not preferring the appeal. We do not want to express any view on the merits of the appeal but it suffices to observe that it was the case to be considered in the appeal. It may be that in a given case, Court may decline to exercise discretion for condoning the delay, if, during the period of delay, the rights of the parties are substantially altered and/or irreversible situation is created but we do not find any of the requirements are satisfied in the present case.
The Tribunal ought to have exercised the discretion for condonation of delay. Further, declining the exercise of discretion for condonation of delay may result into grave injustice to the appellant and appellant would be deprived of the case to be considered on merits, more particularly, when no prejudice is going to be cause to the respondent-Department, since on the demand, the interest if ultimately is maintained, it is to follow. Under these circumstances, we find that the appeal deserves to be allowed. Delay deserves to be condoned and the Tribunal should be directed to decide the appeal on merits. Therefore, the impugned order of the Tribunal is set aside with the observation that the delay in preferring the appeal shall stand condoned on condition that the appellant pays a cost of ₹ 10,000/- to the respondent within a period of four weeks from today. - Decided in favour of appellant
-
2016 (9) TMI 1021
100% EOU - Whether the CESTAT has committed substantial error of law in deciding the case of appellant without production of documents/evidence, which are already seized and in the custody of the respondent authority. Also whether CESTAT has committed substantial error of law in casting the burden of proof on the appellant where the documents/evidence, which are already seized and in the custody of the respondent authority - appellant exported goods under the cover of six ARE-1s during the period from 13.2.2002 to 17.3.2003 but failed to produce proof of export in respect of 2 ARE-1s, both dated 29.1.2003, involving central excise duty -
Held that:- the Tribunal, after affording an opportunity of hearing to the parties, has noted that by an order, the matter was remanded to the adjudicating authority to consider the question of eligibility of the appellant to the benefit of Notification No. 125/84 CE dated 20.5.1984. That before the Tribunal the appellant had submitted that though they had prepared the said two ARE-1s, the same were subsequently cancelled, but there was no corresponding entry in their export register. The Tribunal with reference to the letter dated 28.4.2003 to which reference has been made for the appellant, found that the Superintendent of Customs detained some register for verification and that the matter was fixed for personal hearing before the adjudicating authority on four occasions. The Tribunal further found that there was no evidence to the effect that the appellant had approached the Superintendent of Customs for release of the goods which were detained in 2003, nor was the seizure memorandum produced by the appellant.
The Tribunal took note of the fact that it had remanded the matter twice and upon appreciating the evidence on record, found that there was no dispute on facts that the appellant had cleared the goods under cover of ARE-1s without payment of duty and that the same was not recorded in the export register. That, the appellant failed to provide any evidence that the two ARE-1s were cancelled and also found that the plea of seizure of the documents is without any basis. It is in these circumstances that the Tribunal, upon appreciation of the evidence on record, has not accepted the case of the appellant that there was seizure of documents and that there was any failure on the part of the adjudicating authority to furnish such documents to the appellant. Therefore, it is not possible to state that the conclusion arrived at by the Tribunal is, in any manner, contrary to the material on record. The impugned order passed by the Tribunal does not give rise to any question of law, much less, a substantial question of law, warranting interference. - Decided against the appellant
-
2016 (9) TMI 1020
Recovery of Cenvat credit - inputs and inputs contained in semi-finished goods - incident of fire took place in factory - destruction of plants and machinery, raw materials, stock of Work in Progress (WIP) goods and finished goods - Held that:- as far as the CENVAT Credit on inputs lying in stock, as such, destroyed in fire, it is crystal clear that the same had not been used in or in relation to the manufacture of final product in their factory; thus the criterion of use, the basis on which the CENVAT Credit on inputs contained in WIP goods, has been allowed in the aforesaid cases, is undoubtedly not fulfilled. Thus, the credit involved on the inputs lying in stock and destroyed in the fire before being put to use could not be allowed to the Appellant and the same is required to be paid back/reversed.
Period of limitation - Demand pertaining to inputs contained in WIP - Held that:- the demand is not barred by limitation, in as much as even though an incident of fire took place on 07.12.2005, the Department was not categorically informed about the extent of damage of the inputs on which CENVAT Credit availed, and as such lying in stock destroyed in fire. It is not out of place to assume that the Appellant had informed the extent of damage of finished goods on 07th April 2006 when they filed remission application of the duty involved on the finished goods. The details of inputs destroyed in fire were furnished in May 2006. Therefore, the ld.Commissioner is right in considering that the demand is within the normal period of limitation of one year prescribed under sec. 11A being issued in Feb.2007.
Demand of interest - amount paid by the appellant - Held that:- it is found that the decision relied upon by the appellant was rendered relying upon the Division Bench judgment of the Tribunal in the case of Fleet Industries Vs CCE [2008 (8) TMI 317 - CESTAT, AHMEDABAD], in observing that Section 11AB would apply only to the cases of non-levy or short-levy of excise duty by non-payment of duty by the due date and not applicable to the inputs destroyed. We find that the said reasoning of the Tribunal did not find support from Hon'ble Gujarat High Court in the case of CCE Vs Fleet Industries [2010 (12) TMI 420 - GUJARAT HIGH COURT]. Hence, appropriate interest is payable on the credit amount reversed by the appellant.
Imposition of penalty - Rule 15(1) of Cenvat Credit Rules, 2004 - Held that:- we are of the view that the inputs lying in stock were destroyed in fire and the CENVAT credit involved, on such destruction, was required to be reversed since it was not used in or in relation to the manufacture of finished goods, the purpose for which it was procured and credit availed. It is observed that though the fire took place on 07.12.2005, the Preventive Officers during their visit on 09.03.2006 noticed that the appellants had not reversed the CENVAT credit. It is also observed that the appellants had filed remission application only on 07.04.2006. In view of the same, penalty is imposable under Rule 15(1) of the Cenvat Credit Rules, 2004 for contravention of any of the provisions of the said rules which invites liability to penalty under the provisions of the said Rule. Therefore, we find that the penalty is rightly imposed by the Commissioner (Appeals) in the impugned order under the said rule. However, we find that the penalty of ₹ 10 Lakh imposed by him is excessive and therefore, is reduced to ₹ 3,00,000/- (Rupees three lakhs). - Appeal disposed of
........
|
