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Central Excise - Case Laws
Showing 121 to 140 of 338 Records
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2017 (7) TMI 717 - MADRAS HIGH COURT
Maintainability of Summon order of petitioner - Section 108 of the Customs Act, 1962 - whether a Writ Court can injunct or quash a summon? - Held that: - similar issue decided by the Hon'ble Supreme Court in the case of Commissioner of Customs, Calcutta, vs. MM Exports, [2007 (3) TMI 265 - SUPREME COURT OF INDIA], wherein, it was held that High Court should not interfere at the stage when the department issues summons except in exceptional cases and it is always open to the personal summon to raise all contentions appearing before the department in person or through authorised representative. Therefore, by applying the challenge to the summon has to necessarily fail.
The language of the sub-section is very clear that if the Officer directs the petitioner to appear in person, then he is bound to appear in person, or if he is given an option to appear through authorised agent, he can appear through authorised agent. That alone would be a proper interpretation of sub-section (3) of Section 108.
Appeal dismissed being not maintainable.
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2017 (7) TMI 716 - CESTAT AHMEDABAD
CENVAT credit - input services - whether the appellants are eligible to Cenvat credit of the service tax paid of input services claimed to have been used in or in relation to the manufacture of finished goods at their carton division? - Held that: - the flexible division where their head office also situated was undisputedly destroyed in fire in the year 2005. Therefore, all their manufacturing activities had been shifted to their carton division and accordingly the appellant had availed credit of the services received in the carton division between the periods October 2007 to December 2008 - The appellant had produced all the relevant record/ documents relating to the use of input services with the chartered accountant and got it verified. Thus, in absence of any contrary evidence, I do not find any reason not to accept that input services has been used and utilized in their carton division after destruction of the flexible division in 2005, when there has been no other manufacturing unit of the appellant - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 715 - CESTAT KOLKATA
Manufacture - dilution and addition of preservatives, with branding of the product - Held that: - there must be a transformation, a new and different article must emerge having a distinctive name, character or use - Applying the principle to the facts of the present case, we note that different tests conducted by the Revenue clearly indicated that the raw material as well as the impugned goods are having same chemical characters. This is not disputed - we are not able to discern any substantial point or evidence so as to interfere with the said finding of the original authority - appeal dismissed - decided against Revenue.
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2017 (7) TMI 714 - CESTAT KOLKATA
Valuation - clearance of HR Side Slits to two of their other units - captive consumption or not - Rule 8 of Central Excise Valuation Rules, 2000 - Held that: - Rule 8 of the Valuation Rules stipulates when excisable goods are not sold by the assessee but are used for consumption by him or for manufacture of other articles - In the present case it is not a case of the Revenue that all the goods are captively consumed by the appellants. No such findings have been recorded. Clearance on sales basis to the other units of the appellants cannot be considered as captive consumption. There is no factual support for such assumption - availability independent sales to buyers and sale transaction on similar value to their own units. Rule 8 has no application in this case - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 713 - CESTAT NEW DELHI
CENVAT credit - inputs used in the manufacture of Dry Battery Cells - waste batteries - Rule 6 of CCR - Held that: - Sub-rule (2) of Rule 6 mandates that where a manufacturer manufactures both dutiable and exempted goods and used common input for manufacture of such two types of goods, then he has to maintain separate records and cenvat credit in respect of inputs used in the manufacture of exempted goods should not be availed as cenvat credit.
In the present case, Since some quantities of batteries (less than 1%) are not capable of being sold, being declared as waste, as a result of quality control test, the same were dumped inside the factory. It cannot be said that the waste batteries are exempted goods inasmuch as the same are neither chargeable to nil rate of duty nor are exempted in terms of the notification issued by the Central Government under Section 5 of the Central Excise Act, 1944. Since the waste batteries are not exempted from payment of duty, the embargo created in Rule 6 of the said rules will not be applicable for payment of amount/ reversal of cenvat credit in the generation of the waste batteries.
Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 712 - CESTAT NEW DELHI
Waste and paring used for packing - Taxability - Held that: - The only ground mentioned is that the said scrap and paring is used as a cushioning material in the truck for safety of the final product. As such the said cushioning material are to be considered as part of cost of transportation and to be treated as revenue expenditure. The value of final product does not include such waste of paper used for packing.
When waste and scrap of paper is used, in whichever manner, for safe transport and delivery of the final product and the final product suffers duty on FOR destination basis, we find no reason to treat the value of waste and scrap separately for duty purpose by denying the exemption under N/N. 67/1995-CE.
Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 711 - CESTAT MUMBAI
SSI exemption - use of Brand Name of others - The case of the department is that the appellant is using brand name "Seal Jet" which belongs to foreign company M/s. Economos therefore the appellant is not entitle for the SSI exemption - Held that: - the goods manufactured by the appellant i.e. 'O' ring and Seals are sold duly packed in polythene pack which bear the logo "Seal Jet" in a particular form, therefore it is very clear that goods manufactured and sold by the appellant bears the brand name of "Seal Jet" Merely because the product itself does not bear the name of "Seal Jet" does not mean the product is not branded. In case of packaged goods the brand is always affixed on the packages and not on the product. We are of the clear view that goods cleared by the appellant is branded goods under the brand name of "Seal Jet".
The fact remains that "Seal Jet" brand was affixed on the machine supplied by Economos, Austria. This is sufficient to establish that the "Seal Jet" brand belong to Economos, Austria therefore various correspondence through which Economos, Austria denies the ownership of the brand will not make any difference to the fact that brand name "Seal Jet" belongs to the Economos, Austria. At the most it can be said that Economos, Austria have not registered the name "Seal Jet" but that does not make any difference, because notification prescribed that in order to avail exemption goods should not bear the brand name of another person whether it is registered or otherwise therefore in the present case appellant have used "Seal Jet" brand which belongs to Economos, Austria.
Time limitation - Held that: - matter was contentious and issue was decided by the larger bench - there is no suppression of fact on the part of the appellants - therefore extended period of limitation will not apply.
Penalties - Held that: - penalties imposed for the normal period shall also not be imposable for the reason that the appellant have entertained bonafide belief that in the fact of the case they are eligible for SSI exemption and accordingly there is no malafide intention - penalties for the demand commensurate to duty for normal period of the limitation set aside.
Appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 710 - CESTAT CHENNAI
CENVAT credit - Motor Vehicle Insurance - Vehicle Maintenance Charges - Clearing and Forwarding Services - Port Services - Revenue was of the view that such services cannot be considered to be cenvatable - Held that: - insurance of vehicles and their maintenance has to be treated as input services in terms of Rule 2(l) of Cenvat Credit Rules, 2004, in as much as, they are related to the manufacturing activities of the assessee - the credit availed by the assessee prior to 01.04.2011, which is the period involved in two of the appeals, is admissible to the appellant.
The appellants are not disputing their liability to reverse back the credit availed post-04.04.2011, I uphold the denial of the same. As regards, interest, though the appellant have taken a stand that the said credit was not utilized by them but the said fact is required to be verified by the lower authorities. If the credit has not been utilized and remained only as a paper entry in their Cenvat Credit Account, the appellant would not be saddled with any interest liability.
Penalty - Held that: - there is no malafide on the part of the assessee so as to invite any penal action against them - penalty set aside.
Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 709 - CESTAT CHENNAI
Time limitation - CENVAT credit - denial of the proportionate Cenvat credit availed in respect of Furnace Oil used for generation of electricity, a part of which was transmitted to Tamil Nadu Electricity Board (TNEB) - whether notice issued in 2005 covering the period from April, 2000 to June, 2001 is barred by limitation or not? - Held that: - The criteria for invocation of the longer period of limitation is suppression, misstatement etc., with an intent to evade payment of duty - no malafide intention can be attributed to the assessee, so as to invoke the longer period of limitation. Accordingly, the demand is barred by limitation and the denial of credit in respect of Furnace Oil along with setting aside of interest and penalty set aside.
Penalty - Damaged inputs - Waste and Scrap and Jumbo Baggase - demand - Held that: - as the entire credit was availed by reflecting the same in statutory records in terms of the Central Excise provisions. As such, it stands contended that there was no suppression with any malafide on their part so as to invite any penal action.
Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 708 - CESTAT CHENNAI
Clandestine removal - Goods found in excess - 818 nos, of Ingots were not entered in the RG-1 register - Held that: - the appellants have not advanced any justifiable arguments in respect of the excess 818 nos. of Ingots and have not advanced any plausible explanation for non-entry of the same in RG-1 register. They have not been able to establish as to whether the raw material used in the manufacture of such huge quantity of Ingots was entered in the Raw Material account, thus making it impracticable for them to clear the said goods without payment of duty - appeal dismissed - decided against appellant.
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2017 (7) TMI 680 - CESTAT CHENNAI
CENVAT credit - denial on the ground that appellant have not maintained separate accounts for the common input services used for generation of electricity in their co-generation plant - Held that: - the appellant is eligible to avail credit on the input services pertaining to electricity which is captively consumed. We hold that appellants are not eligible for credit on input services used for electricity which is sold outside the factory. For determining the quantum of electricity that is sold outside factory as well as determining the credit which is not eligible, we remand the matter to the adjudicating authority to recompute the same - appeal allowed in part and part matter on remand.
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2017 (7) TMI 679 - CESTAT HYDERABAD
CENVAT credit - allegation of fraudulent availment - said amount with interest reversed on being pointed out - penalty - Held that: - the allegations in the show-cause notice are general in nature, like, that the appellants had availed the CENVAT credit fraudulently with intention to evade duty and there are no specific allegations as required under the provisions of Section 11AC or Rule 15(2) of the CENVAT Credit Rules, 2004. In the absence of any specific allegations, we hold that the issue seems to be covered by the judgment of the apex court in the case of Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA], where it was held that the assessees had made payment of the demands simply in order to buy peace and to avoid any litigation. In those circumstances the imposition of penalty was wholly unjust - duty with interest upheld - penalty set aside.
CENVAT credit - capital goods - MS channels, beams, TMT bars, CTD bars, etc. - Held that: - structural items such as MS channels, beams, TMT bars, CTD bars, etc. are held to be eligible for availment of CENVAT credit despite being used for fabrication of support structures for various capital goods. In the case in hand, it is on record that the respondent in this case had used these structural items for fabrication of capital goods which are put to use in the factory premises - reliance placed in the case of Singhal Enterprises Pvt. Ltd. Vs. CC&CE, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit - credit allowed.
CENVAT credit - input services - denial on the ground that these input services were utilised for construction of a factory which is immovable property and is not liable to Central Excise duty or any output services - Held that: - the said input services were received by the respondent during the period September 2008 to June 2009. During the relevant period, Rule 2(l) of the CENVAT Credit Rules, 2004 (before its amendment on 01/04/2011) specifically allows the CENVAT credit of the service tax paid on the input services which are used for setting up / renovation / modernisation of factory premises by a manufacturer - similar issue decided in the case of Liugong Indian Pvt. Ltd. Vs. CCE&ST, Indore [2014 (3) TMI 984 - CESTAT NEW DELHI], where it was held that service tax credit on these items can be availed - the services, in question, used for setting up of factory have to be treated as input service and would be eligible for Cenvat credit, as the factory has been setup for manufacture of final products which are liable to Central Excise duty. Therefore denial of Cenvat credit, in question, is contrary to the provisions of Rule 2(l) of Cenvat Credit Rules, 2004.
Appeal allowed - decided in favor of appellant.
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2017 (7) TMI 678 - CESTAT NEW DELHI
Benefit of N/N. 13/2009-CE (NT) dated 03/06/2009 - exemption to zinc Sulphate manufactured and cleared by them during the period January 2007 to 08/10/2007 - Held that: - on the legal principles examined by the Original Authority, the respondents are rightly eligible for the exemption under the said notification. The credit attributable to the inputs used for zinc Sulphate have been reversed and as verified by the Jurisdictional officer, the Original Authority gave his finding - exemption allowed.
Quantification of proportionate credit - Held that: - It is not the date of receipt of inputs, which is relevant to calculate the proportionate credit. The credits, irrespective of the rate of receipt of inputs, attributable to inputs used in the manufacture of zinc Sulphate are to be reversed, in proportion. This aspect may be re-verified and confirmed by the jurisdictional authorities - matter on remand.
Appeal dismissed - part matter on remand - decided against Revenue.
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2017 (7) TMI 677 - CESTAT NEW DELHI
CENVAT credit - exempted goods - by-product, silver - The Revenue entertained a view that silver being an exempted product, the Cenvat credit attributable to inputs and input services used in the manufacture of such silver should be reversed in terms of provisions of Rule 57AD/Rule 6, as applicable during the relevant time - Held that: - It is apparent that the legal provisions applicable to the facts of the present case are clear to the effect that Cenvat credit attributable to inputs used in or in relation to manufacture of exempted goods is to be reversed. The relevant point to note here is that the Revenue itself categorically admitted in the appeal that it is not a case here, where common inputs are used both for the manufacture of dutiable and exempted goods in two separate processes. Segregation of quantity of inputs which is attributable to dutiable and exempted goods in an integrated process is not possible. The Revenue further admitted that quantification of proportionate quantity of input used in exempted goods is not possible in the case like the present one - We find no legal basis for the assertion made by the Revenue to arrive at the proportion of Cenvat credit to be reversed, should be based on value of exempted products.
In the present case, all the inputs have been put to intended use and it is not the case that some portion of input is not put into use in the manufacture of zinc and lead. This position has been admitted by the Revenue also. If such is the case there can be no input which is solely attributable to the manufacture of small quantity of by-product namely, silver. The said silver is extracted as a by-product by the respondent whose intended/main manufacturing process is aimed at manufacture of non-ferrous metal like zinc and lead. The respondent also obtain various other by-products like sulphuric acid etc. In fact with reference to sulphuric acid emerging as a by-product, it was held in the respondent’s own case that there is no need for reversal of Cenvat credit on proportionate basis in Hindustan Zinc Limited Vs. CCE, Jaipur – II [2004 (1) TMI 283 - CESTAT, NEW DELHI].
The respondents fulfilled the condition as stipulated in the Finance Act, 2010 by reversing proportionate credit in 2002-2003 itself and by paying interest on the same. We also note that the Commissioner was to verify the correctness of amount paid within a period of two months from the date of receipt of application and in case the amount so paid is less than the amount payable, he shall call upon the applicant to pay the differential amount alongwith interest which shall be paid within 10 days. Considering the legal provision, as mentioned in Section 70 of the Finance Act, 2010 and the facts of the present case, we find no infirmity in the finding recorded by the Original Authority.
Appeal dismissed - decided against Revenue.
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2017 (7) TMI 676 - CESTAT MUMBAI
CENVAT credit - imported copper ingots/re-melted wire bars - The case of the department is that appellant have availed Cenvat credit on imported copper ingots/re-melted wire bars without physical receipt of the same - natural justice - Held that: - The entire case was made against appellant on the basis of various statements recorded from third persons i.e. seller, transporter, broker etc. If this is so, then it is necessary to allow cross examination of these witnesses to the appellant - As per Section 9(D) of Central Excise Act, 1944 it is provided that even if assessee does not ask for cross examination, it is obligatory on the part of the adjudicating authority to cross examination the witnesses whose statements being relied upon that means for relying on any statements it is necessary that the adjudicating authority first cross examine the persons whose statements are being relied upon for deciding the case - taking into consideration overall circumstances of the present case it is necessary to allow cross examination of the witnesses as requested for by the appellant - appeal allowed by way of remand.
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2017 (7) TMI 675 - CESTAT MUMBAI
Refund of accumulated CENVAT credit - denial of refund relying on the decision in the case of COMMISSIONER OF C. EX., KOLKATA-IV Versus BHUSAN LTD. [2008 (6) TMI 194 - CESTAT KOLKATA], where it was held that even if claim is filed within the time-limit is also required to be further examined with reference to N/N. 11 /02-C.E - Held that: - the availment of any benefit under a Foreign Trade Policy scheme would not in any way impact upon the entitlement for refund under rule 5 of CENVAT Credit Rules, 2004 - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 674 - CESTAT NEW DELHI
Classification of goods - dental plate brushes - Deemed manufacture - assessee is emphasizing that the items tooth brushes and inter-dental brushes are in separate category. The tooth brush is available on any grocery shop whereas inter-dental brush is available only at a chemist shop - whether dental plate brushes can be said to be covered under the entry of Sr.No. 97 A of the Third Schedule to the Central Excise Act, 1944? - Held that: - the subject item, inter-dental brush of any kind is also a tooth brush and is used as an item for cleaning teeth. It is true that the item inter-dental brush or dental plate brush is not easily available at any grocery shop; the same is available only at a chemist shop. However, both are tooth brushes and both are covered by the Central Excise Tariff heading no. 96032100. Though it is true that inter-dental brush is specifically not mentioned in the entry 97A of the Third Schedule to Central Excise Act, 1944, Tariff sub-heading 96032100 is mentioned therein. Once Tariff sub-heading 96032100 is mentioned with the description tooth brush, one cannot arrive at the conclusion that inter-dental brush or dental plate brush is not part of that entry or the said description, when dental-plate brush is also a kind of tooth brush. Therefore, it is held that subject item is covered by entry at Sr. No.97A of Third Schedule to C.E. Act, 1944 - demand of excise duty upheld.
Extended period of limitation - Held that: - subject matter is a matter of interpretation of law. Therefore, the demand beyond the normal period is not sustained and for the same reason no penalty is liable to be imposed on the assessee. The duty for the ‘normal period’ only is confirmed along with interest.
The subject matter is remanded for limited purpose to original adjudicating authority, who shall quantify the duty payable for the normal period along with interest payable under section 11 AB Central Excise Act 1944 - appeal allowed in part by way of remand.
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2017 (7) TMI 642 - CESTAT ALLAHABAD
Shortage of goods - Clinker & HDPE Bags - appellant claims that the allegation of clearance/removal of Clinker & HDPE Bags clandestinely is vague and presumptive and not corroborated with any evidence - CENVAT credit - Held that: - there is no allegation in the Show Cause Notice of any clandestine activity on the part of the appellants. The whole Show Cause Notice is based on the apparent shortage found at the time of inspection. Moreover, I find that the valuation of stock have been done basically by way of eye estimation, which is definitely prone to error.
This issue have been repeatedly considered by Hon’ble Allahabad High Court, in the case of UP. STATE CEMENT CORPORATION LTD. Versus UNION OF INDIA [1996 (4) TMI 139 - HIGH COURT OF JUDICATURE AT ALLAHABAD], wherein the Hon’ble High Court have accepted that clinker is an item prone to handling, transportation and manufacturing loss. Hon’ble High Court have further held that such loss is under the category of normal loss requiring no special order of remission from the appropriate authority under Rule 21 of the CER, 2002.
The appellant shall be entitled to take credit, of the Cenvat credit reversed for HDPE Bags. Further, I find that there is no contumacious conduct nor any suppression of facts as is evident on the face of the record. In this view of the matter, I set aside the balance demand of Cenvat credit as confirmed, vide the impugned order under Rule 15 (2) of Cenvat Credit Rules, 2004. I also set aside the penalties imposed, under all the Sections and/or Rules. The appellant shall be entitled to take credit of the balance Cenvat, if any.
Appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 641 - CESTAT ALLAHABAD
Clandestine manufacture - Pan Masala Packing Machine - sealing of machinery without physical removal - Revenue was of the view that the a single packing machine weighs about 200 kg, was having wheels and was required to be physically removed from the factory. As this was not done and the machine(s) was only sealed and removed to a separate room in the factory thus respondent was liable to pay duty on all such machines including the sealed machines, available in the factory - Held that: - it is not disputed that the un-installation and sealing of the machines was in such a manner that it rendered the machines non-operative. It was the decision of the proper officer under the Rules to decide as to what was feasible in the facts and circumstances at given time or specific hour. On being satisfied the proper officer did not remove the machine from the factory and instead removed them to another room after packing in duly sealed condition. He further took notice of the fact that such machines are not easily movable, need a crane to move the machines - demand set aside - appeal dismissed - decided against Revenue.
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2017 (7) TMI 640 - CALCUTTA HIGH COURT
Charge on properties - section 11 of the Act - order of attachment - Central Excise authorities had various claims against one of its assessees. Such assessee is a borrower of a Bank. The Bank had proceeded under the provisions of the Act of 2002 against its security interest. It had put up the assets belonging to the defaulter/borrower for sale. The first petitioner had participated in such sale. The sale was on as is where is and whatever there is basis as appearing in the sale notice. The first petitioner being successful in the auction sale had purchased such properties from the Bank.
Whether as purchaser of the assets of the assessee can the first petitioner be said to be a person liable to pay the amount defaulted by the assessee? - Held that: - section 11E of the Act of 1944 will apply and will create a first charge on the property of the assessee or the purchaser of such property as the case may be in the event, the same is not contrary to the provisions of the Act of 2002. In the present case, the Bank claims first charge over the properties put up for sale. Moreover, as noted about, the entire business was not put up for sale. Only the assets of the assessee were put up for sale.
Central Excise authorities have acted without jurisdiction in proceeding against the petitioners in respect of the defaults committed by the assessee. All proceedings including the orders of attachment initiated by the Central Excise authorities on the basis of default of its assessee against the petitioners are set aside.
Petition allowed - decided in favor of appellant.
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