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Central Excise - Case Laws
Showing 341 to 360 of 411 Records
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2017 (9) TMI 333 - CESTAT NEW DELHI
Clandestine manufacture and removal - MS Ingots - demand on the ground that on the basis of a small quantity of 36.49 MTs of M.S. ingots shown to have been cleared by M/s. Nirmal Inductomelt Pvt. Ltd. to the main appellant and not shown in the accounts of the main appellant and also on the ground that estimated production by the main appellant based on average power consumption, as arrived at in another unit manufacturing M.S. items.
Held that: - the discrepancy in the receipt of raw materials and M.S. ingots was alleged on the basis of purported records maintained by M/s. Nirmal Inductomelt Pvt. Ltd. There is no other corroborative evidence for unaccounted receipt of such materials and use of material in further manufacture by the main appellant - There are many other substantial distinction between the main appellant and SSSRM. Even otherwise, we note that no examination or technical test has been conducted in the main appellant’s unit, to arrive at the correctness of power consumption and also to get additional corroborative evidence with reference to possible unaccounted manufacture and clearance of dutiable items.
Merely on the basis of power consumption of the appellant unit, allegation of unaccounted production of M.S. ingots and its clandestine removal could not be sustainable.
Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 295 - CESTAT CHENNAI
Benefit of N/N. 6/2002-CE dated 1.3.2002 - availing of Low Sulphur Heavy Stock (LSHS) falling under Heading 27.13 of CETA without payment of duty availing the exemption - denial of exemption on the ground that the appellant being a private limited company are not controlled or owned by the TNEB is not eligible for the benefit of exemption, and also on the ground that as lignite is primary fuel for generation of electricity and LSHS was not used as a fuel for generation of electricity, they are not eligible for the exemption - Held that: - The Tribunal has followed the judgment in the case of Neyveli Lignite Corporation [2006 (9) TMI 443 - CESTAT, CHENNAI], in which the said issue has been discussed in detail - In the present case, without such LSHS, the appellant cannot commission or start up the ignition of the furnace. That therefore it is an essential fuel for generation of electricity for the appellant. Therefore, denial of benefit of notification is unjustified - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 292 - CESTAT MUMBAI
Scope of SCN - CENVAT credit - input services - aircraft hiring charges - the legal services obtained from abroad - case of appellant is that the SCN issued to them did not allege that there was no nexus between these services and output service. He argued that the SCN in respect of credit of service tax on aircraft hiring charges was solely based on the definition of input service - The order-in-original as well as the impugned order goes into the lack of nexus while denying the Cenvat Credit on these services - Held that: - the Hon’ble Apex Court in the case of Sun Pharmaceuticals Industries Ltd. [2015 (12) TMI 670 - SUPREME COURT] has held that it is not open to Revenue to go beyond the show-cause notice issued to them.
Revenue cannot go into the issue of nexus between the input service and the output services - Revenue sought to distinguish this decision relying on the fact that in the case of credit, the onus of proving nexus between the input, input service and output service is on the claimant. He however could not point out any allegation regarding lack of nexus between input service and output service.
Since both the lower authorities have travelled beyond the allegations in the notice, the impugned order is set aside - appeal allowed by way of remand to decided afresh.
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2017 (9) TMI 291 - CESTAT MUMBAI
CENVAT credit - welding electrodes used for repair in the factory - Held that: - similar issue decided in the case of SAMRUDDHI CEMENT LTD. Versus COMMISSIONER OF CENTRAL EXCISE, INDORE [2012 (9) TMI 885 - CESTAT NEW DELHI], where the credit on welding electrodes has been allowed - credit allowed.
CENVAT credit - steel items - Held that: - The exact use of the item has not been specified - the matter is remanded to the original adjudicating authority to give a decision after ascertaining the exact use of each item on which credit has been sought.
Appeal allowed in part and part matter on remand.
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2017 (9) TMI 290 - CESTAT MUMBAI
Penalty u/r 25(1)(a) of Central Excise Rules 2002 - default in payment of central excise duty - sub-rule (3A) of Rule 8 - Held that: - The decision of Praweg Conveyors [2016 (8) TMI 238 - CESTAT MUMBAI] has been passed in identical circumstances relying on the decision of the Hon'ble High Court in Indsur Global Ltd. [2014 (12) TMI 585 - GUJARAT HIGH COURT], where it was held that it is not the case of non levy/ short levy, non payment/short payment of duty by suppression or willful mis-statement, fraud and collusion or contravention of any provision of this act or rule made with intent to evade payment of duty, therefore appellant is not liable for penalty under Rule 25 - penalty set aside - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 289 - CESTAT MUMBAI
CENVAT credit - services provided to SEZ - case of appellant is that Rule 6(6)(A) was given a retrospective effect from 10.02.2006 by virtue of Finance Act 2012. He pointed out that the period involved in this case is September 2004 to March 2008 and therefore the period from 10.02.2006 onwards is covered by the retrospective amendment and Rule 6(6)(A) of the CCR - Held that: - While interpreting the fact that Rule 6(6)(i) of Cenvat Credit Rules was amended by way of substitution, it was held that the same can be deemed to have a retrospective effect under certain circumstances. Consequently, it was held that the said sub-rule would be applicable with effect from 10.09.2004 when the Cenvat Credit Rules came into existence. It is however, seen that Rule 6(6)(A) was not introduced by way of substitution but it was a new Rule inserted in the Cenvat Credit Rules, 2004.
There is no basis for extending the benefit of such insertion for period prior to 10.02.2008 - penalty and interest is consequently reduced - appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 283 - MADRAS HIGH COURT
Condonation of delay of 1527 days in filing appeal - The reason for delay is closure of the mill from 11.11.99 and the fact that the staff left the company since salary not paid - Held that: - we find absolutely no sufficient cause, except to state that the delay of 1527 days is bonafide and the staff of the Company had left. Even taking for granted that the Company is closed, it is the duty of the petitioner to see that the appeal is filed in time - No sufficient / bonafide cause is shown for condonation - COD application rejected.
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2017 (9) TMI 277 - CESTAT MUMBAI
Refund of unutilised CENVAT credit - export of goods - denial on the ground that finished goods attracted Nil rate of duty and also on the ground of time limitation - Held that: - even though the finished goods attracted Nil rate of duty the refund in respect of input used in such goods is available under Rule 5 as per the judgment in case of Gujarat Ambuja Exports Ltd [2010 (12) TMI 323 - CESTAT, AHMEDABAD] - Rule 6(6)(5) also provides that where the goods are exported the Cenvat credit is admissible. Therefore even the goods are not dutiable or attracted Nil rate of duty if it is exported, refund under Rule 5 is legally available to the assessee, therefore on this ground rejection of refund claim is not sustainable.
Time limitation - Held that: - filing the refund on quarterly basis is a procedural requirement and facility provided to the assessee that instead of one year appellant can file refund claim on quarterly basis - overall period of limitation for filing refund claim is one year as provided under Section 11B, therefore refund claim which is filed within one year, refund cannot be rejected on the ground that it was not filed on quarterly basis.
Matter remanded to the adjudicating authority to pass a fresh order after verifying the other factual aspect - appeal allowed by way of remand.
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2017 (9) TMI 276 - CESTAT NEW DELHI
Jurisdiction - power of DRI to issue SCN - Held that: - the notice issued by the DGCEI who was not a competent authority as per the ratio laid down in the case of Mangali Impex Ltd. Vs. UOI [2016 (5) TMI 225 - DELHI HIGH COURT] - In this connection, we note that similar issues have been dealt with in various cases by the Tribunal recently. It is held that the matters have to be remanded back to the original authority for a decision - appeal allowed by way of remand.
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2017 (9) TMI 275 - CESTAT CHANDIGARH
SSI exemption - denial on the ground that appellant did not file prescribed declarations - N/N. 9/2003-CE dated 01.03.2003 - Held that: - As there are divergent views of the Members, therefore, the matter is referred to the Hon'ble President to appoint third Member to resolve the issue - matter referred to third member appointed by Hon'ble President.
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2017 (9) TMI 274 - CESTAT NEW DELHI
CENVAT credit - input service - services used in the guest house as well as rehabilitation colony - Held that: - the guest house as well as rehabilitation colony are outside the factory premises and have been constructed only as a welfare measure and these have no nexus with the manufacture, storage or sale of the finished products - credit rightly denied.
CENVAT credit - goods used in erection of 132KV transmission line to bring electricity to the appellant’s project site - Held that: - the benefit of cenvat credit on goods used in the construction of transmission line to bring electricity to the factory has been allowed by the Tribunal in the case of Prism Cement Vs. CCE [2017 (3) TMI 1283 - CESTAT NEW DELHI] - credit allowed.
CENVAT credit - GTA service in respect of goods consigned on FOR basis upto the customer’s premises - Held that: - the same issue was before the Hon’ble High Court of Punjab & Haryana in the case of Ambuja Cements [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT] in which the Hon’ble High Court, after considering the definition of input service in detail, allowed the benefit of such cenvat credit upto the customer’s premises - credit on outward freight allowed.
CENVAT credit - excise duty paid on M.S. pipe, galvanised fabric, tower parts, welding electrodes etc. which were used for maintenance of capital goods - Held that: - parts of capital goods are also entitled to the benefit of cenvat credit - Tribunal has also been consistently allowing the cenvat credit on items such as angles, section etc. which are used in the construction of support structure for capital goods also. The M.S. pipes are used in construction of water supply pipe lines which are essential in the factory for manufacture of goods and as such will be entitled to cenvat credit - credit allowed.
Appeal allowed - decided partly in favor of appellant.
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2017 (9) TMI 273 - CESTAT NEW DELHI
Liability of duty - poly chips–both virgin and non-virgin, manufactured and consumed further by the appellant/assessee in the manufacture of 210d yarn which is exempted - marketability/excisability - whether batch non-virgin poly chips are marketable and chargeable to duty as excisable goods? - Held that: - the batch non-virgin poly chips are emerging due to deliberate manufacturing process by the appellant/assessee. During the course of polymerization of caprolactam the main virgin poly chips are produced which are washed in the hot water resulting in emergence of pure virgin poly chips and wash water. The wash water is put to further process, as already discussed earlier in this order, resulting in the production of batch non-virgin poly chips. Regarding requirement of nitrogen packing we note that such packing will be required when the product is cleared to some distance. In the present case, in an integrated chemical plant, for captive consumption there is apparently no need for such nitrogen packing as the product is stored and dealt with in controlled environment for the required use - Tribunal in J.C.T. Ltd. Vs. CCE, Jallandhar [2004 (4) TMI 359 - CESTAT, NEW DELHI] has held that if the product is captively consumed which does not require any packing nor any precaution is to be taken in respect of those products; this does not mean that the product loses the capacity of being marketed - Admittedly, non-virgin poly chips are in fact marketed and the appellants/assessee themselves indicated that M/s Suncity did market this product and wanted to compare the value of such sale for adopting to their excise valuation. Hence, we note that special packing required for removal of goods safely to the buyer, which is not required for captive consumption itself, cannot determine the marketability of any product - the batch non-virgin poly chips are excisable products.
Benefit of N/N. 111/1995-CE dated 06/09/1995 - Held that: - It is apparent that the entire manufacturing process is aimed at producing main virgin poly chips. The technological necessity in the process results in a waste by-product in the form of wash water. In order to extract the available monomer/oligomer for further use from such wash water separate recovery processes are undertaken by the appellant/assessee. Incidentally, we note that in appellant/assessee’s own case the oligomer were held to be classifiable under Heading 3916 vide final order dated 05/06/1998 - while the Original Authority allowed the said exemption to batch non-virgin poly chips manufactured out of waste chips etc., he did not allow the said exemption to the non-virgin poly chips attributable to recovery process from unreacted monomer and oligomer contained in wash water. On careful consideration of the findings of the Original Authority and the submissions of the appellant/assessee we note that no distinction can be made in extending the said exemption and batch non-virgin poly chips are eligible for the exemption for the period 06/09/1995 onwards.
Benefit of N/N. 47/1994-CE (NT) - Held that: - it is apparent that the entire production of chips by SRF Polymers is of batch non-virgin poly chips only. As such, the assertion of the appellant/assessee that SRF Polymers used only non-virgin poly chips in the export of yarn or twine is correct. We hold that subject to verification of supporting documents the consequential benefit available to the dutiable poly chips used in the manufacture of yarn/twine exported out of India should be considered and allowed by the Jurisdictional Authority - matter on remand.
Valuation - correctness of assessable value for virgin poly chips for the period prior to 01/07/2000 - Held that: - when the appellant/assessee is having certified CAS-4 Standard Cast Data for the periods now in dispute the same should have been adopted by the Original Authority for arriving at the duty liability on virgin poly chips. Incidentally, we also note that in the first round of adjudication the duty demand was based on cost of production.
Excisability/duty liability - wash water cleared by SRF Ltd. to their de-merged to sister unit located adjacent, namely SRF Polymers Ltd. - Held that: - It is apparent that wash water emerges as a technical necessity in the manufacture of nylon polyamide chips. In order to make virgin polyamide chips, it is necessary to wash the main polymerized chips. Admittedly, for manufacture of nylon polymerized chips the required quantity of caprolactam has to be used. It is not the case that for avoiding generation of wash water, lesser quantity of such caprolactam can be used. In other words, the entire quantity of caprolactam used as input in the manufacture of nylon polyamide chips are put to intended use. The unreacted or partially reacted caprolactam of 10% of total quantity is removed by hot wash. This results in emergence of wash water. Since, it contains recoverable monomer as well as oligomer the same is put to further process. We note that considering the process and the technical requirement, wash water cannot be considered as a manufactured product.
Time limitation - Held that: - the Department is aware of the usage of various inputs in the manufacture of exempted yarn. The appellant/assessee relied upon letter dated 30/10/1991 issued by the Jurisdictional Superintendent of Central Excise as well as show cause notices dated 29/09/1993, 02/03/1994, 09/02/1995 and 26/05/1995 regarding disputed Modvat credit for exempted final product. In this situation, we note that the Department was aware of the manufacture of 210d yarn and various inputs used in such manufacture. The findings of the Original Authority that a particular nature of input used in the manufacture of 210d yarn is not known to the Department is not tenable.
Appeal allowed in part and part matter on remand.
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2017 (9) TMI 272 - CESTAT NEW DELHI
CENVAT credit - duty paying invoices - ISD invoices - Held that: - Rule 7 (a) & (b) reveals that there is nothing in the rules against the distribution of such credit to the appellant’s unit upto 31.03.2012 - demand upto 31.03.2012 does not sustain.
The CBEC circular dated 11.07.2004 was issued after introduction of sub rule 7(d) wherein it has been clarified that the distribution for the purpose of rule 7(d) will be done in this ratio in all cases irrespective of whether such common input services were used in all or some of the units. In the light of sub rule 7(d) we are of the view that services consumed wholly in the Vizag unit can also be distributed to the appellant unit subject to observance of restriction imposed in rule 7(d) - demand is to be sustained only pertaining to the period 01.04.2012 to 30.06.2012.
The demand is to be sustained only pertaining to the period 01.04.2012 to 30.06.2012 - The demand prior to 01.04.2012 is set aside and for the period after 01.07.2012 it is required to be verified whether the restriction in rule 7(c) and (d) have been satisfied - appeal allowed by way of remand.
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2017 (9) TMI 271 - CESTAT NEW DELHI
CENVAT credit - consultancy service with reference to laying of pipelines for water supply to the mines - denial on the ground of nexus - Held that: - the issue has been settled in favour of the appellant in several decisions in the appellant’s own case [2017 (5) TMI 1184 - CESTAT NEW DELHI], where it was held that subject input service is having sufficient nexus with the manufacturing process of the appellant and is covered by the definition of ‘input service’ under Rule 2(l) of CCR, 2004 - credit allowed.
CENVAT credit - consultancy service in connection with raising the embankment/ dam - Held that: - There is no dispute that water is an essential input which is used in the mines attached to the factory. The service tax credit availed under dispute, is towards consultancy service in connection with raising the embankment/ dam which is in connection with the procurement of the input, water - credit allowed.
Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 268 - CESTAT NEW DELHI
CENVAT credit - goods used for fabrication of plant and machinery - Held that: - the identical issues have come up before the Tribunal in appellant’s own case M/s Dalmia Cements (Bharat) Ltd. Versus CCE & ST (LTU) , New Delhi [2017 (3) TMI 1084 - CESTAT NEW DELHI], where it was held that the goods fabricated, using such structurals, will have to be considered as parts of the relevant machines. The definition of ‘Capital Goods’ includes, components, spares and accessories of such capital goods. Accordingly, 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 on capital goods - denial on the ground that appellant have not commenced production at the relevant time - Held that: - There is no irregular utilization of credit by the appellant and no such allegation has been made in the show cause notice. Even if the appellant has entered the credit in their books of accounts no utilization is possible without commencement of production. In effect, the credits available on the capital goods will come to be entered as availed and utilized only on production of dutiable final product. We find no justification to deny Cenvat credit on capital goods which, are otherwise legitimately available to the appellant - credit allowed.
CENVAT credit - input services - construction of factory - denial on the ground that construction is with reference to immovable property and accordingly the credit is not available - Held that: - The credits availed by the appellant are with reference to construction of factory. The said activity is covered by the definition of input service during the relevant time. It is also to be noted that the definition of “input service” is very broad and includes those services which are used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products. It is clear that the said service even if used indirectly by the manufacturer in relation to manufacture of final product, the same should be eligible for credit. Apart from this, there is a specific inclusion of services used in relation to setting up of factory. The services availed by the appellants are covered by the definition of input service - Considering the scope of the definition of input service during the relevant time, credit allowed.
Appeal allowed - decided in favor of appellant.
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2017 (9) TMI 267 - CESTAT NEW DELHI
Captive consumption - benefit of N/N. 67/95CE - case of Revenue is that during the process of manufacturing of the finished goods, ‘armoured cable’ or ‘cable at armoured stage’ and sheathed wire were arising which are chargeable to duty and the benefit of captive consumption N/N. 67/95CE is not available as the finished goods were cleared without payment of duty - Held that: - identical issue has come up before the Tribunal in the case of KEI Industries Ltd. and others Vs. CCE, Alwar [2016 (12) TMI 532 - CESTAT NEW DELHI], where it was held that assessee was not liable to pay CE duty on copper wire manufactured and captively used in the manufacture of insulated (power) cables in the factory during the material period - the appellant is entitled for benefit of N/N. 67/1995 ibid for intermediate product emerging during the course of manufacture of final product - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 266 - CESTAT NEW DELHI
Classification of goods - body building for motor vehicles on chassis falling under CETH 8706 - The appellants placed reliance on Note 5 of Chapter 7 which states that building a body on chassis amounts to manufacture of motor vehicle. But the claim of the appellant was not accepted by the department - whether such goods cleared by the appellant are classifiable under Heading 8704 as “motor vehicles for transport of goods” or under Heading 8707 as “bodies for the motor vehicle of Headings 8701 to 8705”? - Held that: - identical issue has come up in assessee’s own case before the Tribunal in M/s. Commercial Engineers and Body Builders Co. Ltd. Vs. CCE & ST, Bhopal [2017 (6) TMI 855 - CESTAT NEW DELHI], where it was held that A plain reading of the chapter note alongwith the relevant tariff headings makes it clear that the product cleared by the appellant after body building activity is a “manufactured” motor vehicle. Considering the nature of motor vehicle, which is for transport of goods, the same has to be classified under Heading 8704 - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 222 - CESTAT CHENNAI
Classification of goods - PP bags & rolls, LD/LLD bags & rolls and HM bags - extended period of limitation - Held that: - It is correct that there was an increase in the duty of the products mentioned in CSH 39.17 and respondent had continued to pay the duty in the earlier rate. But undisputedly, they have paid the differential duty immediately on coming to know of the error. However, the department has chosen to issue a show cause notice invoking the extended period. Further, the issue of classification on the impugned products was under litigation before various forums and therefore being an interpretational issue, the respondents cannot be imputed with the intention to evade payment of duty - demand set aside on the ground of limitation - appeal dismissed - decided against Revenue.
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2017 (9) TMI 221 - CESTAT CHENNAI
MODVAT/CENVAT credit - sale of capital goods on which MODVAT credit availed - Rule 57AB of Central Excise Rules, 1944 - Held that: - When capital goods are removed from the factory, the manufacturer has to pay appropriate duty of excise as if such capital goods have been manufactured in the said factory and such removal shall be made under the cover of an invoice prescribed under Rule 52A. The law in the relevant Explanation does not use the word sale or transfer of capital goods but instead uses the word removal as capital goods from the factory - The Hon’ble Apex Court in the case of JK. COTTON SPINNING AND WEAVING MILLS LTD. AND ANOTHER Versus UNION OF INDIA AND OTHERS [1987 (10) TMI 51 - SUPREME COURT OF INDIA], held that removal contemplates physical removal of goods - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 220 - CESTAT MUMBAI
CENVAT credit - inputs - duty paying documents - it was alleged that the inputs brought by them into their factory on the strength of certain documents issued by the registered dealers were not the same on which the Central Excise duty was originally paid - Held that: - the quality and description of the goods have been admitted to be different in the statement given by the Director of the company. The said statement has not been retracted. In these circumstances, even without relying upon the statement of the dealer and their agents, charges are proved against the appellants and thus statement of dealers and agent become irrelevant - this was not a case which required cross-examination. The Directors themselves admitted the guilt. So, almost all allegations stood proved - appeal dismissed - decided against appellant.
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