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Central Excise - Case Laws
Showing 401 to 420 of 470 Records
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2018 (3) TMI 249 - CESTAT MUMBAI
CENVAT credit - inputs - MS scrap which was purchased/received from Simandhar Steel Movers (India) Private Ltd, a first stage dealer at Mumbai - whether under the facts and circumstances the Commissioner of Central excise is justified in holding that the proposed demand as per the SCN is not sustainable on merit under section 11 A(1) of the Act and accordingly have rightly dropped the charges in the SCN?
Held that: - the respondents have discharged the onus on them in terms of rule 7(2) of CCR 2002, which provides that the manufacturer or producer taking Cenvat credit on inputs or capital goods received by him shall be deemed to have taken reasonable steps if he satisfy themselves about the identity and address of the manufacturer or supplier, as the case may be, issuing the documents specified in Rule 7, evidencing the payment of excise duty or the additional duty of customs, as the case may be, either from his personal knowledge or on the strength of a certificate issued by person with whom he is familiar or on the strength of the certificate issued by the Range Supdt. of the factory of the manufacturer or supplier. We find that there is no allegation in the show cause notice that the appellant did not knew the supplier Simandhar and/or its proper address.
Even in a situation where explanation to Rule 9(3) is not attracted it would be open to an assessee to establish independently within the meaning of the substantive part of Rule 9(3) that he had in fact taken reasonable steps - the respondents had purchased the goods for the price, which included the duty element, and the same was paid by cheque. Further there is no allegation that the respondents have sourced raw material in dispute, from some other source. We also find that under the scheme of the Act and the Rules, it would be impractical to require the assessee to go behind the records maintained by the first stage dealers. The respondent under the fact of this case were found to have duly acted with all diligence in their dealings with the first stage dealers Simandhar.
The SCN are presumptive and not maintainable - appeal dismissed - decided against Revenue.
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2018 (3) TMI 248 - CESTAT MUMBAI
Clandestine removal - It was alleged that unaccounted finished stock of aluminium ingots weighing 18,503 Kgs valued at ₹ 18,78,592/- was seized along with some documents under a panchnama - principles of natural justice - Held that: - It is seen that the show-cause notice is based on the documents recovered and panchnama made during the search of the factory. The show-cause notice also relies on the statements of Shri N.M. Surana. Other than these evidence no evidence has been relied in the show-cause notice. In these circumstances, cross examination of the investigating officers and range officers is irrelevant and has rightly been denied by the Commissioner - The investigating officers and range officers are not witnesses in the impugned show-cause notice and therefore, any cross-examination of these officers would not serve any purposes.
As regards the non-supply of documents the impugned order records that the co-noticee Shri N.M. Surana had acknowledged the receipt of the impugned notices along with all the annexures thereof. In these circumstances, it is established that all the relied upon documents were furnished to the appellants and therefore, their request for supply of such documents was not correct.
Appeal dismissed - decided against appellant.
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2018 (3) TMI 247 - CESTAT AHMEDABAD
Scope of SCN - CENVAT credit - inputs used in work in progress goods damaged/ destroyed in fire, flood etc. - Held that: - the issue of admissibility of Cenvat credit on inputs used in work in progress goods damaged/ destroyed in fire, flood etc. is covered by the judgment in the case of VFC industries [2016 (9) TMI 1020 - CESTAT AHMEDABAD], where it was held that 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.
As far as demand relating to credit availed on capital goods, damaged during flood, the same is not removed from the factory premises; also, the insurance company compensated for damage of the said capital goods cannot be a valid ground for reversal of the credit.
Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 246 - CESTAT NEW DELHI
CENVAT credit - construction of building or a civil structure or part thereof - laying of foundation for making of structures for support of capital goods - Held that: - to come to a clear conclusion whether the Service Tax credit availed by the appellant is hit by the amendment made to Cenvat Credit Rules with effect from 1.4.2011, it will be necessary to go through in detail the various Annual Maintenance Contracts executed by the appellant for different periods. It will also be necessary to go through, in detail, the various invoices based on which such Cenvat credits have been availed. We find that this forum will not be able to carry out such verification.
The matter remanded to the adjudicating authority to carefully consider the submissions made by the appellant vis-a-vis the relevant contracts and invoices and come to a conclusion de novo - appeal allowed by way of remand.
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2018 (3) TMI 245 - CESTAT MUMBAI
CENVAT credit - Department has sought to disallow the credit of the duty involved in freight and insurance which the appellant has taken suo motu credit - Held that: - appellant is not entitle to take suo motu credit as per the Larger Bench decision of the Tribunal in the case of BDH Industries Ltd. v. Commissioner of Central Excise [2008 (7) TMI 78 - CESTAT MUMBAI] - decided against appellant.
Scope of SCN - Revenue is in appeal on the ground that the adjudicating authority has not confined himself within the limits of the show-cause notice which is for recovery of amount of credit availed suo motu by the assessee - Held that: - The ground on which the Revenue has sought recovery of cash does not have any basis in law - the challenge to imposition of penalty on the ground of being less than the amount of credit that has been availed suo motu is questionable as the show-cause notice has not invoked the provision of Section 11A of the Customs Act, 1962 for imposition of penalty.
Appeal dismissed - decided against Revenue.
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2018 (3) TMI 244 - CESTAT MUMBAI
Classification of goods - ‘Servo 2T Supreme’ - Held that: - When, in the instant case, the assessee-appellant is jobworker, the principal, IOCL who has accepted the chemical analysis and the composition, by merely wrong mentioning of sub-heading in the invoices cannot be changed the chance of the appellant/assessee - the classification has rightly brought under heading 3403 of the CETA, 1985 - appeal dismissed - decided against appellant.
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2018 (3) TMI 243 - CESTAT ALLAHABAD
Clandestine removal - SSI exemption - clubbing of clearances - crossing of threshold limit - Held that: - there is virtually no evidence on record to show that the manufacturing unit was indulging in clandestine activities. In the absence of any positive and affirmative evidence to confirm the above charge, the finding of Commissioner (Appeals) cannot be upheld - demand alongwith penalties set aside.
Appeal dismissed - decided against Revenue.
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2018 (3) TMI 242 - CESTAT ALLAHABAD
Clandestine removal - demand primarily based upon the records seized by the visiting officers including the labour con tractor record - Held that: - in the said case of R.A. Castings Pvt. Ltd. [2010 (9) TMI 669 - ALLAHABAD HIGH COURT], the Revenue's allegations were solely based upon electricity consumption. It was in that scenario, that the Court held that higher electricity consumption cannot be made basis for arriving at the excess production or steel ingots, In the present case, the Commissioner has himself observed that the reference to electricity consumption is only to corroborate the other evidences.
Similarly, in respect of the project report and the capacity of the machine installed in the factory, he has observed that the same are corroborative evidences to the main allegations, which are primarily based upon the entries made in the packaging register and the labour contract register.
Inasmuch as in the present case, the Revenue has been able to establish the procurement of the excess raw materials, excess payments made to the labourers, the excess electricity consumption and the excess installed capacity, the cumulative effect of all these evidences would lead to the inevitable conclusion that the appellants have manufactured and cleared clandestinely their final product.
Appeal dismissed - decided against appellant.
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2018 (3) TMI 241 - CESTAT ALLAHABAD
Clandestine removal - excess of stock - M.S. Ingots - M.S. Scrap/ Waste - Held that: - the effect of the entire evidence on record establishes beyond doubt that the goods loaded in the truck were cleared by M/s Premier Ispat Ltd., without payment of any duty of excise and without issuing the invoices. There is no explanation either by M/s Premier Ispat Ltd. or M/s Jai Maa Sharda Enterprises as to from where the said goods were purchased or came into existence - As regards the confiscation of the same, I agree with the Iower authorities that inasmuch as the seized goods were non-duty paid their confiscation has to be upheld. However, the duty involved was to the extent of ₹ 1,15,817/-, the redemption fine from ₹ 2,79,440/- to ₹ 1,00,000/-.
Clandestine removal - shortage of stock - Held that: - It is settled that the findings of clandestine removal are required to be based on the positive and tangible evidence and cannot be upheld on the basis of assumption and presumption - Reliance in this regard is made to the decision of the Hon’ble High Court of Allahabad in the case of Commissioner of Central Excise, Kanpur Vs. Minakshi Castings [2011 (8) TMI 896 - ALLAHABAD HIGH COURT] laying down that the shortages of finished goods without any evidence of clandestine removal, cannot lead to inference of evasion of duty - demand set aside.
Penalty on Director - Held that: - Commissioner(Appeals) has given a finding that no specific rule stands attributed to the Director and the matter has not been investigated so as to adduce any evidence against the said assessee - there is no evidence against Shri Amit Jain, the penalty imposed upon him should have been set aside in toto.
Appeal allowed in part.
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2018 (3) TMI 240 - CESTAT ALLAHABAD
Penalty u/s 11AC of CEA - clandestine removal - Held that: - Tribunal in the case of Galaxy Textile Vs. Commissioner of Central Excise, Vapi [2010 (7) TMI 516 - CESTAT, AHMEDABAD] observed that though the appellant had admitted shortages and have agreed to pay the duty thereon so as to avoid litigation but in the absence of any evidence to corroborate the allegations of clandestine removal, penalty is not imposable - penalty set aside - duty demand with interest upheld - appeal allowed in part.
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2018 (3) TMI 239 - CESTAT MUMBAI
CENVAT credit - whether the service tax paid on medical insurance premium for health insurance is admissible for cenvat credit or otherwise? - Held that: - the CISF employees are working for the appellant. In this fact, the service on which credit was availed i.e. medical premium for consumption is clearly excluded from the definition of input service - credit not allowed.
Demand of interest - Held that: - the interest is chargeable only when the cenvat credit is taken as well as utilized therefore merely by taking credit and without utilization the interest under Rule 14 is not payable - interest is not chargeable.
Appeal allowed in part.
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2018 (3) TMI 238 - CESTAT MUMBAI
CENVAT credit - place of removal - contention of the tax authorities is that the professional fees on which service tax liability has been discharged in 2012-13 pertains to activities beyond the place of removal and hence ineligible to be availed a CENVAT credit - Held that: - ‘Place of removal’ is an expression that is found in means in Central Excise Act, 1944 independently owing to assessment becoming liable to be determined upon clearance of goods from the factory of production. However, that expression cannot be considered as relevant for goods intended for export which are precluded from duty liability. In the context of certain services such as outward transportation, judicial interpretation shifted the ‘place of removal’ from factory to the port of export.
The eligibility for incentives on completion of export formalities is consistent with the ‘place of removal’ being the port of export. Exports are the culmination of production activity and are the motive force for production. Accordingly, the denial of entitlement for CENVAT credit on the ground that there is no nexus with manufacturing activity will not sustain.
Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 237 - CESTAT MUMBAI
Refund claim - exempt item - bagasse - section 11D of Central Excise Act, 1944 - Held that: - The nature of waste product in the scheme of Central Excise Act, 1944 has been decided by the Hon’ble Supreme Court in Union of India v. DSCL Sugar Ltd [2015 (10) TMI 566 - SUPREME COURT] thus according a finality to the issue of liability under rule 6 of CENVAT Credit Rules, 2004 - The amount was thus not payable, and even if liable to be deposited in accordance with section 11D of Central Excise Act, 1944 for having been recovered under the guise of duty, has already been paid by debit of CENVAT credit account - refund allowed - appeal dismissed - decided against Revenue.
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2018 (3) TMI 184 - BOMBAY HIGH COURT
CENVAT credit - inputs/capital goods - denial on the ground that the same have been used in the manufacture of final products which were wholly exempted from duty in terms of N/N. 115/75 - Held that: - the Commissioner has not recorded a finding of fact that the entire exercise was revenue neutral. No reasons have been assigned by the CESTAT for coming to the conclusion that entire exercise was revenue neutral - There is complete absence of findings of fact.
There was a finding of fact that the exercise was revenue neutral. It was not a case where allegation of the suppression of material fact by the assessee was made. In the present case, a specific finding is recorded to that effect by the Commissioner. The said finding is not dealt with by the CESTAT.
As the CESTAT which is the final fact finding authority has not done its duty, we have no option but to remand the matter for fresh consideration to CESTAT - matter on remand.
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2018 (3) TMI 183 - GUJRAT HIGH COURT
Attachment of immovable property - recovery of dues of lessee - whether the department can seek recovery of the dues of Harshwardhan Exports through sale of the property of the petitioner? - proviso to subsection (1) of Section 11 of the Central Excise Act as well as on subclause (ii) of clause( c) of subsection (1) of section 142 of the Customs Act.
Held that: - invocation of the said provisions by the department is defective. The central excise dues are that of Harshwardhan Exports. The department has not set up any case of Harshwardhan Exports and the petitioner Chandra Dyeing being one and same entity though on paper, separate companies.
The transaction of transfer of the leasehold rights of Harshwardhan Exports to the petitioner took place before the order of attachment was passed. It is not a case where the transfer took place after the property was attached. In plain terms, the said provisions apply in case of transfer of business and not merely transfer of property or assets.
In absence of any assertion of the department that Harshwardhan Exports and the petitioner Chandra Dyeing are the clones and the entire exercise of creating Harshwardhan Exports as a separate company was a sham transaction to defraud the Government revenue, in facts of the present case, there is no possibility allowing the respondents to sell the property of the petitioner for the unpaid dues of the Harshwardhan Exports. Even in the show cause notice dated 04.02.2010, the department has not built any such case - Merely because Harshwardhan Exports agreed not to vacate the premises till full export obligations are discharged, would not create any additional right in the property which can be sold for the purpose of recovery of the dues of Harshwardhan Exports.
The attachment and distress imposed by the department on the property in question are set aside - petition allowed - decided in favor of petitioner.
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2018 (3) TMI 182 - CESTAT NEW DELHI
Clandestine removal - shortage of stock - Held that: - It is clearly well settled that allegation of clandestine removal of finished goods cannot be sustained only on the basis of mere shortage - In the case of Continental Cement Company vs. Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] the Hon’ble Allahabad High Court has held that clandestine removal is a serious charge which is required to be proved by Revenue by tangible and sufficient evidence.
In the case of the appellant, the demand of Central Excise duty cannot be upheld, since the allegation of clandestine removal has been made only on the basis of alleged shortages noticed during stock verification.
Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 181 - CESTAT KOLKATA
Revenue neutrality - irregular availment of CENVAT credit - Held that: - the issue of Neutrality was not discussed in the orders of the lower authority. The issue of Revenue Neutrality is based on the proper examination of the facts of each case - the matter is remanded to the Adjudicating Authority to decide afresh after considering the submission of the appellant and to pass order in accordance with law - appeal allowed by way of remand.
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2018 (3) TMI 180 - CESTAT CHENNAI
CENVAT credit - it appeared that the appellants have availed Cenvat credit on input and input services used for generation of electricity in their Captive Power Plant (CPP) without adhering to the provisions of Rule 6 of CCR, in respect of excess quantum of electricity wheeled out to TANGEDCO - Rule 6 (3) (i) of CCR - Held that: - on the eligibility of availment of Credit in respect of eligible inputs used for generating electricity, there cannot be any doubt. The important takeaway from the definition in Rule 2 (k) (iii) of CCR, however is that the eligibility of input credits will however be restricted to goods used for generation of electricity for captive use. No doubt, there is no definition of captive use in CCR. In such a situation, the meaning of the phrase captive use as understood when used in central excise law and notifications will prevail.
The interpretation of the phrase captive use in respect of manufacture of excisable goods will only mean consumption of goods within the factory of manufacture and, more importantly, the fact that such goods are not sold of otherwise removed from the factory of manufacture. In Rule 2 k of CCR, in the Sub rule (I iv), apart from sub rule (iii), the only other provision related to manufacture of excisable goods is sub-rule (i) which concerns all goods used in the factory by the manufacturer of final products. On the same analogy, the goods used in the production of electricity for captive use will then mean the goods used for generation of electricity for consumption of manufacturer within his own factory of manufacture but definitely not electricity which is sold outside the factory.
Penalty - Held that: - the ingredients attracting imposition of penalty equal to tax demanded under Rule 15 (1) of CCR are not attracted to the facts of the present case - the equal penalty imposed under Rule 15(1) is set aside.
Appeal allowed in part.
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2018 (3) TMI 179 - CESTAT CHENNAI
CENVAT credit - duty paying invoices - main allegation is that in the Cenvat invoices the description of goods (raw material) is HR Coils, HR Sheets, MS Rounds, MS Wire Coil etc., whereas in commercial invoices and other documents the goods (raw materials) are described differently as MS scrap - Whether there is sufficient evidence that SRIPL Unit I & II had availed cenvat credit on invoices issued by dealers declaring despatched items as SS sheets/MS sheets, coils etc. and that actual goods received by SRIPL Unit I & II was only MS/SS scrap? - Whether the proceedings per se are hit by limitation?
Held that: - the main planks of the department s case against the assessee do not stand to scrutiny. There is also no other cogent or compelling evidence which can prop up department s allegation. Further, even the allegation made by the department that assessees have manufactured their final products by procuring locally manufactured scrap , is also not backed up by any corroborative evidence and can at best be termed as an assumption - there is no evidence of suppliers of local scrap, transporters, payment to such suppliers etc. The case of the department therefore does not sustain on merits.
Time limitation - Held that: - Appellants have stated that they have not benefited otherwise by taking any irregular credit as alleged by the department. The proviso to Section 11 A (1) would be attracted when there is suppression of facts with intent to evade payment of duty. The department has no case that appellants utilized the alleged wrongly availed credit to discharge duty liability. There is no evidence coming forth in this angle.
Tthe proceedings initiated by the department which have resulted in the appeals filed by SRIPL Unit I & II and other co-noticees are not only hit by limitation for the predominant period covered in the SCN, but more particularly cannot be sustained on merits.
Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 178 - CESTAT CHENNAI
Benefit of N/N. 214/86-CE - denial on the ground that the principal manufacturer L&T has not given a declaration under N/N. 214/86-CE as required for sending the goods to the appellant as job worker - Held that: - There is no dispute that the raw material sent by L&T to the appellant were converted as per the arrangement between the assessees and L&T; that the job worked goods returned back to L&T were used further by the latter; that duty was paid on the final goods cleared by L&T - non-filing of declaration for the purposes of availing N/N. 214/86-CE benefit, is only a curable defect and demand of duty only for that reason is an overkill - appeal allowed - decided in favor of appellant.
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