TMI Tax Updates - e-Newsletter
October 19, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Would intellectual property such as trademarks, copyrights and know-how come within the definition of 'plant' in the 'sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it'? - Held Yes - Claim of depreciation allowed - SC
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Income Tax:
Nature of expenditure - There is a clear finding of fact by the Tribunal that the legal expenses incurred by the Assessee were for protecting its business - High Court was not justified in upsetting a finding of fact arrived at by the Tribunal, particularly in the absence of a substantial question of law being framed in this regard - SC
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Income Tax:
Subsidy received prior to insertion of Explanation 10 to section 43(1) - Tribunal was not right in law in holding that the amount of subsidy received prior to insertion of Explanation 10 to sub-section (1) of section 43 of the Act can still be reduced from the cost of assets. - HC
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Income Tax:
Penalty u/s 271-E - The Add. CIT ought to have been conscious of the limitation u/s 275(1)(c), i.e., that no order of penalty could have been passed u/s 271-E after the expiry of the financial year in which the quantum proceedings were completed or beyond six months after the month in which they were initiated, whichever was later. - HC
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Income Tax:
In view of the assessment orders made in the case of the petitioner, the respondent authorities can no longer continue with the seizure of the ornaments in question and the same are required to forthwith be returned to the petitioner - HC
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Income Tax:
Transaction of gift of shares to a private limited company - the assessee is not carrying out any business or profession, therefore, the provisions of section 28(iv) are not applicable - AT
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Income Tax:
Disallowance of project development expenses claimed by the assessee as revenue expenditure u/s 37(1) - expenditure are allowable in the year under consideration irrespective of the fact that assessee has given dual status to such expenditure in its books of account vis-ŕ-vis computation of income filed along with return - AT
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Income Tax:
Reopening of assessment - mode of service of notice - By affixture notice - Merely because there was some error in service of notices on the assessee, statutory liability of the assessee to pay tax on capital gain was not over. - AT
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Income Tax:
Penalty u/s 271(1)(c) - bogus gifts - The assessee is no more and expired on 26.09.2006. The penalty proceedings were completed on legal heir i.e. Dr. K.C. Garg, who was in practice for more than 25 years out of India. - No penalty - AT
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Income Tax:
Assessment under section 172(4) - vessel MT Alabra - entire freight income of the assessee, which is only from operation of ships in international traffic, is taxable only in Singapore. The Assessing Officer was thus in error in bringing the same to tax in India. - AT
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Income Tax:
Non-compete fees paid - non-compete fee paid by the assessee did not create any capital assets, the same was revenue in nature- AT
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Income Tax:
Validity of proceedings u/s. 153C - As the jurisdiction for completion of assessment u/s. 153C is limited, AO cannot make roving enquiries or routine disallowances which are not warranted otherwise - AT
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Customs:
Exemption from payment of CVD - Whether the 'Ore Concentrate' imported by the assessee is eligible for complete exemption from payment of additional duty of custom/CVD under Notification No.4/2006-CE? – Held No - No relief even if the exercise is revenue neutral - It is open to assessee to take credit - SC
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Customs:
Payment of Differential Duty – Assessee imported imported 'Base Transreceiver Station (BTS) along with Antenna and Installation Cable – Antenna becomes an integral and inseparable part of the BTS without which it cannot even function – Differential duty not to be paid - Benefit of exemption allowed - SC
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Customs:
Tribunal was in error in coming to conclusion that since the goods have been exported and not available for confiscation, order of confiscation under Section 113 cannot be passed; Section 114 is thus sustainable - HC
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Customs:
Modification in the Bill of entry - assessee used a wrong expression "re-assessment of Bill of Entries" and did not quote the provision of law - This cannot be taken advantage of by the Department to deprive the assessee from making use of DEPB Scrip for claiming credit and also disabling them to make payment in cash. The assessee cannot be made to lose on both sides, by quoting a simple provision of law and raising a theoretical proposition - HC
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Service Tax:
Demand under Section 87 from debtors of Petitioner – Recovery order issued within two days of SCN – Liability of Petitioner yet to be crystallised; Resorting to Section 87 is not permissible - HC
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Service Tax:
Best judgement assessment u/s 72 – No allegation held against the appellant that they have not filed the return and failed to assess the tax –Provision of Section 72(b) are thus not attracted – SCN is deficient and not maintainable - AT
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Service Tax:
Relevant date of issuance of SCN - If we calculate the period during which the writ petition was pending and there was a stay order, the show-cause notice issued by the Revenue has to be considered as having been issued within one year. - AT
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Service Tax:
Activity of supplying data of drug master file on receipt of consideration from certain customers – Appellant is a manufacturer and does not fit into the category of scientific or technology institution or organisation - Demand set aside - AT
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Central Excise:
Denial of CENVAT Credit - whether the appellants are entitled to credit on the duty paid on bright bars used as inputs - The question whether the input is a result of a process of manufacture is irrelevant. What is relevant is whether duty has been paid or not on such input - AT
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Central Excise:
Denial of credit on dumpers and its parts - denial on the ground that these are neither inputs nor capital goods - Modvat/Cenvat credit is admissible on capital goods used in mines if mines are captive mines so that they constitute one integrated unit together with the concerned cement factory - AT
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Central Excise:
Export of goods - Failure to comply with the supplementary instructions issued by CBEC - appellant is not required to fulfill the condition imposed on him by way of supplementary instructions - Notification No. 42/2001 - AT
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Central Excise:
Refund claim - Denial of CENVAT Credit - Export of exempted goods - petitioners are entitled to remove the goods on furnishing the bond as set out in Annexure 16 in Form B-1 of the Central Excise Manual. Refund allowed - AT
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Central Excise:
Denial of SSI Exemption - Dummy unit - Use other's brand name - there was one man show which is evident from different materials gathered by Revenue, both the units are exposed to be dummies of ACF. - Demand confirmed - AT
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Central Excise:
Manufacturing of corrugated galvanised sheet from plain galvanised sheet - the said activity amounts to manufacture. - AT
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Central Excise:
Denial of refund claim - Restriction on utilization of cenvat credit for delayed payment of duty according to the provisions of Rule 8 (3A) - duty was initially debit to Cenvat account, but later paid in cash - Assessee allowed to take re-credit - AT
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Central Excise:
Claim of refund - deemed fiction of duty paid under protest - period of limitation - Tribunal's order would be applicable only to the period involved in those appeals and cannot be held to be applicable for the entire period in question. Inasmuch as neither any protest was lodged nor the Tribunal's order covers the period in question - AT
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VAT:
Levy of penalty u/s 86(19) of the DVAT Act - Whether bill of entry was not a valid document or invoice - impounding order u/s 59/61 of the DVAT and recorded the reason for doing so as: "Goods without Bill" - there was no legal justification for issuance of the impugned penalty - HC
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VAT:
Imposition of penalty u/s 53 (12) - movement of goods in the disguise of movement in the course of export to avoid tax liability - Levy of penalty confirmed - HC
Articles
News
Case Laws:
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Income Tax
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2015 (10) TMI 1308
Penalty under section 271F and 271(1)(b) - non-compliance of notices under section 153C as well as 142(1) and 143(2) - Held that:- CIT(A) dismissed the appeals of the assessee exparte without giving proper and sufficient opportunity of being heard and since the assessee was not well during the course of penalty proceedings, he has not got an effective opportunity to offer his explanation for noncompliance to the notices issued under section 153C as well as 142(1) and 143(2) Keeping in view of the facts of the case and the submissions made by the Ld. Counsel for the assessee, we consider it fair and proper and in the interest of justice to give one more opportunity to the assessee to offer his explanation for the non-compliance of notices under section 153C as well as 142(1) and 143(2). Accordingly, the impugned orders of the Ld. CIT(A) confirming the penalties imposed by the A.O. under section 271F and 271(1)(b) for the years under consideration are set aside and the matter is remitted back - Decided in favour of assessee for statistical purposes.
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2015 (10) TMI 1283
Nature of expenditure - whether the expenses incurred by the Assessee were for protecting the business of the firm or were expenses incurred for personal reasons namely consequent to disputes or differences relating to the ownership of the going concern with the erstwhile partners of the Assessee - Tribunal noted that the legal expenses incurred were for defending the business of the going concern and for protecting its interests and not to be personal in nature, nor could it be said that the expenses were unreasonable or not bonafide but rejected by HC - Held that:- We are not at all impressed with the submission of learned counsel for the Revenue. There is a clear finding of fact by the Tribunal that the legal expenses incurred by the Assessee were for protecting its business and that the expenses were incurred after 18th November, 1994. There is no reason to reverse this finding of fact particularly since nothing has been shown to us to conclude that the finding of fact was perverse in any manner whatsoever. That apart, if the finding of fact arrived at by the Tribunal were to be set aside, a specific question regarding a perverse finding of fact ought to have been framed by the High Court. The Revenue did not seek the framing of any such question. See K Ravindranathan Nair Versus Commissioner of Income-Tax [2000 (11) TMI 3 - SUPREME Court]. Accordingly, we hold that the High Court was not justified in upsetting a finding of fact arrived at by the Tribunal, particularly in the absence of a substantial question of law being framed in this regard. Therefore, we set aside the conclusion arrived at by the High Court on this question and restore the view of the Tribunal and answer the question in favour of the Assessee and against the Revenue. Eligibility of deduction on the alleged expenditure for acquisition of patent [trademarks] rights, copyrights and know-how, in terms of Section 35A and 35AB - High Court denied any benefit to the Assessee under Section 35A and Section 35AB since it was held that what was auctioned off was only goodwill and no amount was spent by AOP-3 towards acquisition of trademarks, copyrights and know-how - Held that:- As held, in our opinion rather speculatively by the High Court, that the valuation made by the Chartered Accountant of AOP-3 that is M.R. Ramachandra Variar that the goodwill was split into know-how, copyrights and trademarks only for the purposes of claiming a deduction under Section 35A and Section 35AB of the Act and the value of the goodwill was shown as nil and the deduction claimed did not represent the value of the know-how, copyrights and trademarks. We leave open the question of the applicability of Section 35A and Section 35AB of the Act for an appropriate case. This is because learned counsel submitted that if the Assessee is given the benefit of Section 32 read with Section 43(3) of the Act (depreciation on plant) as has been done by the Tribunal, the Assessee would be quite satisfied. Unfortunately, the alternative aspect of the Assessee's case was not looked into by the High Court. Would intellectual property such as trademarks, copyrights and know-how come within the definition of 'plant' in the 'sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it'? - Held that:- In our opinion, this must be answered in the affirmative for the reason that there can be no doubt that for the purposes of a large business, control over intellectual property rights such as brand name, trademark etc. are absolutely necessary. Moreover, the acquisition of such rights and know-how is acquisition of a capital nature, more particularly in the case of the Assessee. Therefore, it cannot be doubted that so far as the Assessee is concerned, the trademarks, copyrights and know-how acquired by it would come within the definition of 'plant' being commercially necessary and essential as understood by those dealing with direct taxes. Section 32 of the Act as it stood at the relevant time ‘In respect of depreciation of buildings, machinery, plant or furniture owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed –’ did not make any distinction between tangible and intangible assets for the purposes of depreciation. The distinction came in by way of an amendment after the assessment year that we are concerned with. That being the position, the Assessee is entitled to the benefit of depreciation on plant (that is on trademarks, copyrights and know-how) in terms of Section 32 of the Act as it was at the relevant time. We are, therefore, in agreement with the view taken by the Tribunal in this regard that the Assessee would be entitled to the benefit of Section 32 of the Act read with Section 43(3) thereof.- Decided in favour of assessee.
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2015 (10) TMI 1282
Subsidy received prior to insertion of Explanation 10 to section 43(1) - whether can still be reduced from the cost of assets? - Held that:- On the date when the assessee had invested in fixed capital assets, Explanation 10 to sub-section (1) of section 43 of the Act was not on the statute book and hence, the actual cost came to be computed in terms of the law as existing at the relevant time. Nothing happened in the year under consideration so as to justify the action of reduction from the written down value of the block of assets. Explanation 10 to sub-section (1) of section 43 of the Act came into effect only from 1.4.1999 that too prospectively and, therefore, has no application, more so, when plant itself was set-up in assessment year 1993-94. First question is answered in the negative that is in favour of the appellant assessee and against the revenue. It is, accordingly, held that the Income Tax Appellate Tribunal was not right in law in holding that the amount of subsidy received prior to insertion of Explanation 10 to sub-section (1) of section 43 of the Act can still be reduced from the cost of assets. - Decided in favour of assessee. Deduction u/s 80HHC - ITAT held that for the purpose of calculating deduction u/s 80HHC gross interest income without reducing therefrom the interest expenditure, is required to be excluded - Held that:- As decided in ACG Associated Capsules Pvt. Ltd. v. Commissioner of Income Tax, [2012 (2) TMI 101 - SUPREME COURT OF INDIA] Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads PGBP is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. Matter remanded back to A.O. to work out the deductions Decided in favor of assessee by way of remand
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2015 (10) TMI 1281
Penalty u/s 271-E - violation of the provisions of Section 269T - CIT(A) quashed penalty proceedings - Held that:- In the present case, at the level of the AO, the quantum proceedings was completed on 28th December 2007. Going by this date, the penalty order could not have been passed later than 31st March 2008. The second possible date is expiry of six months from the month in which the penalty proceedings were initiated. With the AO having initiated the penalty proceedings in December 2007, the last date by which the penalty order could have been passed is 30th June 2008. The later of the two dates is 30th June 2008. When the AO recommended the initiation of penalty proceedings the AO appeared to be conscious of the fact that he did not have the power to issue notice as far as the penalty proceedings under Section 271-E was concerned. He, therefore, referred the matter concerning penalty proceedings under Section 271-E to the Additional CIT. For some reason, the Additional CIT did not issue a show cause notice to the Assessee under Section 271-E (1) till 20th March 2012. There is no explanation whatsoever for the delay of nearly five years after the assessment order in the Additional CIT issuing notice under Section 271-E of the Act. The Additional CIT ought to have been conscious of the limitation under Section 275 (1) (c), i.e., that no order of penalty could have been passed under Section 271-E after the expiry of the financial year in which the quantum proceedings were completed or beyond six months after the month in which they were initiated, whichever was later. In a case where the proceedings stood initiated with the order passed by the AO, by delaying the issuance of the notice under Section 271-E beyond 30th June 2008, the Additional CIT defeated the very object of Section 275 (1) (c). - Decided in favour of assessee.
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2015 (10) TMI 1280
Authorization issued under section 132A - return of seizure of the ornaments seeked - Held that:- Silver ornaments weighing 219.841 KG came to be seized by the respondent authorities in exercise of powers under section 132A of the Income Tax Act, 1961 in the financial year 2011- 2012. Thereafter, the assessment came to be framed by the Assessing Officer of the petitioner at Varanasi for assessment year 2012-13, whereby after taking note of such seizure made by the authorities at Surat, the return as filed by the petitioner came to be accepted without making any addition on account of such seizure. In the aforesaid premises, the respondent authorities are no longer authorized to continue with such seizure made by them under section 132A of the Act. Under the circumstances, without entering into the merits of the validity of the authorization issued under section 132A of the Act, this court is of the opinion that in view of the assessment orders made in the case of the petitioner, the respondent authorities can no longer continue with the seizure of the ornaments in question and the same are required to forthwith be returned to the petitioner. - Decided in favour of assessee.
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2015 (10) TMI 1279
Authorization issued under section 132A - return of seizure of the ornaments seeked - Held that:- Silver ornaments weighing 219.841 KG came to be seized by the respondent authorities in exercise of powers under section 132A of the Income Tax Act, 1961 in the financial year 2011- 2012. Thereafter, the assessment came to be framed by the Assessing Officer of the petitioner at Varanasi for assessment year 2012-13, whereby after taking note of such seizure made by the authorities at Surat, the return as filed by the petitioner came to be accepted without making any addition on account of such seizure. In the aforesaid premises, the respondent authorities are no longer authorized to continue with such seizure made by them under section 132A of the Act. Under the circumstances, without entering into the merits of the validity of the authorization issued under section 132A of the Act, this court is of the opinion that in view of the assessment orders made in the case of the petitioner, the respondent authorities can no longer continue with the seizure of the ornaments in question and the same are required to forthwith be returned to the petitioner. - Decided in favour of assessee.
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2015 (10) TMI 1278
Addition on account of alleged perquisite on account of services rendered by CA Shri. Whora B.A. - Held that:- There is no dispute to the fact that Shri B.A. Wohra is getting huge professional fess from Jain Irrigation System Ltd., (JISL). At the same time, there is also no dispute to the fact that Shri B.A. Wohra is attending to the individual tax matters of the assessee and various family members and have not charged anything separately from them. Further, there is also no material on record to suggest that the company has paid any sum to the consultant on behalf of the assessee for rendering professional services. We find merit in the above submission of the Ld. Counsel for the assessee. It is not mandatory or compulsory for any professional to charge for the professional services rendered to any director or relative of a director or close family members of directors when he is getting fees for rendering services to a company. He may do it voluntarily and free of cost also. Further, there is also no material on record to show that the company has paid any amount to the consultant on behalf of the assessee. In this view of the matter, we set-aside the order of the CIT(A) and direct the AO to delete the addition.- Decided in favour of assessee. Additional of notional interest u/s.2(24)(iv) - Held that:- We find the Hon’ble Supreme Court in the case of V.M. Salgaocar and Bros. Pvt. Ltd. vs. CIT (2000 (4) TMI 2 - SUPREME Court) has held that insertion of clause (vi) in sections 17(2) and 40A(5) by Taxation Laws (Amendment) Act, 1984 and its subsequent repeal by Finance Act, 1985 provide a clear direction to interpret the provisions of section 17(2) and 40A(5) before insertion of clause (vi). Therefore, when a company obtains loan by paying interest and advances the same to directors without charging any interest, the interest attributable to the amounts advanced to directors could not be treated as perquisite. We further find that the Ld. Departmental Representative could not controvert the submission of the Ld. Counsel for the assessee that no such disallowance was made in scrutiny assessments in the past and no 263 proceedings or 148 proceedings were initiated after completion of the assessment. In view of the above discussion, we are of the considered opinion that no addition on account of interest u/s.2(24)(iv) is required on interest free deposit advanced to the assessee.- Decided in favour of assessee. Disallowance u/s.14A - Held that:- Since the assessee has neither paid any interest nor claimed any other expenditure, therefore, respectfully following the decision of the Coordinate Bench of the Tribunal in the case of Magarpatta Township Development and Construction Co. Pvt. Ltd. [2014 (9) TMI 351 - ITAT PUNE ] , we hold that no disallowance u/s.14A of the I.T. Act is called for in the instant case. We accordingly set-aside the order of the CIT(A) and direct the AO to delete the addition - Decided in favour of assessee. Disallowance u/s.14A - Shri Atul Bhavarlal Jain - Held that:- Admittedly, the assessee has borrowed funds from different parties which was invested in fixed deposits with banks/companies and shares of a Cooperative Bank. As against the interest earned at ₹ 56,16,040/- the assessee has paid interest of ₹ 68,96,925/-. Since the interest expenditure was higher than the corresponding interest income, the assessee had restricted the deduction to ₹ 56,16,040/- thus excluding the excess interest of ₹ 12,80,885/-. Therefore, in our opinion, the disallowance u/s.14A r.w. Rule 8D should be recomputed by taking the interest expenditure at ₹ 56,16,040/- and not ₹ 68,96,925/- for working out the disallowance u/s.14A r.w. Rule 8D(1)(ii) since the assessee is not in appeal against the disallowance of the administrative expenses under rule 8D(1)(iii). We therefore restore this issue to the file of the Assessing Officer for recomputing the disallowance u/s.14A r.w. Rule 8D after giving due opportunity of hearing to the assessee as per law. This ground by the assessee is accordingly partly allowed for statistical purposes. Transaction of gift of shares to a private limited company - CIT(A) deleted the addition - Held that:- There is nothing on record to prove that any consideration or benefit has been passed on to the assessee. We find no infirmity in the order of the CIT(A) on this issue. As per the provisions of section 28(iv), the value of any benefit or perquisite whether convertible into money or not arising from business or the exercise of a profession shall be chargeable to income-tax under the head “Profits and gains of business or Profession”. Here, the assessee is not carrying out any business or profession. Therefore, the provisions of section 28(iv) are not applicable to the facts of the present case. In this view of the matter and in view of the detailed reasoning given by the Ld.CIT(A), we find no infirmity in the same. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed - Decided in favour of assessee. Disallowance of interest from the interest expenditure - Held that:- There is no dispute to the fact that both the borrowings as well as the investments were made in the past. According to the AO since the assessee has not given the details of utilisation of borrowed funds, therefore, he was of the opinion that such borrowed funds might have been utilised towards purchase of immovable properties, jewelleries etc., However, from the copies of the assessment orders for A.Yrs. 2006-07 to 2008-09, we find no such disallowance has been made. The AO has only restricted the interest expenditure to the extent of interest income. The assessee in the impugned assessment year has also restricted the claim of such interest payment to the extent of interest received. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) deleting the disallowance of interest to the extent of ₹ 56,16,040/- from the interest expenditure. - Decided in favour of assessee.
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2015 (10) TMI 1277
Disallowance of Lease hold Land Expenses - Held that:- In the instant case, it is an admitted fact that the assessee has taken land on lease for setting up of project for processing of coir. It is also undisputed that the assessee has constructed the building at the leased premises. Thus the assessee has constructed super structure. These construction activities carried out by the assessee if put on to the test of Explanation 1 would show that the construction made by the assessee on the leased out premises would amount to capital expenditure. It is essential that the expenditure incurred on the construction of any structure on the leased premises should result in enduring benefit. In our considered opinion, the case of the assessee very much falls within the ambit of Explanation 1 of section 32(1) of the Act and in view of Supreme Court judgment in the case of Madras Auto Service [1998 (8) TMI 1 - SUPREME Court] we are not considering the various judgments cited by the Ld. AR. In view of the above, we find no merit in the arguments of the assessee's counsel on this issue - Decided against assessee.
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2015 (10) TMI 1276
Disallowance of project development expenses claimed by the assessee as revenue expenditure u/s 37(1) - assessing officer has taken the view that the expenditure claimed by the assessee is not allowable, since the assessee itself has treated the same as capital expenditure - Held that:- In the instant case, there is no dispute that the nature of business activities of all the stores, i.e., already opened and that are going to be opened, is identical in nature. It is also not in dispute that the assessee is already operating certain stores and it was in the process of opening more number of stores. Hence, we are of the view that it is a case of expansion of business activities. Hence, the view entertained by Ld CIT(A) that the opening of new stores give rise to new sources of income is, in our view, not justified. These expenditures incurred by the assessee are for the purposes of expansion of its business and those expenditure are in the nature of revenue (being mostly paid to employees). These are allowable in the year itself as per ratio of aforementioned decision of the Hon‟ble Bombay High Court in the case of CIT V/s Kothari Auto Parts Manufactures Pvt Ltd (1975 (12) TMI 28 - BOMBAY High Court) and Hon‟ble High Court of Gujarat in the case of CIT V/s Alembic Glass Industries Ltd (1975 (11) TMI 42 - GUJARAT High Court). These expenditures did not create any asset and also did not provide enduring benefit to the business of the assessee so as to say that the expenditure was capital in nature Therefore, we hold that expenditure are allowable in the year under consideration irrespective of the fact that assessee has given dual status to such expenditure in its books of account vis-ŕ-vis computation of income filed along with return - Decided in favour of assessee.
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2015 (10) TMI 1275
Addition under the head 'profit and gains of business' as against the claim of agricultural income claimed to be exempt by the assessee - CIT(A) delted the addition - Held that:- In the similar facts and circumstances the Hon'ble Delhi High Court in the case of Hindustan Industrial Resources Ltd. Vs. ACIT (2009 (1) TMI 1 - HIGH COURT DELHI ) observed that the assessee purchased agricultural land with an intention to use the land for industrial purposes. No agricultural activity was carried on that land by the assessee. The land was acquired by the competent authority under land acquisition Act for planned development of industry. The award passed in the acquisition proceedings also shows that the land was agricultural land. Now, the issue is that as the assessee has never used the said land for agricultural purposes and the land was intended to be used for industrial purposes, both by the assessee as well as by the acquiring authority, can it be said that it is an agricultural land and therefore, gain on transfer thereof is exigible to tax. The Hon'ble High Court observed that the intention does not alter the character and nature of the land. Further the fact that the assessee did not carry out any agricultural operations and did not also result in any conversion of the agricultural land into an industrial land. There is no material to show that any industrial activity or any operation for setting up of industry was actually carried out on the said land so as to change its character from agricultural to industrial. It is the character of the land at the time of sale that is relevant and not the purpose for which it was purchased by the assessee or from the assessee. Therefore, it was held that the land retained its character as agricultural and therefore, not liable for capital gains tax. We do not find any good reason to interfere with the findings of the Commissioner of Income Tax (Appeals) that the land was acquired by the assessee as investment and not as stock in trade of business and the transaction of holding the land for above 14 months before sale cannot be treated as business transaction of the assessee. - Decided in favour of assessee.
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2015 (10) TMI 1274
Ad-hoc disallowance @20% on Labour, Lodging & Site Expenses - Held that:- Although vouchers and details have been provided by the assessee but some of these details and evidences are not found to be fully authentic and there was no support of third party evidences in some of the cases. This fact has not been denied by Ld. Counsel that expenses were incurred in cash. Keeping in view, totality of the facts of the case, we feel that ends of justice will be met if the disallowance is reduced to 10%. - Decided partly in favour of assessee. Disallowance of Interest paid on account of delayed Service Tax and M Vat paid - compensatory nature OR penal nature? - Held that:- There are provisions for late payment in the respective legislations pertaining to service tax and M-vat, allowing the taxpayers for delayed payment of the dues if interest is paid. Thus, the interest is paid by the taxpayers within framework of provisions of law. These payments cannot said to be arising out infringement of law. These payments cannot said to be incurred by the assessee for any purpose which is offence or which is prohibited by law. Under these circumstances this expenditure can be said to be compensatory in nature. We can also take support from various judgments available on this issue. Hon’ble Supreme Court in the case of Mahalakshmi Sugar Mills Co. vs. CIT (1980 (4) TMI 1 - SUPREME Court) has held that interest for delayed payment of statutory dues is an allowable deduction u/s.37(1) of the Act. - Decided in favour of assessee Disallowance made on account of labour charges - CIT(A) deleted the addition - Held that:- CIT(A), himself examined this register in the appellate proceedings and found that Provident Fund, ESI, Professional Tax etc. were deducted from the salaries of the workers and this register gave complete information. It was further found by Ld. CIT(A) that the salary paid to each worker was not more than ₹ 10,000/- and that’s why most of the salaried workers were having income below taxable limit. It was further found by Ld. CIT(A) that salary register contained signatures of all the labourers and it was very much before the AO when he had impounded one of the registers. It was finally concluded by the Ld. CIT(A) that nothing adverse could be pointed out by the AO and accordingly disallowance was deleted. We have further noticed that Ld. CIT(A) has passed very reasoned order after personally examining all the facts which were furnished before the AO by assessee. The reasons and findings given by the Ld. CIT(A) are based upon the evidences and decision taken by the Ld. CIT(A) is in accordance with facts and circumstances of the case.- Decided in favour of assessee Disallowance on account of interest paid on secured loans - CIT(A) deleted the addition - Held that:- CIT(A) observed that the assessee firm was having interest free funds of ₹ 1,19,27,831/- in the form of credit balance of the partners as on 31.03.2008. The loans on which no interest had been charged is ₹ 30,50,000/- only and therefore, disallowance made by the AO was deleted. It is noted by us that factual findings have been given by the Ld. CIT(A) that ample amount of funds of the partners were lying with the assesee firm, on which no interest has been paid by the assessee firm to its partners. These factual findings have not been rebutted by the Ld. DR. The findings of the Ld. CIT(A) are justified and the order of the Ld. CIT(A) on this issue is confirmed. - Decided in favour of assessee
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2015 (10) TMI 1273
Disallowance of commission/brokerage - as per AO assessee neither offered the same for taxation nor produced any evidence to show that the deductors have reversed the entries wrongly made by them in this respect in their original TDS returns by way of its revision - CIT(A) deleted the dis-allowance - Held that:- After careful consideration, we find that Ld. CIT(A) did not commit any error in granting appropriate relief to the assessee. It was the case of the assessee that he had earned total commission of ₹ 3,10,44,414/- from both the parties and confirmations were also submitted. The assessee also produced the TDS certificate in which correct amount was shown. In view of these evidences, we are of the opinion that there is no infirmity in the order of the Ld. CIT(A). - Decided in favour of assessee. Disallowance of expenditure in relation to business promotion, electricity, rent payment, Books and periodicals, printing and stationery, entertainment & misc. expenses, meeting expenses, vehicle expenses, depreciation, vehicle insurance, driver’s salary, travelling expenses and gift expenses - Held that;- For the expenses incurred under the head ‘business promotion expenses’ the entire expenses could not be disallowed. The assessee had discharged his burden of proof by submitting the name of the persons to whom such incentive/discount/commission had been paid. After considering the overall facts and circumstances of the case, the Ld. CIT(A) deleted the disallowance made on account of business promotion expenses, rent and electricity expenses. However, learned CIT(A) upheld the disallowance at 20% of the expenses incurred in respect of telephone and 10% of expenses incurred on account of vehicle, car depreciation and periodicals/printing and stationery, travelling and conveyance, entertainment & gift expenses. He also upheld the disallowance to the extent of 20% in respect of meeting expenses. Learned CIT(A) had also taken into consideration that according to the CBDT Instruction No.225/26/2006-ITA-II(Pt.) dated 8.9.2010, wherein guidelines for completion of scrutiny assessment selected on the basis of AIR information laid down and if disallowances are made in excess of ₹ 10 lakhs, then the AO has to obtain prior permission/approval of the jurisdictional CIT to proceed with area of investigation other than AIR based scrutiny assessment. He observed that such instructions have not been followed and from the assessment record he noted that the AO did not consider the aforementioned CBDT instructions while proceeding to make other disallowable business expenses. We decline to interfere in the relief granted by learned CIT(A) - Decided in favour of assessee in part. Commission/brokerage - added as income of the assessee - CIT(A) deleted the addition - Held that:- In appeal before the CIT(A), the assessee stated that this particular sum was advance for labour charges to Anik Developers for interior decoration in the personal flat. Due to certain reasons the fund was refunded to the assessee and TDS was deducted by the Anik Developers by mistake. TDS certificate was also not issued by Anik Developers. After considering the relevant facts and circumstances, the Ld. CIT(A) observed that there was no income to the extent of ₹ 75 636/-. It was a personal advance for interior decoration work to the builder which had been refunded by them to the assessee. He further observed that the assessee was not a developer or in the development business and there was no income to the extent of ₹ 75,636-. He therefore deleted he addition. We do not find any infirmity in the above given reasoning of the CIT(A). - Decided in favour of assessee
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2015 (10) TMI 1272
Reopening of assessment - mode of service of notice - Held that:- By affixture notice was served on the given address of the assessee on 26/09/2008. Even the assessee himself admitted that he had received notice dated 30/09/2008 on 09/10/2008, which is within 12 months from the date of return filed i.e. 31/10/2007. The Hon’ble Punjab & Haryana High Court in the case of Amarjit Singh Tut (2013 (2) TMI 173 - Punjab and Haryana High Court) has held that statute of limitation is a procedural statute and is applicable to pending proceedings. Objection to the territorial jurisdiction has to be raised at the earliest and it otherwise deemed to have been waived.The Hon’ble Court further held that for A.Y. 2007-08 even notice issued and served within one year from the end of the date of return is valid notice U/s 143(2)(ii) of the Act. In another case, the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Jasbir Singh NRI through Shri Jarnail Singh, POA [2014 (3) TMI 221 - PUNJAB & HARYANA HIGH COURT ] has held that notice issue on the last known address is valid service. It is further held that it was incumbent on the Tribunal not to quash the whole proceedings as it amounted to leaving the assessee go scot free, though he is liable to pay tax on the capital gains. The assessee received compensation on compulsory acquisition of land, therefore, he cannot deny his liability to pay long term capital gain tax. Merely because there was some error in service of notices on the assessee, statutory liability of the assessee to pay tax on capital gain was not over. Because of procedural lapse, the assessee should not be a gainer and that too by default to escape his liability. The case law cited by the learned DR i.e. V.R.A. Cotton Mills P. Ltd. Vs. Union of India (2011 (9) TMI 611 - PUNJAB AND HARYANA HIGH COURT) is squarely application on the assessee’s case wherein it has been held that prescribed time limit for notice, the expression “serve” and “issue” are interchangeable, as has been noticed in Section 27 of the General Clauses Act, 1897 and also in a judgment of the Hon'ble Supreme Court in the case of Banarsi Devi Vs. ITO (1964 (3) TMI 11 - SUPREME Court), therefore, the moment, notice is signed and put in the course of transmission by the department, the notice is due to be served. It has been held that notice, which was served by the affixture on the last day of limitation is valid. The appellant had not filed any FIR against the claim that somebody had filed his return as claimed before the learned CIT(A), therefore, we set aside the order of the learned CIT(A) and directed to frame the order as per law after providing reasonable opportunity of being heard to both the parties. - Decided in favour of revenue.
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2015 (10) TMI 1271
Addition u/s. 68 - CIT(A) deleted the addition - Held that:- From the details filed it is clear that in most of the cases loans/liabilities are of not current year and the balances were appearing in the balance sheets of earlier AY.s.It was admitted by the AO that in the cases of Dilip Chopra, Pranav Enterprises and Gautam Petrochem Industries Pvt. Ltd.the outstanding liabilities pertained to earlier years.Therefore,in our opinion the FAA was justified in deleting the additions made by the AO.Similarly,in the cases of Rajendra Chopra,Rakesh Chopra,K-Sarc Polymers, Pyramid Energy Creations Co.,BPC Polymers and Chakreshwari Plastics (India) Ltd. Suvidhi Impex,it was found by the FAA that most of the balances were old,that the transactions were carried out through banking channesl,that identity or creditworthiness of the lenders was not in doubt.Lastly in the case of J K Jain and M/s. K.C. Jain it is found that their returns and balance sheets were filed before the AO but he did not comment about the authenticity of the documents. It is a fact that the PAN of all the creditores were made available to the AO.Copies of the returns of the lenders were also filed in most of the cases.The AO could have very well cross verified the genuineness of the transactions.But,he did not make any investigation in that regard. So,we agree with the observation of the FAA that the assessee had sufficiently discharged the burden which lay upon her to explain the nature and source of the credit entry appearing in her books of accounts and the burden had clearly shifted to the AO to prove to the contrary to hold that in spite of her explanation the entries could still be held to represent her income. In our opinion,the AO failed to discharge the onus shifted to him. Therefore, we hold that the FAA had rightly concluded that it was sufficient to delete the addition. - Decided in favour of assessee.
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2015 (10) TMI 1270
Revision u/s 263 - AO ought to have examined the allowability of interest expenditure u/s. 36(1 )(iii) when interest free funds were advanced by appellant - assessing officer ought to have considered the interest expenditure directly attributable to taxable business income for disallowance u/s. 14A of the Act read with rule 8D(2)(ii) - Held that:- It is seen by us that vide questionnaire dated 8th June 2011, the AO asked the assessee to furnish the details with regard to loans, rate of interest, their confirmation, their utilization, disallowance to be made u/s 14A etc. In response to the same, the assessee had filed detailed reply vide its letter dated 15th July 2011 in which the assessee submitted details with regard to disallowance u/s 14A and for allowability of interest expenses. The assessee also submitted copy of loans agreement with HDFC Bank and other exhaustive details were filed by the assessee before AO. After considering all these replies and evidences of the assessee, the AO had passed detailed order u/s 143(3). It is noted by us that in the assessment order passed u/s 143(3), the AO had made detailed discussion in the assessment order for making disallowance u/s14A for an appropriate amount. The AO has specifically mentioned in the table reproduced at page 4 of the assessment order that expenditure by way of interest was allowable. Thus, in our considered view, the AO has taken the view after considering all the factual submissions and replies and evidences filed by the assessee and after considering the judgment of Hon’ble Jurisdictional High Court in the case of Godrej Boyce Manufacturing Co. Ltd. vs. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] and judgment of Special Bench of ITAT Mumbai in the case of Cheminvest Ltd Vs. ITO [2009 (8) TMI 126 - ITAT DELHI-B ] AO made disallowance of an aggregate amount of ₹ 4,49,516/- u/s 14A r.w.r 8D. Ld CIT DR could not point out anything wrong in appreciation of the facts by the AO. Thus, in our considered opinion, view taken by the AO was one of the possible views as per law and facts and therefore, Ld. CIT could not have exercised jurisdiction u/s 263 to set aside the assessment order passed u/s 143(3). Also it has been shown by ld. Counsel, on the basis of material on record, that loan from HDFC Bank was specifically taken by the assessee for the purpose of procuring raw material i.e. Castor Seeds. This fact is cross verified with the help of sanction letter of the said bank enclosed at page 54 of the paper book. This vital fact has been accepted by the Ld. CIT at page 9 of the impugned order passed u/s 263 of the Act. Once this fact is on record and stands uncontroverted till date, then it can be safely said that the loan has been utilized for the purpose of the business of the assessee and consequently the deduction of interest will be allowable u/s 36(2)(iii) of the Act and therefore, question of applicability of section 14A would not arise - Decided in favour of assessee.
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2015 (10) TMI 1269
Penalty u/s 271(1)(c) - bogus gifts - CIT(A) deleted the penalty - Held that:- The co-ordinate Bench of the Tribunal had decided identical issue in case of late Smt. Kesar Devi Garg wife of assessee wherein the gift of ₹ 10,00,000/- was received from Shri Sanwar Mal Saraff. The quantum addition was also confirmed by the ITAT in case of late Smt. Kesar Devi Garg for A.Y. 2001-02. The penalty under section 271(1)(c) was imposed in that case which has been deleted by the co-ordinate Bench vide order dated 11th May, 2012. The assessee is no more and expired on 26.09.2006. The penalty proceedings were completed on legal heir i.e. Dr. K.C. Garg, who was in practice for more than 25 years out of India. The case law referred by the assessee are squarely applicable and the co- ordinate Bench decided the identical issue in favour of the assessee. Therefore, we uphold the order of ld. CIT (A). - Decided against revenue.
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2015 (10) TMI 1268
Assessment under section 172(4) - vessel MT Alabra - whether in view of the limitation of benefits provisions set out in the Indo Singapore treaty, the assessee can indeed be declined the benefits of India Singapore tax treaty? - Held that:- There is no dispute that the business is being carried on by the assessee in Singapore and that the assessee is tax resident of Singapore. By letter dated 31st December 2013 (Reference no. 200716495G), Inland Revenue Authority of Singapore has confirmed that, in the case of Albara Shipping Pte Ltd, “freight income has been regarded as Singapore sourced income and brought to tax on an accrual basis (and not remittance basis) in the year of assessment”. The assessee has also filed a confirmation dated 4th December 2013 from its public accountant that the freight of US $ 6,71,366 earned on MT Albara’s sailing from Sikka port has been included in the global income offered to tax by the company in Singapore. On these facts, in our considered view, the provisions of Article 24 cannot be put into service as this provision can only be triggered when twin conditions of treaty protection, by low or no taxability, in the source jurisdiction and taxability on receipt basis, in the residence jurisdiction, are fulfilled. The only reason for declining Indo Singapore tax treaty benefits was the application of Article 24 and that there is no other dispute on the claim of treaty protection of shipping income under article 8(1) which provides that, “Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State”. In this view of the matter, entire freight income of the assessee, which is only from operation of ships in international traffic, is taxable only in Singapore. The Assessing Officer was thus in error in bringing the same to tax in India. We uphold the plea of the assessee and direct the Assessing Officer not to tax income of the assessee, from operation of ships in international traffic, in India. The assessee gets the relief accordingly. - Decided in favour of assessee.
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2015 (10) TMI 1267
Non-compete fees paid - whether CIT(A) legally erred in not considering the non-compete fees as an intangible asset (capital expenditure) and not allowing the depreciation for the current year as well as consequential effect for the future years u/s.32(1)(ii) ? - Held that:- Applying the proposition of law laid down in the case of Everest Advertising Pvt. Ltd. [2015 (1) TMI 968 - BOMBAY HIGH COURT] and other High Courts/Tribunal, we hold that non-compete fee paid by the assessee did not create any capital assets, the same was revenue in nature. Accordingly, the AO is directed to allow the same as revenue expenditure. - Decided in favour of assessee.
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2015 (10) TMI 1266
Validity of proceedings u/s. 153C - roving enquiries or routine disallowances - AO invoked the provisions of Section 144 and made various additions - Held that:- No merit in Revenue’s grounds in AYs. 2004-05, 2005-06 and 2008-09. There is no incriminating material as far as assessee is concerned. Nothing was brought on record either in the assessment order or before the CIT(A) or during the proceedings before us that there is any incriminating material identified as belonging to assessee. Therefore, the proceedings per se u/s. 153C should not arise. Even if for the sake of argument consider that proceedings u/s. 153C are appropriate, the AO cannot make any routine disallowance in the search assessments in the absence of any incriminating material. AO would be entitled to make additions u/s. 153A. As the jurisdiction for completion of assessment u/s. 153C is limited, AO cannot make roving enquiries or routine disallowances which are not warranted otherwise - Decided against revenue. Coming to AY. 2009-10, as already stated above, the proceedings are not u/s. 153C. Since AO has neither followed the procedure u/s. 144 nor CIT(A) has considered assessee’s request for examining the Books of Accounts, we are of the opinion that the deletion by CIT(A) of the disallowance of the personal expenditure and also confirmation of the amount as unexplained cash credit is without any basis. Even though Ld. CIT(A) noted that assessee failed to produce the genuineness of these transactions before the AO and before CIT(A), there seems to be no enquiry made by any of the authorities to come to the said conclusion. In view of this, we are not in a position to uphold the order of CIT(A) in AY. 2009-10 and therefore the Revenue’s grounds on disallowance of personal expenditure are to be considered as allowed for statistical purposes.
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Customs
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2015 (10) TMI 1288
Exemption from payment of CVD - Manufacture of Ferro-Alloys - Whether the 'Ore Concentrate' imported by the assessee is eligible for complete exemption from payment of additional duty of custom/CVD under Notification No.4/2006-CE? – Appellant submits that entire exercise is Revenue neutral and assessee can avail CENVAT credit of the duty paid. Held That:- Tribunal has rightly arrived at the conclusion that by virtue of Note 4, concentrate has to be necessarily treated as different from ores which is deemed as manufactured product after Molybdenum Ores underwent the process of roasting. Roasting of ores and converting the same into concentrates; process would be of manufacture - Molybdenum Ore underwent roasting and Notification No. 4/2006-CE exempts only 'ores'; concentrates automatically falls outside the purview of said notification. It is rightly argued by the learned senior counsel for the Revenue that exemption notifications are to be construed strictly and even if there is some doubt, benefit thereof shall not enure to the assessee but would be given to the Revenue. - Decision made in the case of IVRCL Infrastructure & Projects Ltd. v. Commissioner of Customs, Chennai [2015 (4) TMI 562 - SUPREME COURT] followed Contention of Revenue is held correct - Assessee being appellant and exercise of Revenue is neutral; no need to file the appeal arises – Be that as it may, if that is so, it is always open to the assessee to claim such a credit. - Decided against the assessee.
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2015 (10) TMI 1287
Payment of Differential Duty – Assessee imported imported 'Base Transreceiver Station (BTS) along with Antenna and Installation Cable – Revenue contends that Serial No. 239 of Notification No. 21 of 2002 does not cover Antenna and installation cable so imported thus Appellant is liable to pay differential duty. Held That:- Definition of BTS in Wiley Encyclopedia of Electrical and Electronics Engineering specifically mentions that the same is inclusive of Antenna - Antenna becomes an integral and inseparable part of the BTS without which it cannot even function – Differential duty not to be paid - Appeal lacks merit – Disposed in favour of the assessee.
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2015 (10) TMI 1286
Levy of penalty and confiscation of prohibited goods already exported – Castor oil mixed with certain additives - Whether Tribunal was right in holding that Section 113 cannot be invoked for confiscation of goods and was justified in setting aside the penalty imposed under Section 114? Held That:- Goods exported contrary to prohibition imposed by law; penalty was rightly imposed by the Adjudicating Authority - Tribunal was in error in coming to conclusion that since the goods have been exported and not available for confiscation, order of confiscation under Section 113 cannot be passed; Section 114 is thus sustainable – Decided in favour of Revenue.
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2015 (10) TMI 1285
Application for modification in the Bill of entry or re-assessment of bill of entry - assessee initially paid the CVD using DEPB credit - What the respondent/assessee actually requested in their representation was for "re-assessment of their Bill of Entries". But, the only object of the assessee in making such a request was to enable them to pay CVD by cash and to seek equivalent credit in DEPB Scrip. - Powers of the tribunal – whether Tribunal was correct in sustaining the appeal - Held that:- Theoretically, our answer would be in the negative, that is in favour of the revenue. Whether a miscellaneous provision of law can be invoked to permit a thing, which is prohibited by a specific provision or not - Held that:- Even here, if we divest this case from the rest and look at the question of law on a theoretical basis, it is correct to say that if something is not permitted by a specific provision, neither of the parties can take recourse to a residuary or an omnibus provision. But, unfortunately, what the Original as well as the first Appellate Authorities had lost sight of is the fact that the assessee actually wanted the entries in their Bill of Entries to be modified only for the purpose of enabling them to make payment in cash - It is not necessary for an assessee, while making a request to the jurisdictional Excise Officer to quote a provision of law or to use only the proper language as stated in the statute. Whether Tribunal can exercise the discretion of the proper officer under Section 149 of the Customs Act, 1962. - Held that:- Without quoting Section 149 and without using the appropriate language relevant for the action, namely "Amendment of Bill of Entries", the assessee had used the wrong expression "re-assessment". This cannot be taken advantage of by the Department to deprive the assessee from making use of DEPB Scrip for claiming credit and also disabling them to make payment in cash. The assessee cannot be made to lose on both sides, by quoting a simple provision of law and raising a theoretical proposition. – Decided partially in favour of the assessee.
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2015 (10) TMI 1284
Demand for differential customs duty under Section 28 – Settlement Commission - Dismissal of application in absence of Petitioner causes serious prejudice to the Petitioner – Revenue found adjournments made to be flimsy and without any reasonable cause – No documents filed even after three weeks; the order is just, fair and proper. Held That:- Since amount of differential duty is large, final opportunity granted before settling of application with final order and direction – Petition allowed with a conditional order – If Petitioner remains present in office of competent officer, he would get an opportunity to appear before the Commission; same shall then proceed in accordance with law – Appeal disposed conditionally in favour of Petitioner.
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Service Tax
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2015 (10) TMI 1307
Demand under Section 87 from debtors of Petitioner – Recovery order issued within two days of SCN – No final adjudication in case of Service Tax liability – Held That:- Claim under Section 87 can be made only when final adjudication has been done after quantifying the amount due and payable by the assessee – Liability of Petitioner yet to be crystallised; Resorting to Section 87 is not permissible – Decision made in the case of R. V. Man Power Solution v. Commissioner of Customs and Central Excise [2013 (4) TMI 294 - UTTARAKHAND HIGH COURT] followed - Appeal Allowed in favour of the assessee.
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2015 (10) TMI 1306
Liability of Service Tax on manufacture and repairing of Hydraulic Service Trolleys – whether appellant is a sub-contractor and liable to pay service tax? – Held that:- Questions of fact can be best judged by Adjudicating Authority – Matter remanded back.
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2015 (10) TMI 1305
Best judgement assessment u/s 72 – Non submission of information hampered the determination of service tax liability and has not filed the return as well; thus invoking Section 72 – Held That:- Appellant filed the ST-3 returns regularly thus foundation of SCN that Appellant has not filed their return is incorrect. Regarding letters issued seeking information from the appellant - Held that:- appellant has specifically asked the department to tell what information they require, but despite the appellant s request, it was not informed what information /details /documents were required for by the department to issue the show cause notice. In the absence of any document, nature of details which was sought to be asked from the appellant specifically, in that case, the show cause notice is only on the basis of assumption and presumption. No allegation held against the appellant that they have not filed the return and failed to assess the tax –Provision of Section 72(b) are thus not attracted – SCN is deficient and not maintainable – Decided in favour of the assessee.
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2015 (10) TMI 1304
Relevant date of issuance of SCN - Claim of refund of service tax paid since no SCN was issued - GTA - No SCN issued for recovery of service tax for the relevant period since the writ petition were pending before the HC - when WP was dismisssed, assessee paid the service tax on its own - Exclusion of period for issue of SCN - Held That:- According to the provisions of Section 73(2b) Explanation where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. In this case, the stay was granted on 04/02/2004, the final decision rejecting the writ petition was rendered on 09/08/2005. If we calculate the period during which the writ petition was pending and there was a stay order, the show-cause notice issued by the Revenue has to be considered as having been issued within one year. Therefore the show-cause notice has to be considered as issued within the normal period of limitation. The tax paid by the appellant is in accordance with law and therefore the demand for service tax made by Revenue has to be upheld. Consequently the refund claim filed by the appellant and the rejection of the same also has to be upheld. - Decided against the assessee. Demand of Interest - Once service tax liability is upheld, interest liability is also upheld. Imposition of Penalty – Revenue contended that imposition of penalty is perfectly in order and needs no interference – Held That:- Once the writ petition was dismissed; assessee paid the entire tax amount in the same month – No delay on part of assessee – Penalties are set aside.
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2015 (10) TMI 1303
Activity of supplying data of drug master file on receipt of consideration from certain customers – Appellant contends that service is for exclusive use of the buyer; restricted to transfer it to any other person – Further contended that definition of "Scientific or Technical Consultancy Services" does not cover the Appellant – Revenue contests that definition of ‘Scientific or Technical Consultancy Services' talks about advice or technical assistance provided to a client and the Appellant is covered in the same. Held That:- Appellant is a manufacturer and does not fit into the category of scientific or technology institution or organisation - Impugned order is unsustainable and is set aside – Decision made in the case of Ruchi Infotech Ltd. [2015 (7) TMI 97 - CESTAT NEW DELHI] and Steelcast Ltd. [2008 (12) TMI 92 - CESTAT AHMEDABAD] followed – Decided in favour of the Appellant.
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2015 (10) TMI 1302
Refund of Service Tax on works contract prior to 1-6-2007 – Appellants have discharged the liability by mistake – Refund claim rejected by Revenue on the grounds that the works contract awarded to first appellant is divisible one – Held That:- Service tax liability on works contract cannot be imposed prior to 1.6.2007 by vivisecting the contract and taxing individually the services – Appeals allowed and impugned order set aside – Decision made in case of Larsen and Tourbo Ltd. & others [2015 (8) TMI 749 - SUPREME COURT] followed – Decided in favour of the Appellant.
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2015 (10) TMI 1301
Utilisation of CENVAT Credit on outdoor catering service – Whether the service is input service? - Cost of outdoor service recovered from workers; employer cannot take credit of that part - Held That:- CENVAT credit facilities are available to manufacture on outdoor catering service as decided by Larger Bench - Difference pointed out by Respondent not shown – Decided in favour of the Appellant.
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2015 (10) TMI 1300
Availment of credit – Whether Garden Maintenance Services, Event Management Services, Outdoor Catering Services, Telephone Services & Brokerage Charges are input services? – SCN issued denying the credit on grounds that said services do not qualify as input services – No nexus found between input and output services by Revenue. Held That:- Outdoor Catering Service is essential to run the business of appellant; Garden Maintenance Service is essential in terms of consent to operate, as directed by the Maharashtra State Pollution Control Board (MPCB); Event Management Service is also essential being incurred at opening ceremony or ceremonial occasions; Brokerage Service being incurred for finding residential accommodation for employees, the same is essential for ensuring availability of staff to carry on its business - All services are held as essential inputs for business of Appellant – Appeal allowed in favour of the Appellant.
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Central Excise
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2015 (10) TMI 1297
Maintainability of writ petition - condonation of delay in filing an appeal before Commissioner (Appeals) - directly challenging the order-in-original passed by the adjudicating authority - Denial of CENVAT Credit - Bar of limitation - Held that:- Tribunal has dismissed the appeal preferred by the petitioner against the order passed by the Commissioner (Appeals) by concurring with the view expressed by the Commissioner (Appeals). Insofar as condonation of the delay caused in filing the appeal by the Commissioner (Appeals) is concerned, the Full Bench of this court had concluded the issue by holding that there is no power to condone the delay beyond a period of thirty days as provided by the proviso to section 35 of the Act nor can the appeal be filed beyond a period of ninety days. Under the circumstances, the impugned orders passed by the Commissioner (Appeals) and the Tribunal do not suffer from any legal infirmity warranting interference. Perusal of the impugned order-in-original reveals that the petitioner had raised a contention as regards the storage tanks being capital goods and the M.S. Angles, Channels, H.R. Plates, bars etc. being used for repair and maintenance thereof and alternatively had submitted that in case H.R. Plates, Angles, Channels and bars are not considered to be capital goods, cenvat credit is admissible as input credit instead of capital goods credit and the adjudicating authority has, after considering the said submission on merits, turned down the contention of the petitioner. Under the circumstances, this is not a case where the impugned order suffers from the infirmity of having been passed in breach of the principles of natural justice nor has the adjudicating authority acted in excess of its jurisdiction nor is the order without jurisdiction. It is also not the case of the petitioner that the adjudicating authority has acted in flagrant disregard of law or rules of procedure. Under the circumstances, the present case does not fall within any of the exceptional circumstances envisaged by the Full Bench in the order passed in this very petition so as to warrant interference in exercise of powers under Article 226 of the Constitution. - Decided against assessee.
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2015 (10) TMI 1296
Restoration of appeal - Appeal dismissed for non prosecution - Held that:- Having regard to the finding recorded by the Tribunal in the impugned order dated 10.4.2014, it cannot be said that the impugned order suffers from any serious legal infirmity. However, considering the fact that the petitioners do not desire to contest the appeals on merits and only seek to avail of the benefit of option of reduced penalty under section 11AC of the Central Excise Act and rule 26 of the Central Excise Rules as the case may be, which, according to the petitioners, was not given to them at the relevant point of time, this court is of the view that it would be in the interests of justice, if the appeals are restored to the file of the Tribunal for deciding the same on the limited question - Decided in favour of assessee.
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2015 (10) TMI 1295
Remission of duty - CENVAT Credit - Held that:- So far as the first question is concerned, the Full Bench of this Court in Commissioner of Central Excise and Customs, Ahmedabad-II Vs Intas Pharmaceuticals Limited, reported in [2013 (4) TMI 532 - GUJARAT HIGH COURT] has held regarding remission of duty on destruction of final product and credit taken on inputs used in manufacture of such final product. The remission application was filed on 3.10.2005, whereas Rule 3(5-C) came into force on or after 7.9.2007. Therefore, benefit was available to the respondent assessee to claim the benefit of Cenvat Credit as the goods were destrobed in fire - Decided against Revenue.
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2015 (10) TMI 1294
Waiver of pre deposit - Denial of exemption claim - Held that:- Earlier the Tribunal in 2010 granted absolute stay and allowed the application for waiver of predeposit. On the other hand, learned counsel for the respondent – Department has submitted that in identical circumstances this Court in the case of Bharat Sanchar Nigam Limited Vs. Commissioner of Central Excise, Indore (2015 (9) TMI 936 - MADHYA PRADESH HIGH COURT) has directed the Bharat Sanchar Nigam Ltd., to deposit 50% of the amount in question. - Partial stay granted.
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2015 (10) TMI 1293
Refund claim - Denial of CENVAT Credit - Export of exempted goods - in the case of the export under bond whether the appellant is entitled to claim refund of duty in terms of Rule 19 of the Central Excise Rules, 2002 or not - held that:- The petitioners had manufactured both dutiable and exempted final product (packaged software and printed books respectively). The petitioner has taken credit on input used in the manufacture of dutiable as well as exempted final products. If the exempted products are exported outside India, the provisions of Rule 6 (6) (v) of the CENVAT Credit Rules are applicable. Therefore, the bar provided under Rule 6 (1) and the liability created under Rule 6 (3) (b) of the CENVAT Credit Rules, 2004 are not attracted. By denying to the petitioner from exporting the printed books under bond what the respondents want to do is in fact to levy 10% on the sale price of the printed books in terms of Rule 6 (3) (b) of the CENVAT Credit Rules, 2004. Direction of the respondent no. 2 to the petitioners to pay 10% even though printed books were exported as not legally sustainable. It is only in the event the petitioners does not export the printed goods and do not maintain the account as contemplated by rule 6 (2) the petitioner would be required to pay 10% on the sale price of the printed books not so exported. - no CENVAT Credit will be available in respect of the inputs used in the manufacture of exempted products, Rule 6 (6) (v) of the CENVAT Credit Rules creates an exemption inter alia in respect of the excisable goods removed without payment of duty for export under bond in terms of Central Excise Rules, 2002. Considering the language of Rule 6 (6) (v) of the CENVAT Credit Rules, 2004, the petitioners are entitled to avail CENVAT CREDIT in respect of the inputs used in the manufacture of the final products being exported irrespective of the fact that the final products are otherwise exempt. Both from the point of Government and the assessee is to allow the assesses to take CENVAT Credit on the inputs used in the export products and allow the assessee himself to adjust it for payment of duty on other products. If the adjustment is not possible, CENVAT Credit is refunded in cash. This appears to be the Scheme of Rule 5 of the CENVAT Credit Rules, 2004. With a view to achieve this object, the Central Government has specifically enacted Rule 6 (6) (v) of the CENVAT Credit Rules, 2004 to the effect that the bar created by Rule 6 (1) will not apply for goods exported. Considering the conscious and express provisions contained in Rule 6 (6) (v) for exported goods, to deny the permission to export under bond and / or to levy 10% on the value of the exported goods under Rule 6 (3) (b) on the footing that the printed books exempted and, therefore, attract Rule 6 (1) would be incorrect and completely nullify and frustrate Rule 6 (6) (v). Sub-rule (i) to (vi) are identical and the difference in Rule 6 (6) of the CENVAT Credit Rules, 2004 and Rule 6 (5) of the CENVAT Credit Rules, 2002 is not relevant for the purpose of the present case. Rule 6 (1), 6 (2), 6 (3), 6 (4) of the CENVAT Credit Rules under CENVAT Credit Rules, 2002 as well as under the CENVAT Credit Rules, 2004 remains the same. As noted earlier the object and purpose of Rule 6 (6) of CENVAT Credit Rules, 2004 is to promote the policy of the Government that the benefit of duty paid on input is available as credit in respect of certain exempted goods as well as the exempted goods exported under bond. The minor change in the wordings of Rule 6 (6), of the CENVAT Credit Rules, 2004 by using the term "excisable goods" instead of exempted goods is that the term "exempted goods" may not cover the dutiable goods which are exported under bond. Therefore, in order to widen and cover both dutiable and exempted goods exported under bond Rule 6 (6) of CENVAT Credit Rules, 2004 uses the expression "excisable goods". As an illustration, if a car which is dutiable is exported under bond without payment of duty there may be doubt as to whether credit on the inputs will be available, since the car is cleared without payment of duty under Rule 6 (5) of CENVAT Credit Rules, 2002. It could be argued that it covers only the exempted goods exported and not dutiable goods exported. In order to cover such a situation also, Rule 6 (6) of CENVAT Credit Rules, 2004 used the expression "excisable goods" which is wider to include both dutiable as well as exempted goods. - petitioners are entitled to remove the goods on furnishing the bond as set out in Annexure 16 in Form B-1 of the Central Excise Manual. Refund allowed - Decided in favour of assessee.
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2015 (10) TMI 1292
Denial of SSI Exemption - Dummy unit - Use other's brand name - held that:- When the record itself indicates categorical statements recorded from different persons under Section 14 of Central Excise Act against assessee and there was one man show which is evident from different materials gathered by Revenue, both the units are exposed to be dummies of ACF. - Revenue has also brought out that there is certificate issued Consulting Engineer to the effect that SA had no manufacturing facility for manufacture of trailers on record. That is established from record which was not examined by Commissioner (Appeals). The order of the learned Commissioner (Appeals) is therefore liable to be interfered and set aside. - Decided in favour of Revenue.
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2015 (10) TMI 1291
Duty demand - Clandestine Clearance of goods - Held that:- Appellant has not been able to substantiate their pleading and the argument that they did not manufacture the subject goods mentioned during the period from November 2003 to January 2004 which have been called as the difference between RG-I Register and “private production register”. When there has not been any evidence of payment of duty for the said quantity of goods and there could not be any possibility of such evidence also, when there are no entries in the RG-I register for such quantities of goods produced, then certainly it is the liability of the appellant to make the payment of duty of central excise under the law of Central Excise and make good the loss caused to the National Exchequer in this regard. Case is of peculiar facts wherein department made the audit in November-December 2004 for the manufacturing operations done since November 2003 to December 2004. The activity of the Audit is done post facto operations and is not done simultaneously during the manufacturing activity for the current period. The audit is mainly based on the examination of records though the department has not taken the statement of the manufacturer of the contractor. Therefore, here it is not binding on the Department to produce some extra evidence regarding the difference in quantity of two documents namely ‘private Production Register’ and the RG-I Register. As the matter concerns with the past production and clearance, the Department can not always find such goods and produce before the adjudication. “Private production Register” cannot be questioned for the entries made therein when the manufacturer appellant themselves came forward to give explanation about the same through their letter dated 7.1.2005 mentioned above. The manufacturer appellant has not stated that the entries made there are faulty or erroneous. They only have tried to explain through the letter dated 7.1.2005 the difference in the quantities of entries made in the said private register and RG-I register, though it was not found acceptable. - No other option but to confirm the liability of payment of Central Excise Duty along with interest against the appellant for the subject production of the goods except for the production made during the period of November 2003, which has been found to be beyond the time limit of five years from the relevant date under provisions of Section 11 AC of Central Excise Act, 1944 read with the provisions of Section 11AB of the Central Excise Act 1944. - There would be no change in the penalty imposed on the appellant under Rule 25 of Central Excise Rules 2002 - Decided against assessee.
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2015 (10) TMI 1290
MODVAT Credit - cum duty benefit - penalty under Rule 173Q - manufacturing of corrugated galvanised sheet from plain galvanised sheet - held that:- The order of the Commissioner was not set aside, the matter was sent back only for redetermination keeping in view the cum duty benefit and extending the benefit of modvat credit. In view of the said factual position and keeping in view the Explanation 1 of the Section 11AA as also the observation of the Hon'ble Bombay High Court [2009 (10) TMI 257 - BOMBAY HIGH COURT ], we are of the view that the appellant is required to pay interest under Section 11AA on the redetermined duty with reference to the date of passing of the first order and not with reference to the passing of impugned order till the date of payment of the said amount As far as the question whether corrugated steel sheets amounts to manufacture or not it has been consistent stand of the Tribunal as also the P&H High Court that the said activity amounts to manufacture. Appellant has not been able to produce any judgment taking a contrary view. The fact that the issue has been remanded by the Hon'ble Supreme Court in the case of Vardhaman Industries Ltd. (2008 (3) TMI 51 - SUPREME COURT) is in different context and in any case the Hon'ble Supreme Court has not said that the corrugation will not amount to manufacture. Moreover, we find that the said judgment is of 2008 while the dispute in this case pertains to the period of 1997. No judgement passed during 1996 or 1997 has been produced to support the contention. - However, penalty is reduced - Decided in favour of assessee.
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2015 (10) TMI 1289
Denial of refund claim - Restriction on utilization of cenvat credit for delayed payment of duty according to the provisions of Rule 8 (3A) - duty was initially debit to Cenvat account, but later paid in cash - held that:- Revenue has simply alleged fraud/forgery but the same has not been conclusively held nor any inquiry initiated into the same. In view of the fact that the amount in default for the month of April, May and June 2007 was paid on 24/09/2007 and on 01/10/2007, I hold that the relevant date, for the claim of refund under the provisions of Section 11B is 24/09/2007 I hold that the learned Commissioner was in error for rejection of refund on the ground of limitation and the balance on the ground of mischief on the part of the appellant or its staff. Thus, the impugned order is set aside and it is held that the appellant is entitled to take Cenvat credit of the amount of ₹ 1,81,356/- which is admittedly paid through PLA, the second time along with interest - Decided in favour of assessee.
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2015 (10) TMI 1265
Clandestine manufacture and removal of goods - Imposition of penalty - Section 35F - Held that:- Appellant had purchased the Dyed Fabrics from the said Company on the basis of challans and bills. It is also seen from the records that the statements of the traders were recorded. In this context, we refer the statement dt.12.03.2003 of Shri Ajay H. Shah, Authorised Signatory of M/s Hemen Textile, where he stated that they were engaged in the manufacturing of Grey Fabrics and they purchased Polyester Died Yarn/Textured Yarn/Twisted Yarn for manufacture of Grey Fabrics from the said Company. He confirmed that they have received the goods only under the cover of delivery challans and Bills. He produced the Xerox copies of delivery challans and bills to the investigating officer. It is noted that all statements are mostly similar in nature. - there is no material available on record that the Appellants had knowledge of the non-duty paid character of the goods. It is seen from the records that the Appellant as per the normal trade practice, purchased the goods with bills and challans from the said company. In view of that, we find that the imposition of penalty under Rule 209A of Central Excise Rules, 1944 on the Appellants/Traders cannot be sustained. It is seen that the Appellant in his statements dt.08.06.2001 and 29.03.2003 had categorically admitted that they were preparing parallel invoices on computer and quantity of goods mentioned therein were sold without payment of duty, without accounting of the same in their Central Excise statutory records. He also admitted that he had knowingly indulged himself in illicit clearance and removal of Dyed Polyester Yarn without payment of duty, without issuing Central Excise invoice and without accounting for in statutory records. We find that the Appellant was directly involved in the clandestine removal of the goods. It is also noted that that the Appellant Company had not complied with the stay order passed by this Tribunal. Hence, the imposition of penalty on Shri Ketan M. Shah is justified. - Decided partly in favour of assessee.
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2015 (10) TMI 1264
Determination of Annual Capacity of Hot Re-rolling Mills - Held that:- The present issue is identical to the one dealt by Hon'ble Apex Court [2011 (7) TMI 10 - SUPREME COURT OF INDIA] and Hon'ble Madras High Court in the decisions cited (2014 (11) TMI 493 - MADRAS HIGH COURT). The issue needs to be remanded to the adjudicating authority and he is directed to follow the guidelines of Apex Court and High Court order and the directions contained in the Tribunal's order dt. 24.2.2015 in a batch of appeals - Decided in favour of assessee.
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2015 (10) TMI 1263
Denial of CENVAT Credit - whether the appellants are entitled to credit on the duty paid on bright bars used as inputs - Held that:- The Tribunal in the precedent case held that the appellants therein are entitled to avail credit on the excise duty paid on the inputs. The Tribunal in that case has taken the view that as appellants have discharged the duty liability on their final product after availing credit, there is no justification to deny the same. If the supplier who supplied the goods is allowed credit even though the finished product is not an excisable commodity I cannot find any reason to deny the credit to the appellants who have received the goods by paying the duty. In CCE, Hyderabad vs. Deepthi Formulations Ltd [2013 (3) TMI 547 - CESTAT BANGALORE] the Tribunal has taken the view that when the input is received in the factory and used in or in relation to manufacture of final product and payment of duty is evidenced by the invoices the credit cannot be denied. The question whether the input is a result of a process of manufacture is irrelevant. What is relevant is whether duty has been paid or not on such input - impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1262
Excisability of product - whether the paper scrap and BOPP film scrap arising during the course of manufacturing of cigarettes can be held to be excisable or not - Held that:- Even though the said scrap is being sold by the appellant but the same cannot be held to be excisable and hence dutiable - issue stands covered by the decision in M/s. VST Industries Ltd. Vs. CCE, Hyderabad-II - Impugned order set aside - Decided in favour of assessee.
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2015 (10) TMI 1261
Denial of credit on dumpers and its parts - denial on the ground that these are neither inputs nor capital goods - held that:- dumpers and excavators are used in mines for, or in connection with, mining of limestone, one of the raw materials required for manufacture of cement. Mines in which capital goods were used being integrally connected with the cement factory, these capital goods should also be considered to have been used for processes integrally connected with manufacture of final product. Further in Jindal Steel & Power Ltd. Vs.CCE, Raipur, the Tribunal [2015 (10) TMI 983 - CESTAT NEW DELHI], has allowed credit on JO Trucks specially designed for transporting goods within the factory premises. The Apex Court in Vikram Cement vs. CCE-[2006 (2) TMI 1 - Supreme court] has held that Modvat/Cenvat credit is admissible on capital goods used in mines if mines are captive mines so that they constitute one integrated unit together with the concerned cement factory - denial of credit on the excise duty paid on dumpers and parts thereof is unjustified. - Decided in favour of assessee.
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2015 (10) TMI 1260
Waiver of pre deposit - Penalty u/s 11AC - Held that:- Commissioner while directing pre-deposit has recorded reasons. At this stage keeping in view the recent trend in disposing stay application, it would be appropriate to direct the Applicant to deposit further amount of ₹ 2.10 Lakhs, taking into consideration that they have already deposited an amount of ₹ 2.00 Lakhs during the course of adjudication proceeding. In the result, the applicant is directed to deposit ₹ 2.10 Lakhs within a period of eight weeks from the communication of this order and report compliance on 24.9.2015. On deposit of the said amount, pre-deposit of balance dues adjudged would be waived and its recovery stayed during the pendency of the appeal. Failure to deposit the said amount would result in dismissal of the Appeal without further notice. - Partial stay granted.
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2015 (10) TMI 1259
Waiver of pre deposit - Clandestine removal of goods - Imposition of penalty - Held that:- Managing Director has admitted about the clandestine removal of goods during the month of August 2008 to Sri John of Erode and Sri Balu of Salem in his statement. Further, the allegation was clearly corroborated with very huge consumption of electricity and electricity charges paid to TNEB. The counsel's reliance on the Hon'ble Supreme court [2011 (1) TMI 1302 - Supreme Court of India] and the Hon'ble High Court of Madras pertaining to sales tax is not relevant to the present case. Therefore, the appellants have failed to make out a prima facie for waiver of predeposit of entire dues. - Partial stay granted.
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2015 (10) TMI 1258
Refund claim - Cash refund of CENVAT Credit - whether appellant M/s Tirupati LPG Industries Ltd. is entitled to cash refund of Cenvat credit lying in their RG-23A Pt. II. - Held that:- credit taken by the appellant was not required to be reversed when the final products became exempted and that cash refund of the same is admissible to the appellant. - Decision in the case of CC & CE, Meerut - I vs. Janardhan Plyboard Industries Ltd. [2011 (10) TMI 38 - UTTARAKHAND HIGH COURT] followed - Decided against Revenue.
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2015 (10) TMI 1257
Condonation of delay - Notice of hearing not served - Held that:- On close reading of Section 37C of the Act, it is clear that as per Clause (a) Section 37C(1) the order shall be served by Registered Post with Acknowledgement Due to the person, for whom it is intended. As per Clause (b) of Section 37C(1), if the orders cannot be served in the manner provided in Clause (a) of the said Section, then the order would be affixed at the conspicuous part of the factory. In the present case, it is admitted position that the order was not served as per Clause (a) of Section 37C(1) of the said Act and therefore, the service of the order is not legal and proper. - it is a fit case for condonation of filing of appeal. - main contention of the learned Advocate on behalf of the Appellants is that they could not file the reply to the Show Cause Notice and no proper opportunity of personal hearing was granted. On perusal of the impugned orders, we find that no personal hearing notice was issued in terms of Section 37C(1)(a) of Central Excise Act, 1944. It is observed by the Adjudicating authority that the notice of hearing was affixed at the factory gate. We also notice that the Appellant vide letter dt.10.12.2007 informed the change of address. The learned Authorised Representative for the Revenue submits that the said letter is in respect of de-bonding of the goods. In our view, the Appellants informed the change of address and it will be applicable in all respects. - Decided in favour of assessee.
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2015 (10) TMI 1256
Denial of CENVAT Credit - Imposition of interest and penalty - Held that:- Para 4 of the show-cause notice makes allegation that there was utilisation of Cenvat credit of ₹ 9,14,269/- of Additional Duty of Customs taken. But taking of such credit is not permissible. In the case of Bombay Dyeing(supra) , it was the observation of the Supreme Court that unless the credit is utilised there shall be no payment of interest. But such proposition of law was not cited before apex court while deciding the case of Indswift . For no utilisation of Cenvat credit, there shall not be payment of interest. Therefore, learned Adjudicating authority is directed to make a limited exercise to verify the quantum of the credit utilised and calculate interest thereon and direct the appellant to pay the same. The payment of interest shall be subject to adjustment if any already paid by the appellant. Therefore, the matter is remitted back to the learned Adjudicating authority to grant fair opportunity of hearing to the appellant on such limited count. - Since there is confusion in law as to the admissibility of the credit and also utilisation thereof, there shall not be penalty. - Appeal disposed of.
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2015 (10) TMI 1255
Penalty of ₹ 15,000/- under Rule 27 of Central Excise Rules, 2002 - contravention of Rule 12(2A) (a) of Central Excise Rules, 2002 - Held that:- Rule 27 of Central excise Rules, 2002 prescribe maximum penalty of ₹ 5000/-. Therefore there is no limit for imposing penalty on lower side. In these circumstances, I restrict the penalty for contravention of each Rule for several occasions up to ₹ 5,000 - Appeal disposed of.
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2015 (10) TMI 1254
Denial of CENVAT Credit - Capital goods - Held that:- when the queries were raised to the respondent, it was replied by the respondent that these items have been used by the respondent for fabrication of induction furnace (Capital goods). This fact has not been disputed by the Revenue either in the show cause notice or during adjudication. In these circumstances, I observe that Ld. Commissioner (A) has verified the facts of the case and allowed Cenvat Credit correctly to the respondent. With these observations, I do not find any infirmity with the impugned order. - Decided against Revenue.
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2015 (10) TMI 1253
Waiver of pre deposit - clandestine removal of LABSA - Held that:- present demand relates to clearance of goods without payment of duty. Prima facie, on going through the order we find that the ld.Commissioner has recorded findings after analyzing the evidences adduced by both sides supported by reasons. The correctness of this order and analysis of evidences would be carried out at the time of disposal of the appeal. At this stage, the offer to deposit 7.5% of the confirmed demand seems to be reasonable. Consequently, the Applicant No.1 is directed to deposit 7.5% of 2.48 Crores within a period of eight weeks - Partial stay granted.
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2015 (10) TMI 1252
CENVAT Credit - Manufacturing activity - conversion of round bars into bright bars - Held that:- Tribunal in Ajinkya Enterprises vs. CCE, Pune-III-[2013 (6) TMI 610 - CESTAT MUMBAI] along with other judgements placed reliance on Super Forgings and Steel Ltd. Vs. CCE, Chennai-[2007 (7) TMI 77 - CESTAT, CHENNAI] and observed that once duty on the final products has been accepted, credit cannot be denied even if the activity does not amount to manufacture. - Counsel for the respondent and conceded by the Departmental Representative that on the very same issue, in the assessees own case, this Tribunal [2015 (1) TMI 292 - CESTAT NEW DELHI] (In the case of M/s.R.B.Steel Services, Shri Mahavir Bright Steel Udyog and Punch Ratna Steel Pvt.Ltd. vs. CCE, Rohtak) has held in favour of the respondents. - No infirmity in the impugned order. The same is upheld - Decided against Revenue.
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2015 (10) TMI 1251
Confiscation of goods - Clandestine removal of goods - Imposition of redemption fine and penalty - Held that:- Facts which are coming in my knowledge is that appellant is manufacturer of bushes and it is the contention of the appellant that their daily production is about 9000 to 10000 pieces of bushes per day. From the records, it is not clear that how much is the production of the appellant per day and the contention of the appellant that they are manufacturing 9000 to 10000 pieces of bushes has not been contraverted by the Revenue with any cogent evidence. In the absence of any cogent evidence, the allegation is merely based on assumption and presumption and that excess stock found is meant for clandestine removal. Infact charge of clandestine removal is serious charge.It should be supported by some evidence which is absent in this case whereas the appellant has taken a defense that they are manufacturing 9000 to 10000 pieces per day and they are entering the quantity manufactured in a day at the end of the day. In these circumstances, without ascertaining the production of the day, from the records, the demand against the appellant is not sustainable. Hence goods are not liable for confiscation and thus question of imposition of redemption fine and penalty does not arise. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1250
Duty demand - Clandestine removal of goods - Held that:- There is no evidences at all which have been recovered from the appellants regarding any alleged clandestine removal.There is also no confessional statement from the appellants in this regard.The entire impugned demand has been confirmed and penalties imposed merely on the basis of incriminated documents recovered from M/s. Monu Steel. In the case of Rutvi Steel & Alloys Vs. Commissioner Central Excise, Rajkot [2009 (7) TMI 231 - CESTAT, AHMEDABAD] the CESTAT held that entries in the diary of a third party are insufficient to sustain clandestine removal. In this case also, there is no evidence on record to confirm the demand except the incriminating documents recovered from M/s. Monu Steels.Therefore, relying on the decision of this Tribunal in the case of Rutvi Steel & Alloys (supra), the allegation of clandestine removal is not sustainable. Consequently, the demand confirmed in the impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1249
Denial of CENVAT Credit - specified inputs and capital goods - Contravention of Rule 4(1), 6 & 9 of Central Excise Rules, 2002 - benefit of exemption Notification No.30/2004-CE, dt.09.07.2004 - Held that:- issue is no more res integra in view of the decision of the Tribunal in the case of Bhilosa Industries Pvt.Ltd. (2014 (10) TMI 809 - CESTAT AHMEDABAD). - Following this decision. impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1248
Waiver of pre dpeosit - Mandatory pre deposit - Section 35F - Held that:- Taking into account that appellants have predeposited the mandatory penalty by debiting in RG-23 Account and also taking into account further debit of an amount of ₹ 9,434/- (2.5% of the demand) as predeposit before this Tribunal, we are of the view that appellants have complied with the predeposit whereas the Commissioner (Appeals) dismissed the appeal for non compliance of interim order and not decided the issue on merits. The delay in making pre-deposit payment before Commissioner (Appeals) is condoned. The appeal is remanded to Commissioner (Appeals) to hear the case on merits after affording an opportunity of hearing to the appellant and pass orders in accordance with law. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1247
Admissibility of CENVAT credit - Imposition of interest and penalty - Held that:- It is observed from the case laws relied upon by the appellant that the issue of admissibility of CENVAT credit on the impugned items was disputable. Which was settled by CESTAT Larger Bench in the case of M/s Vandana Global Ltd. (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)). When the issue is disputable, and divergent views were expressed by the Courts then it cannot be said that appellant had any intention to evade any duty or deliberately took wrong CENVAT credit. Under the present facts and circumstances extended period of demand cannot be made applicable. The period of dispute is from October 2007 to February 2009, whereas the Show Cause Notice was issued on 22.06.2010, which is clearly beyond the normal period of one year under Rule - 14 of the Cenvat credit Rules, 2004 readwith Section 11 A of the Central Excise Act, 1944 - appellant is allowed only on limitation in raising demand without expressing any views on the merits of admissibility of CENVAT credit - Decided in favour of assessee.
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2015 (10) TMI 1246
Denial of exemption under Notification No.10/97, dated 01.03.1997 - Held that:- Adjudicating authority in his order dated 08.03.2001 examined the issues in detail and allowed the exemption under Notification No.10/07, as the appellant produced the relevant certificate from the Regional Director BARC/CAT. In the appellants own case, for the later period, on an identical issue, this Tribunal vide its order dated 11.062012 has held the decision in favour of the appellant - Since the issue in the present case is also identical to the issue, in the appellants own case, for an earlier period 1999-2000, the impugned order is set aside by following the Tribunals judgment (2012 (6) TMI 732 - CESTAT CHENNAI) - Decided in favour of assessee.
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2015 (10) TMI 1245
Waiver of pre deposit - removal of MS ingots clandestinely without payment of duty - Held that:- Considering that the applicant had already deposited ₹ 10.00 Lakhs and offers to deposit further an amount of ₹ 10.00 Lakhs, which in our opinion is sufficient to hear the appeals. Consequently the Applicant M/s. Atlanta Commodities is directed to deposit ₹ 10.00 Lakhs within a period of eight weeks from today and report compliance on 03.09.2015. On deposit of the said amount, pre-deposit of balance dues adjudged against M/s. Atlanta Commodities Pvt.Ltd. and the entire penalty against Shri Bharat Bhushan Sachdeva would stand waived and its recovery stayed during pendency of the appeal. It is made clear that failure to deposit the amount by M/s.Atlanta Commodities would result in dismissal of both the appeals without further notice. - Partial stay granted.
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2015 (10) TMI 1244
Undervaluation of goods - Penalty under Rule 26 of the Central Excise Rules, 2002 - Held that:- After the decision of the Tribunal in the case of M/s Ravi Kiran Plastics Pvt. Ltd. (2014 (2) TMI 211 - CESTAT AHMEDABAD), where the appellant was party, the penalty imposed on the appellant cannot be sustained. However, the Tribunal remanded the appeal of the manufacturer against the impugned order to the Commissioner (Appeals) to decide on merit, so, it is appropriate, the matter should be remanded to the Commissioner (Appeals) to decide alongwith the appeal of the manufacturer. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1243
Duty demand - Shortage of goods - Held that:- The case revolves around mainly w.r.t the quantification of grey fabrics on the date of visit (24.05.2002) of the officers of Central Excise. It is observed from the Panchnama drawn during the visit of the Officers that the same was carried out far 3 days on 24/25/26-05-2002. Respondent has brought certain facts to the notice of the first appellate authority, explaining their view point on the issue, that quantity ascertained during the course of Panchnama was incorrect. He produces during the course of hearing before the Bench, certain letters of grey fabrics returned to Superintendent of Central Excise indicating returns of grey fabrics to the parties from where the grey fabrics was received. It is not coming out from the records, whether these details were submitted before the Adjudicating Authority or the first appellate authority. In the interest of Justice Appeal filed by the Revenue against the appellant M/s Roopa Dyg & Ptg Pvt Ltd., is required to be allowed by way of remand to the Adjudicating Authority for reconciling the data submitted by the Respondent alongwith the documents. Needless to say that Adjudicating Authority will grant personal hearing to the appellant to explain their case during remand proceedings. As the period involved in this appeal is May, 2002, therefore, it is directed that the remand proceedings may be completed within a period of 2 months from the date of receipt of this order. - Matter remanded back - Decided in favour of Revenue.
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2015 (10) TMI 1242
Evasion of duty - Clearance of goods to sister concern - Duty paid under protest - Unjust enrichment - Adjustment of excess duty - Held that:- it is a case of inter-unit transfer of the goods of the appellant’s own company. In some cases, the appellant paid excess duty and there was short payment of duty of the amount of CAS-4. The Tribunal in the case of M/s Devi Thread Processors Pvt. Ltd. (2015 (3) TMI 429 - CESTAT CHENNAI) following the decision of the Tribunal in the case of Bajaj Tempo Ltd. vs Commissioner of Central Excise, Pune [2004 (7) TMI 145 - CESTAT, MUMBAI] held that as there was no sale of the goods involved and the appellant cleared the goods to the raw material supplier on job work basis on conversion charges, it was directed adjustment of excess/short payment of duty made by the appellant. The case of Kalyani Ferrous Industries (2005 (3) TMI 570 - CESTAT, NEW DELHI) would not be applicable in this case, as there was sale of goods - Adjudicating Authority to adjust the excess payment of duty against the short payment of duty and thereafter, the refund/demand of duty would be decided, after considering the payment of interest, if any, in accordance with law - Appeal disposed of.
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2015 (10) TMI 1241
Clandestine manufacture and removal of goods - Imposition of penalty - Held that:- It is observed that appellant requested for cross examination of the panch witnesses, which was not granted. As per Para 11.12 of the O.I.A. Dated 19.04.2011 a Report was called by the appellate authority from the Jurisdictional Assistant Commissioner. Jurisdictional Assistant Commissioner in his letter Dated 06.04.2011 stated that the affidavits filed were as a result of afterthought. Statement of Shri Hitesh Pathak and statement of Shri Chetan R. Dhruv, Managing Director Dated 16.11.2005 etc., have been mentioned in the observations of the first appellate authority. It is the case of the appellant that all these statements were not relied upon statements in the Show Cause Notice therefore, the same cannot be made the basis for deciding the case. It is observed that there has been a violation of the principles of natural justice for which the case is required to be remanded back to the Adjudicating Authority with the directions that all the statements mentioned in the findings of the first appellate Authority’s order dated 19.04.2011, and not mentioned in the Show Cause Notice, should be made available to the appellants for defending their case properly. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1240
Availment of deemed credit - Notification No. 52/2001-C.E. (N.T.) Dated 29.06.2001 - Balance lying in CENVAT Credit account - Held that:- in view of the decision of the Hon’ble Gujarat High Court in the case of Commissioner of Central Excise, Ahmedabad-II vs Omkar Textile Mills Pvt. Ltd. [2008 (9) TMI 860 - GUJARAT HIGH COURT] and the decision of the Tribunal in the case of Commissioner of Central Excise, Ahmedabad vs Bajaj Processors Pvt. Ltd. [2009 (6) TMI 850 - CESTAT, AHMEDABAD]. The Hon’ble Gujarat High Court in the case of Omkar Textile Mills Pvt. Ltd. (supra) held that deemed credit earned by the assessee upto 31.03.2003 before withdrawal of deemed credit scheme, can not be lapsed. - No reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.
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2015 (10) TMI 1239
Imposition of penalty u/s 11AC - Shortage of goods - Held that:- So far as not extension of option of 25% reduced penalty under Section 11AC of the Central Excise Act, 1944 is concerned, it is observed from the O.I.O. Dated 21.05.2012 that no such option has been extended to the appellant by the adjudicating authority. In view of the settled proposition of law on this issue option of 25% reduced penalty is extended to the appellant under Section 11AC of the Central Excise Act, 1944, if the same is paid within 1 month from the receipt of this order. - Penalty of ₹ 25.000/- imposed upon the Director is reduced to ₹ 10,000.
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2015 (10) TMI 1238
Denial of CENVAT Credit - Credit documents - Held that:- It is the case of the appellant that the corrected copies of the cenvat documents were produced before the lower authorities. However, on perusal of case records, it is observed that no such mention is made in the findings of the orders passed by the lower authorities. However, the claim of the appellant that corrected documents were produced by the appellant before the lower authority which makes credit admissible as per proviso to Rule 9(2) of the cenvat Credit Rules 2004. This aspect can only by verified by the Adjudicating Authority whether discrepancies noticed initially were rectified or not as per Proviso to Rule 9(2) of the Cenvat credit Rules. The matter is, therefore, required to be decided by the Adjudicating Authority in remand proceedings. Appeal filed by the appellant is allowed by way of remand to the Adjudicating Authority. Needless to say that the appellant shall be given an opportunity to explain their case regarding rectification of discrepancies before deciding the appeals in denevo proceedings. - Decided in favour of assessee.
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2015 (10) TMI 1237
Penalty under Rule 25 read with Section 11AC - Bonafide belief - Held that:- Appellant in this proceeding is not contesting the chargeability of duty on Spent Earth. It is observed from the Honble Apex Court judgement in the case of CCE, Chandigarh I vs Markfed Vanaspati and Allied Industries Ltd (2003 (4) TMI 98 - SUPREME COURT OF INDIA) that the issue of chargeability of duty on spent earth was settled by the Apex Court. In view of this judgement and bonafide belief on the part of the appellant that no duty liability is attracted on spent earth even after amendment of Section 2(f) of the Central Excise Act 1944. The case law of CCE Jalandar I vs AG Flats Ltd (2011 (7) TMI 968 - CESTAT, NEW DELHI) passed in 2012 makes it clear that there was chargeability of duty on the bye product. The appellant during the period May 2008 to May 2009 may not have any to malafide intention to evade payment of Central Excise duty when by the judgement of Apex Court in the case of CCE Chandigarh I vs Markfed Vanaspati and Allied Industries Ltd (supra) it was held that spent earth is not by an act of manufacturer - penalty imposed by the lower authorities under Rule 25 of the Central Excise Act of 2002 read with Section 11AC of the Central excise Act 1944, is not sustainable and is required to set aside - While confirming the demand of duty, penalty sete aside - Decided partly in favour of assessee.
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2015 (10) TMI 1236
Denial of CENVAT Credit - whether CENVAT credit on the capital goods is admissible to the appellant when depreciation claimed under the Income Tax Act, 1961 initially was subsequently reversed by filing revised income tax returns - Held that:- It is observed from the relied upon case laws that this issue has been settled by series of case laws including order passed by this bench in the case of Commissioner of Central Excise, Surat-I vs Utsav Silk Mills [2009 (1) TMI 654 - CESTAT, AHMEDABAD]. - In view of the above settled proposition of the law the present appeal filed by the appellant is covered by the relied upon case law and is accordingly allowed with consequential relief - Decided in favour of assessee.
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2015 (10) TMI 1235
Denial of Exemption claim - Non maintenance of separate account - Rule 6(2) of Cenvat Credit Rules 2004 - Held that:- During the intervening period they were having sufficient balance in their Cenvat Credit account to meet the liability of duty confirmed by way of adjudication order. If it is so then interest is not payable by the appellant as held by the Hon'ble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. (2011 (4) TMI 969 - KARNATAKA HIGH COURT). Therefore, demand and interest is set aside. The contention of the appellant that they have not paid the amount of 10% of the value of exempted final product and taken Cenvat Credit twice wrongly under bonafide belief is not acceptable as appellant are manufacturing excisable goods and when they are clearing exempted final product from their factory they are required to pay 10% of the value of the said goods. These provisions are very clear. Therefore, penalty under section 11AC is rightly imposed on the appellant and same has been reduced by the Ld. Commissioner to the extent of 25% of the duty as they have paid the entire amount of duty before issuance of show cause notice. - Decided partly in favour of assessee.
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2015 (10) TMI 1234
Reversal of Modvat credit - benefit of exemption Notification No. 29/2004-CE dated 09.7.2004 as well as Notification No. 30/2004-CE dated 09.7.2004 - Held that:- Supreme Court upheld the decision of Hon'ble Gujarat High Court [2008 (9) TMI 87 - HIGH COURT GUJARAT], and reported at [2009 (3) TMI 975 - SUPREME COURT], it has been held that the reversal of credit would amount to non-availment of credit under Notification No. 30/2004-CE. So, we do not find any reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.
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2015 (10) TMI 1233
Denial of CENVAT Credit - Whether CENVAT credit with respect to services of membership of club is admissible under Rule 2(l) of the Central Excise Rules, 2004 or not - Held that:- Appellant has relied upon the case of BCH Electric Ltd. vs Commissioner of Central Excise, Delhi-IV [2013 (9) TMI 551 - CESTAT NEW DELHI], wherein it has been held that services of club membership of India International Centre and IEEMA New Delhi, are admissible as CENVAT credit - CENVAT credit has been a rightly claimed by the appellant as the activities provided are in relation to manufacturing the products of the appellant. So far as taking of CENVAT credit after registration for the earlier period is concerned, it is relevant to mention that once there is a nexus between the services received and the manufacturing activity undertaken by the appellant minor Procedural Lapses / Irregularities cannot be held to be any adverse effect on taking CENVAT credit. It is observed from the activities of Gujarat State Federation of Co-up. Sugar Factories Ltd., that service provider is providing technical support and guidance to the members for expansion renovation and modernization of the units and also assist to undertaken research work for better quality of Sugar etc. - Decided in favour of assessee.
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2015 (10) TMI 1232
Maintainability of appeal - Monetary limit - Held that:- Impugned order was passed by the Commissioner (Appeals) under Section 35A which is specified under Clause (b) of sub-section (1) of Section 35B. In view of Second proviso to Section 35B (1), this Tribunal has discretion to refuse of to admit the appeal in respect of order referred to clause (b) or clause (c) or clause (d) where amount of duty, amount of fine or penalty determined by such order does not exceed ₹ 50,000/- (before 6/8/2014) and ₹ 2 lakhs (on or after 6/8/2014) - Appeal is dismissed only on the ground that amount is below threshold limit of ₹ 50,000/- without going into merit of the case - Decided against the assessee.
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2015 (10) TMI 1230
Imposition of penalties - Rule 26 of the Central Excise Rules, 2004 - improper credit on the CVD paid on inputs at the time of import - Held that:- In view of the settled proposition of law [2013 (12) TMI 749 - CESTAT NEW DELHI] for taking improper CENVAT credit on imported goods no penalty can be imposed upon individually under Rule 26 of the Central Excise Rules, 2002. - Decided in favour of assessee.
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2015 (10) TMI 1229
Denial of CENVAT Credit - appellant cleared the input as such to their sister unit on payment of Central Excise duty equivalent to the amount of credit availed on such input - Held that:- Respondents were engaged in the manufacture of excisable goods under Chapter No 28, 29 and 38 of the Schedule of the Central Excise Act, 1985 and availed Cenvat Credit on input. During the period November 2002 to June 2003, the appellant cleared the input as such to their sister unit on payment of Central Excise duty equivalent to the amount of credit availed on such input. We find that the Tribunal in the case of Silvasa Machines vs Commissioner of central Excise, Vapi [2012 (11) TMI 772 - CESTAT, AHMEDABAD] decided the issue in favour of the appellant - No reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.
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2015 (10) TMI 1228
Extension of stay order - Held that:- Any stay order passed by the Tribunal, if it is in force beyond 07/08/2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension of orders granting stay either fully or partially - Decision in the case of M/s. Venketeshwara Filaments Pvt. Ltd. & Ors. Vs. CCE & ST., Vapi [2014 (12) TMI 227 - CESTAT AHMEDABAD] followed - Stay extended.
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2015 (10) TMI 1227
Duty evasion - Clandestine removal of goods - Concession of penalty - Held that:- appellate authority both in respect of shortage of goods and removals made as exhibited by chits discovered and entries found in the note books demonstrated unaccounted removal of goods resulting in evasion of duty. Therefore, demand of duty was confirmed. In such circumstances, no question of concession in penalty arises since that would encourage evasion. This can be said following the decision of the Hon’ble High Court of Bombay in the case of Commissioner of Central Excise & Customs, Aurangabad Vs Padmashri V.V. Patil S.S.K. Ltd., reported in [2007 (7) TMI 6 - HIGH COURT, BOMBAY]. Therefore, adjudication order is restored dismissing appeal of M/s. A.P. Steels and Revenue appeal is allowed restoring the adjudication order insofar as the penalty is concerned. - Decided against Revenue.
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2015 (10) TMI 1226
Valuation - Payment of duty on dutiable and exempted final product - whether the transportation charges and loading/unloading charges would be included in the price of exempted goods for payment of 8% of the amount under Rule 6 of the CENVAT Credit Rules, 2004 - Held that:- Tribunal in the case of Areva T&D India Ltd (2009 (7) TMI 1127 - CESTAT CHENNAI) held that freight and insurance charges do not form part of the assessable value for the purpose of payment of 8% amount in terms of Rule 6(3) of the said Rules, 2004. The Rule was amended on 01.04.2008. On a query from the Bench, the learned Advocate submits that the present case relates to prior to 01.04.2008. The learned Authorised Representative for the Revenue relied upon the decision of the Tribunal in the case of Timex Watches Ltd Vs CCE Noida - [2004 (8) TMI 204 - CESTAT, NEW DELHI]. We find that the Tribunal in the case of Areva T&D India Ltd had analised this issue in detail - demand of duty alongwith interest and penalty cannot be sustained. Accordingly, the impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1225
Export of goods - Denial of the benefit of notification No. 42/2001 CE (NT) dated 26.6.2001 - Failure to comply with the supplementary instructions issued by CBEC in respect of availment of exemption under Notification No. 42/2001 - whether the supplementary instruction issued by CBEC are mandatory for the appellant to comply with to avail benefit of notification No. 42/01 - Held that:- in the case of Minwool Rock Fibres Ltd.(2012 (2) TMI 289 - SUPREME COURT OF INDIA ) also the Hon'ble Apex Court held that departmental circular arc not binding on the assessee, quasi judicial authorities and courts and therefore, in that view of the matter, circular /instructions issued by Board would not assist them. Admittedly, in the case of supplementary instructions which have been issued by CBEC and the notification No. 42/01 ibid both have been issued by Central Government and in the said notification there is no such condition. Therefore, appellant is not required to fulfill the condition imposed on him by way of supplementary instructions. In that view of the matter, I hold that appellant has complied with the conditions of the Notification(ibid). Therefore, appellant is entitled to avail exemption under said notification. Consequently, impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1224
Denial of refund claim - duty paid on the intermediate product cleared to their buyers - Unjust enrichment - Held that:- LAA in the impugned order dealt the issue in detail and also relied on the apex court's judgment in the case of Sahakari Khand Udyog Mandal Ltd. Vs CCE [2005 (3) TMI 116 - SUPREME COURT OF INDIA]. He also relied Tribunal's Larger Bench decision in the case of SRF Ltd. Vs CC Chennai [2005 (5) TMI 91 - CESTAT, NEW DELHI]. The appellant failed to produce any evidence that the duty incidence is not passed on to the customers. I find that the burden of proof is on the appellant to establish unjust enrichment particularly when the amount is shown in the books of accounts as 'written off'. Since the issue of unjust enrichment stands settled by the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. and the Tribunal's Larger Bench SRF Ltd. (supra) and LAA has followed the Apex Court decision. Therefore, I do not find any infirmity in the impugned order - Decided in favour of assessee.
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2015 (10) TMI 1223
Refund claim - unutilized accumulated balance of Cenvat Credit - DTA clearances - Rejection of claim u.s 11B - Held that:- appellant is an export oriented unit not required to discharge any Excise duty on the goods exported by them. It is also undisputed that appellant had debited the Cenvat account for discharge of duty liability on the goods cleared for export. The refund claim filed by the appellant was also rejected on the same grounds; the findings are not contested by both sides. If it is so, the revenue authorities holding that the amount debited by the appellant on goods cleared for export is without any authority of law. Natural corollary would be the amount should be returned back to appellant, as revenue authorities can collect tax/duty only by authority of law. In the case in hand, from the records, it transpires that appellant though having filed refund claim, subsequently withdrew the same, with a request to lower authorities, seeking permission to recredit the amount in their Cenvat account; this legitimate request of the appellant is also dismissed by the lower authorities. In my view, the lower authorities have erred in passing the order of rejecting the request of re-credit of the amount paid by the appellant and not due to the government. To me, the impugned order is not in consonance with the law settled by the higher judicial forums, holding that duty collected without authority of law cannot be retained by the government. - Decided in favour of assessee.
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2015 (10) TMI 1222
Reversal of CENVAT Credit - Capital goods - Job work - Held that:- These units exclusively carry out the job work only for the appellants. The Rule 4 (5) (a) of CCR provides for supply of capital goods for job work for manufacture of intermediate goods with the condition that it should be returned within 180 days failing which appellants have to pay equivalent amount of credit availed on the capital goods. It is seen from the worksheet submitted by the appellants, out of 13 machines, 5 machines listed at Sl.No.6,7,8,9 & 13 were returned and subsequently cleared to new plant on payment of duty and remaining 8 were installed in Unit II (5 nos.) and Shop-II (3 nos.) of the appellant. I find from letter dt.1.2.2011 addressed to the Commissioner of Central Excise, Chennai IV wherein they have requested for inclusion of the premises of Shop-II with the appellants main unit which is still pending .Prima facie, I find that the main unit and the two units belong to the appellant and exclusively used for carrying out job work only for them. - capital goods credit which are installed in the captive mines are eligible for the entire capital goods credit even though they are located outside the factory. In the present case, there is no dispute that these two units belong to them and exclusively doing the job wok for main unit and they are not independent job workers. Therefore, by respectfully following above Apex Court decision and considering the fact that there was no recovery mechanisms built in CCR for recovery of capital goods credit prior to 1.3.2013, I hold that appellants are eligible for capital goods credit installed at their own units for job work purpose. - Decided in favour of assessee.
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2015 (10) TMI 1221
Determination of annual capacity of production - Held that:- Issue is no more res-integra, in view of the decision of the Honble Gujarat High Court in the case of Krishna Processors vs Union of India [2012 (11) TMI 954 - GUJARAT HIGH COURT] - Respectively following the decision of the Hon’ble Gujarat High Court in the case of M/s Krishna Processors (supra), we set-aside the impugned order. - Decided in favour of assessee.
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2015 (10) TMI 1220
Refund claim - CENVAT Credit - ower authorities rejected the refund claim relying upon Rule 3(5) of Cenvat Credit Rules, 2004, holding that removal of forklift is as such requires reversal of Cenvat Credit availed. - Held that:- There is no dispute that forklift was removed after use in the factory premises of appellant. Revenue's case of requirement of reversal entire amount of Cenvat Credit availed is an incorrect view. - In view of the foregoing and authoritative judicial pronouncement [2010 (4) TMI 294 - PUNJAB & HARYANA HIGH COURT] on the same issue, the impugned order is liable to be set aside
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2015 (10) TMI 1219
Disallowance of CENVAT Credit - Input used in export of exempted product - Held that:- In the case of Drish Shoes Ltd (2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT ), the question before the Hon'ble Himachal Pradesh High Court was whether an assessee exclusively manufacturing wholly exempted goods chargeable to Nil tariff rate of duty is eligible to avail CENVAT Credit of duty paid on said inputs and input services under Rule 6(1) of the CENVAT Credit Rules, 2002/CENVAT Credit Rules, 2004, used in the manufacture of such exempted goods, even if such goods are exported. The Hon'ble High Court held that an assessee manufacturing the goods chargeable to Nil duty, is eligible to avail CENVAT Credit paid on the inputs under the exception clause to Rule 6 (1) as contained in Rule 6(5) of CENVAT Credit Rules 2002 and Rule 6(6) of CENVAT Credit Rules 2004, used in the manufacture of such goods, if the goods are exported - there is no dispute that the entire goods were exported. Hence, there is no reason to deny the CENVAT Credit to the Appellant. Accordingly, the impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1218
Duty demand - Clearance of free supplies to the wholesale dealers and the distributors - Evasion of duty - Penalty u/s 11AC - Held that:- Commissioner (Appeals) passed the order following the decision of the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Co. Vs CCE Bangalore - [2004 (8) TMI 179 - CESTAT, BANGALORE]. The Larger Bench of the Tribunal in the case of Indica Laboratories Pvt.Ltd Vs CCE Ahmedabad [2007 (5) TMI 19 - CESTAT,AHMEDABAD], held that the decision of the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Co. (supra) has not enunciated the correct position of law. It has been held that the sale is not the necessary condition for charging to Excise duty. Duty becomes payable (unless otherwise exempted) in respect of every removal of excisable goods. - we set aside the order passed by the Commissioner (Appeals) and uphold the demand of duty alongwith interest and set aside the penalty. - Decided partly in favour of assessee.
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2015 (10) TMI 1217
Maintainability of appeal - Section 35B - Monetary limit - Held that:- Impugned order was passed by the Commissioner (Appeals) under Section 35A which is specified under clause (b) of sub-section (1) of Section 35B. In view of Second proviso to Section 35B (1), this tribunal has discretion to refuse of to admit the appeal in respect of order referred to clause (b) or clause (c) or clause (d) where amount of duty, amount of fine or penalty determined by such order does not exceed ₹ 50,000/- (before 6/8/2014) and ₹ 2 lakhs (on or after 6/8/2014). - Appeal is dismissed only on the ground that amount is below threshold limit of ₹ 50,000/- without going into merit of the case. - Decided against assessee.
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2015 (10) TMI 1216
Maintainability of appeal - Non compliance with pre deposit order - Mandatory pre deposit - Held that:- There were four other demands pertaining to the appellant and the total duty involved in all the cases is ₹ 151.87 lakhs and in fact, the assessee's appeal in one of the said cases has been dismissed by this Tribunal. The amount involved in the said case is ₹ 145.50 lakhs and in respect of the remaining three cases, there is neither any stay for recovery nor any other details submitted by the appellant on the stay application that has been filed anywhere. It was further informed that the amount recovered ₹ 36.58 lakhs is against the recoverable amount of ₹ 151.87 lakhs involved in other four cases. Further, as far as the present appeal is concerned, no amount has been appropriated for the simple reason that even in respect of the remaining cases, the total amount is yet to be recovered. - appellant has not deposited the amount of 7.5% as required under Section 35F of the Central Excise Act, 1944 and in view of this factual position the appeal filed by the appellant is not maintainable - Decided against assessee.
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2015 (10) TMI 1215
Extension of stay order - Held that:- Any stay order passed by the Tribunal, if it is in force beyond 07/08/2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension of orders granting stay either fully or partially - Decision in the case of M/s. Venketeshwara Filaments Pvt. Ltd. & Ors. Vs. CCE & ST., Vapi [2014 (12) TMI 227 - CESTAT AHMEDABAD] followed - Stay extended.
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2015 (10) TMI 1214
Levy of NCCD - whether the duty of NCCD is leviable on removal of POY for captive Consumption, and on sale to other 100% EOUs as deemed exports, during 2003-2004 - Held that:- issue is no more res-integra and this Hon’ble Tribunal has held in the case of Filatex India Ltd. vs Commissioner of Central Excise & Service Tax, Vapi [2014 (11) TMI 72 - CESTAT AHMEDABAD] that NCCD is not leviable, where the goods are cleared for export or for captive Consumption. - issue is identical in the present appeal and the above decision of this Hon’ble Bench is squarely applicable. In view of the same, the impugned orders in appeal are set-aside - Decided in favour of assessee.
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2015 (10) TMI 1213
Restoration of appeal - Appeal dismissed for non compliance with pre deposit - Section 35F - Held that:- The order dated 13.03.2013 by which the appeals filed by these three appellants had been dismissed is an ex parte order as the order itself mentions that none was present for the appellants nor there is any adjournment application. Moreover, while separate stay applications had been filed by the above mentioned three appellants along with stay application filed by M/s. Puneet Exports INC, in the order dated 13.03.2013, there is absolutely no direction for these appellants regarding pre-deposit. Para-4 of the stay order dated 13.03.2013 simply directs that the “appellants” to deposit an amount of ₹ 87,44,929/- within four weeks and also clarifies that this order has imposed pre-condition in respect of all these applicants. Hon’ble Delhi High Court in case of Rajinder Gaur Vs. CCE reported in [2013 (6) TMI 58 - DELHI HIGH COURT] in the background of the fact that while the main appellant had been directed to make pre-deposit with the observation that if it was made, other co-appellants were not required to make pre-deposits and there was no direction given that if the main appellant defaulted, other appellants would also be considered as defaulters, the appeals of the other appellants cannot be dismissed for non-compliance and that without dealing with the individual appellant’s case for stay, the Tribunal ought not to have mechanically assumed default and dismissed their appeals - Appeal restored.
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2015 (10) TMI 1212
Extension of stay order - Held that:- Larger Bench of the Tribunal in the case of M/s Haldiram India Pvt.Ltd. & others Vs Commissioner, Central Excise & Service Tax - [2014 (10) TMI 724 - CESTAT NEW DELHI (LB)], held that the Stay Order passed by the Tribunal may be extended after considering the necessary facts as it would authorize the exercise of discretion by the Tribunal for grant of such extension - appeal was not taken for hearing by the Tribunal as there is huge pendency of the appeals. It is noted that lot of appeals have already been listed and therefore it is difficult to take up the appeal hearing at this stage. - Stay extended.
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2015 (10) TMI 1211
CENVAT Credit - Penalty under Rule 25(1) of Central Excise Rules, 2002 - Held that:- Appeal is pertaining to imposition of penalty of ₹ 25 Lakh upon the appellant under Rule 25() of the Central Excise Rules, 2002. It is observed from Para 9 (v) of the Order-in-Original dated 31.08.2012 that entire defaulted amount alongwith interest was paid by the appellant before issue of show cause notice. During the period of default, the duty was being paid by the appellant through CENVAT account - appeal is pertaining to imposition of penalty of ₹ 25 Lakh upon the appellant under Rule 25() of the Central Excise Rules, 2002. It is observed from Para 9 (v) of the Order-in-Original dated 31.08.2012 that entire defaulted amount alongwith interest was paid by the appellant before issue of show cause notice. During the period of default, the duty was being paid by the appellant through CENVAT account. - Decided in favour of assessee.
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2015 (10) TMI 1210
Denial of CENVAT Credit - Courier Service - Held that:- It an admitted fact on record that the appellant had received the courier services for speedy delivery of the final product to their customers after clearance from the factory. The service providers are registered under the category of ‘courier service’. Since the services availed from the courier agency are relating to the business activities of the appellant, in terms of the definition of input service, service tax paid on such taxable service is eligible for cenvat benefit. Therefore, I do not find any infirmity in the impugned order, and as such, the appeal filed by the Revenue appellant is dismissed. The Respondent is eligible for consequential relief, if any, as per law. - Decided against Revenue.
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2015 (10) TMI 1209
Valuation of goods - Determination of assessable value - Held that:- It is seen that the issue involved in the present case is identical and facts are similar. We agree with the above decisions of this Hon’ble Tribunal [2007 (11) TMI 164 - CESTAT, AHMEDABAD] and [2008 (6) TMI 514 - CESTAT, AHMEDABAD]. We also hold that the transaction value declared by the respondent cannot be disregarded and value of export cannot be adopted for such DTA clearances. - Decided against Revenue.
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2015 (10) TMI 1208
Denial of CENVAT Credit - whether the appellant is entitled to take Cenvat credit on the inputs supplied by manufacturer supplier, a 100% EOU through dealer on which the duty has been paid and goods had been received by the appellant or not - Held that:- It is admitted fact that appellant have received the goods on which duty has been paid by the manufacture-supplier. Therefore, the appellant has complied with the condition of notification No. 23/03 CE dated 31.3.03 as per Rule 9(5) of the Cenvat Credit Rules, 2004. - In the case of S K Industries P Ltd. (2004 (6) TMI 432 - CESTAT, NEW DELHI) although the goods are supplied by 100% EOU but invoices were issued under Rules 52A and 173G of Central Excise Rules, 1944 which were not having issued it under Rule 100 E ibid i.e. appellant. in the case there. Here the invoices have been issued by 100% EOU under the prescribed Rule, paid duty thereon and goods have been received by the appellant, therefore, the case relied upon by the learned AR have no relevance to the facts of the case. Moreover, the decision of Balakrishna Industries Ltd.(2015 (1) TMI 938 - CESTAT NEW DELHI) , the facts were similar to the facts of this case. In that case also the manufacturer-supplier has taken the benefit of exemption notification No. 44/2001 which was not entitled to and cleared the goods to the manufacturer-supplier which took the Cenvat credit and Revenue sought to deny the said credit Ultimately, this Tribunal came to the conclusion that the manufacturer-supplier is entitled to take cenvat credit. Therefore the facts of this case are squarely covered by the decision of Balakrishna Industries Ltd. (supra). In these circumstances, I hold that appellant has correctly taken the cenvat credit which cannot be denied to them. Therefore, impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1207
Reversal of CENVAT Credit - Credit on furnace oil used in generation of steam and in turn used in the manufacture of electricity - Held that:- Commissioner (Appeals) has allowed the respondent's appeal and held that furnace oil used in the generation of steam which in turn used for manufacture of electricity following Tribunal's decision in the case of CCE Vs Sudarshanam Spinning Mills (2004 (1) TMI 162 - CESTAT, CHENNAI) which was challenged by Revenue before Hon'ble High Court, Madras [2011 (8) TMI 1074 - MADRAS HIGH COURT]. The Hon'ble High Court by its order dt. 4.8.2011 dismissed the CMA filed by Revenue upholding Tribunal's decision on the issue. Therefore, the issue has attained finality in view of judgement of Hon'ble High Court, Madras. Therefore, judgement of jurisdictional High Court, Madras is binding on this Tribunal. Accordingly, we hold that respondents are eligible for cenvat credit on furnace oil. By respectfully following the Hon'ble High Court's order (supra), we find that there is no infirmity in the order of the L.A.A - Decided against Revenue.
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2015 (10) TMI 1206
Extension of stay order - Held that:- Any stay order passed by the Tribunal, if it is in force beyond 07/08/2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension of orders granting stay either fully or partially - Decision in the case of M/s. Venketeshwara Filaments Pvt. Ltd. & Ors. Vs. CCE & ST., Vapi [2014 (12) TMI 227 - CESTAT AHMEDABAD] followed - Stay extended.
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2015 (10) TMI 1205
Denial of CENVAT Credit - Credit taken on invalid documents - Held that:- On perusal of the adjudication order, I am unable to accept the findings of the Commissioner (Appeals). It is seen from the challan dated 11.11.2008 that the merchant exporter M/s Ram Ratna international paid the duty for non- fulfillment of the export obligation of 6108.48 kgs of import material. The appellant availed the credit of ₹ 3,25,540.00 on additional payment of duty by the merchant exporter for non-fulfillment of the export obligation on the inputs received by them. Thus, it does not amount to availment of the Cenvat Credit twice. The appellant is eligible to avail the credit on the basis of the challans authorized by the customs, as held by the Tribunal in the case of Commissioner of Central Excise, Mumbai-II vs Hindustan Composites Ltd. [2004 (3) TMI 637 - CESTAT, MUMBAI] - impugned order passed by the Commissioner (Appeals) is set-aside - Decided in favour of assessee.
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2015 (10) TMI 1204
Denial of refund claim - Unutilized CENVAT Credit - Notification No. 5/2006-CE (NT) dated 14.03.2006 - Held that:- during the personal hearing on 17.03.2011, the representative of the appellant explained in detail on the export and other issues. The appellant after the personal hearing by letter dated 05.05.2011 replied the enquiries made by the Commissioner (Appeals) during the personal hearing. The Show Cause Notices were issued on the basis of the verification report of the Superintendent, which was not disclosed to appellant, as contended by the learned advocate. It is noted that appellant produced the documents which were not properly considered by the lower authorities. The findings of the Adjudicating Authority in this regard are misconceived. Thus, the impugned orders were passed without proper appreciation of the evidences, as placed by the appellant. In my considered view, the Adjudicating Authority should have examined the documents in proper manner and also provide the copy of the investigation report as referred in the Show Cause Notice, to the appellants. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1203
Rectification of mistake - Held that:- In para 3 of the impugned order, for ‘70%’ and ‘30%’, ‘30%’ and ‘70%’ respectively will be substituted. - counsel in his application has also stated certain other points. One of the points mentioned is that the fact found by the original authority was not challenged. This point was not part of appeal memorandum and in any case challenge to original order will included the same. We find other points are not in the nature which can be considered in the ROM application. ROM is not a forum to review the order or rewrite the full order. - Appeal disposed of.
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2015 (10) TMI 1202
Rectification of mistake - Non consideration of written submission - Held that:- Under Section 129B (2) the Tribunal may amend any order with a view to rectifying any mistake apparent from the record. A rectifiable mistake must be obvious and must not be such that its rectification leads to re-writing the Order on merits. Rectification should not result in review of the Order. Therefore we agree with the Ld. Counsel that non recording of the written submissions is a mistake apparent on record. At the same time we note that in our Order, we had merely remanded the matter to the Adjudicating Authority to examine the issue of unjust enrichment on the basis of facts and judicial pronouncements. - Rectification done.
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2015 (10) TMI 1201
Condonation of delay - appellants were cleared excise duty paid goods to SEZ and claimed refund under Rule 5 of Cenvat Credit - Bar of limitation - Held that:- OIA was passed on 04.10.14 and in the said order while allowing the Revenue appeal he allowed the appellants to take cenvat credit by way of re-credit. The department again issued show cause notice for demand of interest on the refund sanctioned, which was already paid by the appellant in pursuant to the OIA. We find the reasons of delay is fully justified and beyond their control due to initiation of another round of proceedings against the appellants. By respectfully, following the Hon'ble Supreme Court decision in the case of Collector, Land Acquisition Anantnag and Another Vs. MST. Katiji and Others (1987 (2) TMI 61 - SUPREME Court) and this Tribunal decision in the case of ARR Enterprise Vs. CCE, Trichy - [2013 (12) TMI 346 - CESTAT CHENNAI], the delay in filing the appeal is condoned - Delay condoned.
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2015 (10) TMI 1200
Waiver of pre deposit - Mandatory pre deposit - Held that:- Tribunal is a creature of Customs, Excise and Service Tax Acts and cannot go beyond the provisions of the said Act. Section 35F clearly provides for deposit of 7.5% and does not give this Tribunal any discretionary powers to waive the same. We accordingly, hold that the appeals are not maintainable. - Decided against assessee.
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2015 (10) TMI 1199
Duty demand - Undervaluation of goods - Held that:- there is no indication that the earlier OIA was challenged by the Revenue. It is also noticed that CBEC vide Circular F.No.390/Misc./163/2010-JC, dt.17.08.2011 held that Revenue would not file appeal below ₹ 5 lakhs before the Tribunal. Hon'ble High Court of Karnataka in the case of Commissioner of C.Ex., Bangalore-III Vs Presscom Products - [2011 (3) TMI 726 - KARNATAKA HIGH COURT ] observed that the said circular would be applicable retrospectively. Hence, this appeal filed by the Revenue is liable to be rejected on both the counts. - Decided against Revenue.
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2015 (10) TMI 1198
Waiver of pre deposit - whether the activity of the appellant installation of signaling system at site is manufacture of excisable goods and would be attract excise duty, is a question of interpretation - Held that:- Activity of the appellant no excisable goods come into existence. Moreover, it is also not disputed that similar show cause notices issued by jurisdictional Additional Commissioner, Bangalore, Ahmedabad and Mysore have been dropped by the concerned Additional Commissioners. We are also convinced with the contention that the elements required for invocation of extended period under proviso to section 11A(1) are absent in this case. Prima facie, the show case notice dated 31.10.2012 for demand of duty issued for the period October, 2007 to December, 2009 is therefore time barred - requirement of pre-deposit of duty demand, interest and penalty is waived for hearing of the appeal and recovery thereof is stayed. - Stay granted.
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2015 (10) TMI 1197
Maintainability of appeal - Monetary limit - Held that:- Impugned order was passed by the Commissioner (Appeals) under Section 35A which is specified under Clause (b) of sub-section (1) of Section 35B. In view of Second proviso to Section 35B(1), this Tribunal has discretion to refuse of to admit the appeal in respect of order referred to clause (b) or clause (c) or clause (d) where amount of duty, amount of fine or penalty determined by such order does not exceed ₹ 50,000/- (before 6/8/2014) and ₹ 2 lakhs (on or after 6/8/2014). - Appeal not admitted - Decided against assessee.
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2015 (10) TMI 1196
Imposition of penalty - Undervaluation of goods - Clandestine removal of goods - Held that:- Company having not challenged the confirmation of demand, the same has to be accepted based on the fact of clandestine activities. Further, we also appreciate the fact that the appellant who was an Executive Director of the company, was managing the day-to-day affairs of the company and there are three confessional statements, which are not retracted, on record to show his involvement - impugned order of the Commissioner already stands set aside by the Tribunal vide Final Order No. 1881/2004 dated 25.11.2004 as also by Final Order Nos. 1188 & 1189 dated 18.7.2005, by holding the same as violative of principles of natural justice. Learned A.R. has brought to our notice that the Revenue has subsequently filed ROM application before the Tribunal seeking clarification as to whether such setting aside of the order is only in respect of parties involved therein but no order on the said ROM application is available on record - impugned order of the Commissioner has merged with the earlier order of the Tribunal, referred supra and is 'non est' . As such, we think it appropriate to remand the present appeal to the Commissioner for fresh consideration in the light of evidence available on record including confessional statements and also other factors - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1195
Denial of Cenvat Credit - Suppression of facts - Penalty u/s 11AC - Held that:- As per findings of the Adjudicating Authority, it is clearly evident that there was no suppression of fact with intent to evade payment of duty on the part of the appellant. So, the extended period of limitation would not be invoked. - I set-aside the demand of Cenvat Credit alongwith interest as barred by limitation - Decided in favour of assessee.
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2015 (10) TMI 1194
Refund claim - Rejection of interest claim - Unjust enrichment - Held that:- Section 11 B of the said Act is not applicable in respect of claim of interest. Revenue has not filed appeal against such finding. On a query from the Bench, the Learned Advocate submits that the principle of unjust enrichment is not applicable in respect of claim of interest, which was introduced with effect from 10.05.2008 - period of dispute is before 10.05.2008. We have also noticed the Commissioner (Appeals) categorically observed that Section 11 B of the Act would not be applicable and therefore, the principle of unjust enrichment would also not be applicable. Thus, the rejection of refund of interest is not sustainable. - rejection of claim of interest of ₹ 10,16,738.00 is set-aside - Decided in favour of assessee.
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2015 (10) TMI 1193
Reversal of CENVAT Credit - whether the appellant is liable to reverse the cenvat credit of duty availed on the inputs which were issued for manufacture of the final product but got destroyed in fire, during the course of manufacture of the final product, before reaching the final stage i.e. as work in progress - Held that:- The law is no more res integra and identical situation was considered by the Hon'ble Madras High Court in the case of Commissioner of Central Excise, Chennai-IV Vs. Fenner India Ltd. [2014 (11) TMI 704 - MADRAS HIGH COURT] and it was held that there is no requirement of reversal of cenvat credit in respect of inputs destroyed as contained in work in progress, even after the amendment of the law w.e.f. 07.09.2007, inasmuch as the subject amendment pertains to only inputs as contained in final products, destroyed in fire - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1192
Denial of CENVAT Credit - Capital goods - Held that:- As per explanation 2 (2) (k) inputs include items used by the manufacturer in the manufacture of capital goods which are further used in the factory of manufacturer. - inputs having been used in the construction of the chimney, which was a part of the pollution control system, the benefit of cenvat credit cannot be denied to them - Penalty imposed is also set aside - Decided in favour of assessee.
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2015 (10) TMI 1191
Claim of refund - deemed fiction of duty paid under protest - period of limitation - Exemption under Notification No. 108/95-CE - Partial refund allowed - Balance refund rejected as barred by limitation - Held that:- Admittedly the refund of ₹ 14.25 lakhs (Rupees Fourteen Lakhs Twenty Five Thousand approximately) stands filed by the appellant beyond the normal period of limitation. It is also factually correct that no protest was lost either by M/s. CST or by the appellant for the said period in question. The lower authorities have rightly concluded that the Tribunal's order would be applicable only to the period involved in those appeals and cannot be held to be applicable for the entire period in question. Inasmuch as neither any protest was lodged nor the Tribunal's order covers the period in question, the lower authorities have rightly held the refund to be barred by limitation. The appellants stand that inasmuch as the issue was before the Tribunal by way of an appeal, the duty paid during the subsequent period should be deemed to be having been paid under protest cannot be appreciated as there is a specific procedure to be followed for paying the duty under protest. The appellant having not followed that procedure, the deemed fiction cannot be adopted merely because the earlier order was the subject matter of appeal before the Tribunal. As such I find no infirmity in the views of the lower authorities - Decided against assessee.
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2015 (10) TMI 1190
Denial of CENVAT Credit - Imposition of penalty - Held that:- Commissioner (Appeals) observed that there was no challenge to the wrong availment of the CENVAT credit by the appellant. Therefore, the grounds advanced by the appellant in their appeal become an additional submission. It is further observed that the appellant have failed to satisfy the authority as to why the additional submissions should be entertained, as required under Rule 5 of the Central Excise (Appeal) Rules, 2001. Learned Advocate submits that they have taken the issue of non-utilisation of CENVAT credit before the adjudicating authority. In my considered view, the Commissioner (Appeals) should have examined the additional grounds in the memorandum of appeal placed before him, in the interest of justice. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1189
Remission of duty - Goods destroyed in fire - Held that:- Larger Bench of the Tribunal, by miscellaneous order [2014 (11) TMI 579 - CESTAT AHMEDABAD] answered the reference in favour of the appellant. It has been held that in cases where goods removed from factory for export under Bond are destroyed before export due to unavoidable accident, then in such situation the goods destroyed are to be treated as having been destroyed before removal in terms of Rule 21 of Central Excise Rules, 2002. - Impugned order cannot be sustained - Decided in favour of assessee.
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2015 (10) TMI 1188
Exemption of duty - Notification No. 10/2003-CE dated 01.03.2003 - Imposition of penalty - Held that:- Appellant's product was exempted prior to 01.03.2006. They were maintaining proper records and were filing "NIL" returns with their jurisdictional central excise officers. Even after the withdrawal of the exemption notification, they continued to file "NIL" returns with the same jurisdictional authorities even though it is on record that the office of the jurisdiction was changed from S.C. Road to Vijayanagar. However, it is also a fact on record that on receipt of the ST-3 returns, officers at SC Road never returned the said returns to the appellant with direction to them to file it in the proper office. Further, the officers at SC Road accepted the said returns and never raised the issue of payment of duty. The appellant's lapses came to notice, for the first time with the visit of the audit party. The statement of their Managing Director recorded on the spot indicates that the appellant was unaware of the fact of excisability of the said product. Though, not knowing the law cannot be taken as an excuse but if overall facts are viewed i.e, the appellant's maintaining proper records, filing of proper returns, acceptance of such returns by the concerned officer, the statement of the Managing Director; the same leads to an inevitable conclusion that non-payment of duty was not as a result of any malafide intention but was a pure mistake on the part of the officer. If the departmental officers, who accepted the returns also were not aware of the levy of duty and withdrawal of exemption, the assessee, who is not a legal expert cannot be blamed for that. It is not a case of clandestine removal inasmuch as all the removals were part of the statutory records. It is well settled that provisions of Section 11AC can be invoked only in case of malafide and willful intention to evade payment of duty. As such, I am of the view that imposition of penalty on the appellant is not justified - Decided in favour of assessee.
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2015 (10) TMI 1187
Duty demand - Imposition of penalty - Suppression of facts - Held that:- Tribunal remanded the matter to the Adjudicating authority to reconsider the imposition of penalty on the partner. In the impugned order, the Commissioner observed that the Appellants had filed wrong declarations with wilful suppression of actual manufacturing process carried out by them and suppressing the nature and quality of the fabric manufactured by them and mis-declaring their actual classification with intent to evade payment of duty. - role of the partner was not indicated in the Show Cause Notice. In the present case, the Adjudicating authority had given the detailed finding on the role of the partner and therefore, the case laws are not applicable. The learned Advocate submitted that the Tribunal had remanded the matter for reconsideration of imposition of penalty on the partner. - quantum of penalties on the partners are excessive. - Penalty reduced - Decided partly in favour of assessee.
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2015 (10) TMI 1186
Denial of CENVAT Credit - duty paid during the defaulted period from their CENVAT account instead of paying in cash under PLA - contravention of Rule 8(3A) of Central Excise Rules, 2002 - Held that:- Authorised Representative for the Revenue submits that they have contravened the Rule and therefore, penalty should be imposed. It is further contended that they have not discharged the duty consignment-wise and therefore, they are liable to pay interest. - Gujarat High Court in the case of Indsur Global Ltd (2014 (12) TMI 585 - GUJARAT HIGH COURT) the demand of duty by cash is not sustainable. As the Hon'ble Gujarat High Court declared the law invalid and therefore, the imposition of penalty is not warranted. However, Revenue is at liberty to raise the demand of interest, if there is a delay in payment of duty consignment-wise. - impugned orders are set aside. - Decided in favour of assessee.
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2015 (10) TMI 1185
Denial of CENVAT Credit - Reversal of CENVAT Credit - stocks of the semi-finished goods and stock of purchase - SSI Exemption - whether the Appellant while opting SSI exemption, they are required to reverse the CENVAT Credit on the stock of semi-finished goods (clinkers) and processed material lying in the factory as on 31.03.2007 - Held that:- Punjab & Haryana High Court in the case of CCE Chandigarh Vs. M/s C.N.C. Commercial Ltd - [2007 (10) TMI 203 - HIGH COURT PUNJAB AND HARYANA ] dismissed the appeal on the identical issue Notification No.08/2001-CE, dt.01.04.2001 - Similar view was taken by Hon'ble Andhra Pradesh High Court in the case of Commissioner of C.Ex., Tirupati Vs Suvera Processed Foods Pvt.Ltd. - [2014 (10) TMI 560 - ANDHRA PRADESH HIGH COURT]. The Larger Bench of the Tribunal in the case of H.M.T. Vs Commissioner of Central Excise, Panchkula - [2008 (10) TMI 54 - CESTAT, NEW DELHI] held that the input-credit legally taken and utilized on the dutiable final products, need not be reversed on the final product becoming exempt subsequently. - impugned order cannot be sustained and it is set aside. - Decided in favour of assessee.
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2015 (10) TMI 1184
Reversal of CENVAT Credit - removal of Capital goods after use - Held that:- Authorised Representative for the Revenue submits that the Respondents availed the CENVAT Credit on capital goods and at the time of clearance of the capital goods after use, they paid the duty on the transaction value. He submits that on the identical issue, Hon'ble Madras High Court in the case of Commissioner of C.Ex., Salem Vs Rogini Mills Ltd - [2010 (10) TMI 424 - MADRAS HIGH COURT] held that the assessee is liable to reverse the credit on the depreciated value of the capital goods. The Larger Bench of the Tribunal in the case of Commissioner of C.Ex., Hyderabad-III Vs Navodhaya Plastic Industries Ltd - [2013 (12) TMI 82 - CESTAT CHENNAI ], followed the decision of Hon'ble Madras High Court. - impugned order is set aside and the matter is remanded to the Adjudicating authority - Decided in favour of Revenue.
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2015 (10) TMI 1183
Denial of CENVAT Credit - Capital goods - Held that:- Since capital goods was used in the manufacture of final product for which excise duty is paid, in my view, credit is admissible from the date of installation and use of capital goods. Incorporation of the said premises is merely procedure requirement. The main requirement of availing Cenvat Credit is that capital goods should be used in the manufacture of dutiable good which is not under dispute. In view of this position, I am of the view that appellant was entitled for the Cenvat Credit from the date of receipt and installation of the capital goods even though the part of the factory of the appellant was incorporated subsequently. - Decided in favour of assessee.
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2015 (10) TMI 1182
Reversal of CENVAT Credit - Whether the appellant is liable to reverse the credit so availed by him when the inputs were not actually used in the manufacture of the final product and were destroyed in the job-worker's factory - Held that:- Tribunal in the case of Dishman Pharm. & Chemicals Ltd. Vs. CCE, Ahmedabad [2006 (5) TMI 356 - CESTAT, MUMBAI] has dealt with an identical situation i.e. where the inputs sent to the job-worker's factory were destroyed in fire. The Tribunal relying upon some precedent decisions, as confirmed by Hon'ble Supreme Court held that inasmuch as the inputs have been sent to the job-workers, they have to be considered as being issued for manufacture and entitled to the cenvat credit. As such the said decision fully covers the situation available in the present case. - an assessee is liable to reverse the cenvat credit of duty paid on the inputs, which have been used in the manufacture of the final product and which final product stands destroyed and remission of duty stands granted in respect of the said destroyed final product. However he submits that the said Rule is not applicable to the destruction of the inputs itself, which have not reached the stage of final goods. For the said proposition he relies upon the Tribunal's decision in the case of Themis Medicate Ltd. Vs. CCE&S.T, Daman [2014 (2) TMI 208 - CESTAT AHMEDABAD]. - appellant is entitled to the cenvat credit of duty in respect of the inputs destroyed in fire at the job-worker's factory. Accordingly the impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1181
Denial of CENVAT Credit - whether the appellant is to be allowed utilisation of CENVAT credit of basic excise duty for payment of Education Cess and Secondary and Higher Education (SHE) Cess - Held that:- In view of the decision of the Hon’ble Gujarat High Court in the case of M/s. Madura Industries Textiles (2013 (1) TMI 352 - GUJARAT HIGH COURT) the impugned order cannot be sustained and it is set-aside - Decided in favour of assessee.
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2015 (10) TMI 1180
Maintainability of appeal - Claim of interest on Rebate / refund - export of goods - Section 11BB - Held that:- Revenue filed appeal against the rebate claim before the Joint Secretary (Revision Application) and therefore, the appeal filed by the Revenue against the payment of interest consequent to the earlier Order-in-Appeal, would not lie before this Tribunal as per the first proviso to Section 35 B(1) of Central Excise Act, 1944. Accordingly, the appeal filed by the Revenue is dismissed as not maintainable. - Decided against Revenue.
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2015 (10) TMI 1179
Power of Commissioner to remand back the matter - Held that:- Tribunal after considering the decision of the Hon'ble Supreme Court in the case of Mill India - 2007 (210) ELT 188 (S.C.), in the case of Bacha Motors (P) Limited vs. Commissioner of Service Tax, Ahmedabad 2010 (255) ELT 530 (Tri. Ahmd.) held that the Commissioner (Appeals) has the powers to remand the matter - No reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue.
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2015 (10) TMI 1178
Denial of CENVAT Credit - Denial of exemption claim - Ineligible documents - Held that:- Prima facie, the lower appellate authority has held that when the adjudicating authority took a different stand in the present appeal when compared to the earlier order passed by the same authority in respect of input services used in the co-generation plant. Revenue also has questioned the authority of authority's power stating that he should not have remanded the case and also not discussed the third issue on denial of credit availed on ineligible documents. - infirmity in the impugned order particularly when he noticed the same adjudicating authority took two different stand on a particular issue regarding input services used in co-generation plant in OIO No. 13/2009 dated 02.06.2009. While remanding the case, the appellate authority also clearly stated that the adjudicating authority failed to give due valid grounds for denying credit on other services related to construction activities. No doubt, appellate authority has not discussed the third issue in the impugned order. Therefore, taking into consideration of the overall facts and also taking into consideration that the case is already remanded to the adjudicating authority, there is no infirmity in the impugned order. However, it is directed that the adjudicating authority while deciding the denovo proceedings shall take into consideration of the input service credit denied on the ineligible documents and decide afresh. The adjudicating authority is directed to consider all the issues open in denovo adjudication. - Decided partly in favour of assessee.
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2015 (10) TMI 1177
Availability of CENVAT Credit - Capital goods - Held that:- Revenue has not produced any evidence to show that such iron and steel items were used as supporting structurals. Even in the Larger Bench decision of the Tribunal in the case of Vandana Global, it was held that use of such items in fabrication of capital goods is permissible for the purpose of CENVAT credit. Learned advocate for the Respondent has also brought to my notice the latest decision of this Bench in the case of CC Guntur Vs Andhra Sugars Ltd [2014 (2) TMI 548 - CESTAT BANGALORE] wherein credit in respect of identical items was allowed. As such, I find no merits in the Revenue's appeal. The same is accordingly rejected. - Decided against Revenue.
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2015 (10) TMI 1176
Duty demand - Shortage of raw materials - Penalty imposed on partner - Held that:- no appeal was filed against the partner. Regarding the confiscation and imposition of redemption fine, I find that the goods were not available and the Commissioner (Appeals) rightly set-aside, the confiscation and imposition of redemption fine. It is also noted that the Hon’ble Gujarat High Court in various decision held that assessee should be given option to pay the reduced penalty under the said provision if, the Adjudication Authority had not given such option. - Appeal disposed of.
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2015 (10) TMI 1175
Denial of refund claim - Unjust enrichment - Held that:- Adjudicating Authority had proceeded on the basis of the respondent failed to fulfill the condition of unjust enrichment. Commissioner (Appeals) had given the detail finding on this issue. It has been observed that unjust enrichment is not applicable in this case because the said Education Cess was paid by the respondent after clearance of the goods. It is also noted that the respondent paid the amount after clearance of the goods at the instance of the Range Officer. The issue raised by Learned Authorised Representative was not before the lower authorities and even in grounds of appeal before the Tribunal. - No reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue.
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2015 (10) TMI 1174
Extension of stay order - Held that:- After hearing the Learned Authorised Representative and on perusal of the records, we find that the appeal was not taken for hearing by the Tribunal as there is huge pendency of the appeals. It is noted that lot of appeals have already been listed and therefore it is difficult to take up the appeal hearing at this stage. - Decision in the case of M/s Haldiram India Pvt.Ltd. & others Vs Commissioner, Central Excise & Service Tax [2014 (10) TMI 724 - CESTAT NEW DELHI (LB)] followed - Stay extended.
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2015 (10) TMI 1173
Benefit of exemption Notification No. 63/95-CE dated 16/03/1995 - exemption from excise duty to goods produced in a mine - workshop within surrounding region or area - Held that:- Appellant was availing the benefit of exemption Notification No. 63/95-CE dated 16/03/1995 which was denied in the impugned order based upon this Tribunal's decision in the case of South Eastern Coalfield Ltd., Vs. CCE, Raipur - [2000 (11) TMI 187 - CEGAT, COURT NO. II, NEW DELHI]. This view was further confirmed in this Tribunal's decision in the case of the same assessee reported in [2002 (10) TMI 178 - CEGAT, COURT NO. II, NEW DELHI]. The matter has gone to the Hon'ble Supreme Court. The Hon'ble Supreme Court vide their order dated 01/08/2006 reported in [2006 (8) TMI 3 - SUPREME COURT OF INDIA] had set aside the order of this Tribunal - Following the said decision - Decided in favour of assessee.
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2015 (10) TMI 1172
Waiver of pre deposit - Demand of differential duty - Concessional rate of duty - Held that:- prima facie, the appellant has not made out a case for full waiver of pre-deposit ordered. Hence, the appellant is directed to make pre-deposit of an amount of ₹ 4,00,000 within a period of eight weeks and to report compliance on 30.07.2015. Upon deposit of the said amount pre-deposit of the balance amounts of duty along with interest and penalty shall stand waived and its recovery thereof stayed during the pendency of the appeal. - Stay granted.
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2015 (10) TMI 1171
Validity of impugned order - Three dates of hearing granted with one notice only - Held that:- Adjudicating authority proceeded on the basis that three opportunities for personal hearing had been granted and no further adjournment shall be granted as per proviso to Section 33A of the Central Excise Act, 1944. We find that three dates of hearing were granted by one notice, which is not proper as per the proviso to Section 33A of the said Act, 1944 as held by the Tribunal in the case of Imtiaz Ahmedad (2014 (12) TMI 767 - CESTAT BANGALORE (LB)). We have also considered that the Appellant was under BIFR. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1170
Duty demand - Wrong availment of SSi Exemption - Use of other's brand name - Held that:- Trade Mark authority by Order No.TM-46/70/381, dt.31.12.2008, certified that M/s Harsh Industries, amongst others are registered as subsequent proprietor of Trade Mark “HARSH” as from 28.09.2000 by virtue of Deed of Assignment dt.31.03.2001. As the Trade Mark authority accepted that Respondent is proprietor of Trade Mark “HARSH” from 28.09.2000, then the demand of duty for the period 2003-04 to 2004-2005 on this ground is not sustainable. We have also noticed that the submissions of the Revenue before the Tribunal were refuted by the Respondent. Hence, there is no need to discuss all these things. - No reason to interfere with impugned order - Decided in favour of assessee.
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2015 (10) TMI 1169
Rectification of mistake - Duty demand - Clandestine removal of goods - Heldthat:- mount of clandestine removals mentioned in the last coloum of table appearing in para 13 in the case of M/s Sunora Ceramics Industries should be ₹ 23,801/- instead of ₹ 8157/-. That amount of clandestine removal with respect to M/s Shayam Ceramics, mentioned at Serial No. 3 of the table, is NIL and should be deleted from the said table. Two other appeals E/448/2012 and E/10352/2013 in the case of M/s Suzuki Ceramic and M/s Digital Ceramics Pvt. Ltd. were also listed for hearing on 24.09.2014 where the amounts of clandestine removals were ₹ 17,256/- and 8157/- respectively. - Order rectified.
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2015 (10) TMI 1168
Waiver of pre deposit - Penalty u/s 11AC - Valuation - Held that:- appellant manufactured Electric Mosquito Destroyer Machine (EMD) and stock transferred to their principal supplier M/s. Godrej on payment of duty by taking job charges as cost of production 110%. Whereas the differential duty demanded in terms of Rule 10(A) of Valuation Rules. We find that these goods stock transferred are meant for export and the 2nd applicant on receipt of the goods from the applicant after carrying out quality testing and other activities, exported the same on payment of duty at higher value which is not in dispute. The second applicant also claimed rebate on excise duty paid on the goods exported. On identical case against the second applicant ie M/s. Godrej Consumer Products Ltd. the department disallowed the cenvat credit, of duty paid on the finished goods cleared by the first applicant and the appeal filed before this Tribunal Vide miscellaneous Order [2014 (10) TMI 238 - CESTAT CHENNAI], this Tribunal granted full waiver of pre-deposit. Considering the above decision and also considering the fact that even if the applicant pays the differential duty, the 2 nd applicant is entitled to the Cenvat credit the applicant has made out a prima facie case for full waiver - Stay granted.
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2015 (10) TMI 1167
Valuation of goods - Section 4 or 4A - assessment of duty on the sugar confectionery Nestle Eclairs and Nestle Milk Bar Eclairs manufactured and cleared in pet jars and poly packs whether under Section 4 or under Section 4A - Held that:- apex court order is relied by the Tribunal in the case of Sampre Nutrition Ltd. Vs Commissioner of Customs & Central Excise (Appeals), Hyderabad reported in [2013 (6) TMI 448 - CESTAT BANGALORE] and distinguished by the Larger Bench decision in the case of Roys Industries Ltd. (2010 (9) TMI 257 - CESTAT, BANGALORE). Commissioner in his impugned order has rightly dropped the proceedings by relying on the Tribunal's order dated 25.01.2006 and the said Tribunal order now stands upheld by the Apex Court. Therefore, we do not find any infirmity in the order passed by Adjudicating authority. - Decided against Revenue.
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2015 (10) TMI 1166
Refund claim - Appropriation of interest - Held that:- Adjudicating authority sanctioned rebate claims under Rule 18 of the Central Excise Rules, 2002 and by exercising powers vested under Section 11 of the Central Excise Act, 1944, appropriated the amount towards interest outstanding arising out of the other demand. In view of the decision, in the appellants own case vide Final Order dated 16.7.2014, as amended by Miscellaneous Order dated 23.9.2014, the appellants are entitled to get refund of interest appropriated by the adjudicating authority. We agree with the submissions of the learned Authorised Representative to the extent that the appellant had not claimed payment of interest on the amount appropriated, before the lower authorities. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1165
Duty demand - exemption benefit under Notification 23/2003-CE dated 31.3.2003 - violation of conditions of exemption notification - Held that:- Appellant submitted copy of Advance Licence, duly debited by the Central Excise officers. Appellant had cleared the goods against Advance licence and contention of the learned Advocate is that appellant produced copy of the Advance Licence and the original is lying with M/s. Gujarat Flurochemicals Limited and the department may verify at their end. We find force in the submission of the learned Advocate. In our considered view, as the appellant produced copy of the Advance Licence duly debited the quantity and value of the goods cleared by them and it would be proper that the jurisdictional Central Excise officer should verify at their end. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1164
Waiver of pre deposit - Denial of CENVAT Credit - Penalty u/s 11AC - Capital goods - Held that:- Appellant in his appeal seeking relief only for waiver of interest and penalty and there is no contest on the demand of Cenvat amount. From the facts of the case I find that appellant have availed Cenvat credit admittedly which was inadmissible, however on pointing out by the department they have immediately paid the amount of Cenvat credit, however they have not paid interest. - Apex Court judgement [2011 (2) TMI 6 - Supreme Court] interest is payable on the Cenvat credit amount which comes to ₹ 65,707/- as confirmed by original authority. As regard imposition of penalty of equal amount of duty under Section 11AC, I am of the view that firstly appellant has taken this credit inadvertently. On pointed out by the department they immediately paid this amount without any contest. Looking to the conduct of the appellant, malafide can not be attributed. The appellant paid entire amount of Cenvat Credit before issuance of show cause notice. Therefore, I am of the view that appellant has made out a fit case for waiver of penalty imposed under Section 11AC - Decided partly in favour of assessee.
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2015 (10) TMI 1163
Duty demand - Imposition of penalty - Shortage of finished goods - Held that:- 10 invoices as mentioned in the Annexure ‘C’ were also mentioned in the Annexure ‘A’ to the show cause notice. It is noticed that the Commissioner (Appeals) rejected the submission of the appellant in respect of the 6 invoices on the basis of certain documents collected from the appellant. In any event, the appellant should be given an opportunity to produce the evidence in respect of the 6 invoices. - Adjudicating Authority is required to re-examine the Annexure ‘C’ with Annexure ‘A’ - Appeal disposed of.
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2015 (10) TMI 1162
Denial of CENVAT Credit - capital goods - reversal of credit on damaged parts being replaced - Held that:- Appellant received the machines and availed cenvat credit thereof. It was found that some part of the machine were damaged which was replaced by the supplier. There is no dispute that the appellant availed the credit on the entire machine which was received by them and used in the manufacture of final products. A portion of the parts was replaced cannot be reason for denial of the proportionate cenvat credit on the entire machine which was used in the manufacture of final product, as per provision of Cenvat Credit Rules. The main contention of the Learned Authorized Representative for the Revenue is that they have availed insurance claim in respect of the damaged parts. There is no material available that the appellant claimed insurance claim on the cenvat account. - denial of cenvat credit is not sustainable on merit. Hence, the impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1161
Restriction on utlization of cenvat credit for delayed payment of duty - Held that:- In the present case undisputed fact is that demand of ₹ 7,17,726/- and consequent penalty of ₹ 1 lakh has confirmed on the ground that appellant have utilized Cenvat credit during the period of default inasmuch as appellant had not paid the monthly payment of duty beyond 30 days till the payment of such defaulted amount alongwith interest. As per rule 8(3A) appellant was supposed to pay duty during defaulted period from PLA i.e. through cash and not by utilizing Cenvat credit. I find that the issue has been considered by Hon'ble High Court of Gujarat in the case of - Indsur Global ltd. (2014 (12) TMI 585 - GUJARAT HIGH COURT) and held that prohibition in utilizing Cenvat Credit is unconstitutional. In other words, assessee is entitle to use Cenvat Credit for payment of Excise duty at any point of time. Respectfully following ratio of above High Court judgment, I find that demand confirmed by lower appellate authority is not sustainable, therefore the same is set aside
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2015 (10) TMI 1160
Denial of CENVA^T Credit- Rent a cab service - Held that:- In view of findings of the original authority which was upheld by the Ld. Commissioner (Appeals) there is no dispute that certain amount of service charges towards rent a cab and its service tax have been collected by the appellant from the employee, Cenvat credit to that extent is not admissible. IN view of the above discussion I agree with the lower authorities for disallowing credit of ₹ 10,332/-. In the overall facts and circumstances of the case, I waive the penalty of ₹ 2000/0 imposed by the adjudicating authority and upheld by the Ld. Commissioner (appeal). IN view of the above discussion impugned order is maintained except penalty part - Decided partly in favour of assessee.
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2015 (10) TMI 1159
Duty demand - Captive consumption - Notification No. 6/2000 dated 01.03.2000 - Held that:- There is no dispute on the fact that the assessees are manufacturer of submersible pumps and the intermediate product thrust bearing assembly is used in the manufacture of final product. They claimed Notification No. 6/2000 at Sl.No. 250 read with condition No. 5 1. Identical issue has been dealt by the Hon'ble Tribunal in the case of KSB Pumps Ltd. (2004 (9) TMI 497 - CESTAT, MUMBAI) Tribunal discussed the Board's circular dated 4.12.02, which is relied by the department and also considered the Tribunal's decision in the case of Mather & Platt (I) Ltd.(2004 (2) TMI 446 - CESTAT, MUMBAI) and allowed the appeal. - impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1158
Duty demand - Activity of purchasing raw material, inputs and computer parts from the open market and assembling in their premises and selling as computer system - Held that:- Revenue initiated proceedings against the several persons in assembling of parts and selling the computer system. The Tribunal in the case of CCE, Ahmedabad vs. Macro Tech. Pvt. Limited & 4 others, dismissed the appeal filed by the Revenue. - following the Tribunal’s earlier order in the case of Macro Tech P. Limited (2008 (8) TMI 75 - CESTAT AHMEDABAD), we set-aside the impugned order - Decided in favour of assessee.
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2015 (10) TMI 1157
Waiver of pre deposit - Disallowance of CENVAT Credit - Held that:- From letters dt. 29.9.2011 and dt. 10.10.2011 enclosing an undertaking on non-judicial stamp paper dt. 8.10.2011, it is clear that appellant at every stage intimated the department and also sought for single registration. Appellants in their letter dt. 29.9.2011 clearly referred to Rule 10 of CCR seeking for single registration and also undertook to binding themselves to all assets and liabilities of other companies. The department has not caused verification in spite of appellant submitting the documents furnished in Dec'2014. Prima facie, we find that appellants have made out a case for total waiver of predeposit. Accordingly, there shall be waiver of predeposit and stay of recovery of demand in question during pendency of appeal. - Stay granted.
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2015 (10) TMI 1156
Reversal of CENVAT Credit - Trading activity - Held that:- In the impugned order, none of the lower authorities have considered the defence taken by the assessee that they have cleared inputs as such and no verification has been done to that effect whether the assessee has cleared inputs as such or was involved in the activity of trading. Show cause notice has been issued only on the basis of figures shown in the balance sheet. For removal of inputs as such, Rule 3(5) clearly states that if inputs is removed as such, the assessee is required to reverse only Cenvat credit availed on such inputs. If inputs is removed as such, in that case the assessee is required to reverse the credit availed on the inputs and not required to reverse proportionate credit on inputs service pertaining to such goods and required 6% /8% of the value of such goods. As revenue has failed to produce any evidence to show that appellant was involved in the trading activity, it may cleared inputs as such. In these set of facts, Cenvat credit taken by the assessee on the input which are cleared as such, is attributable to proportionate reversal is not supported by cogent reasons. Therefore, as per the provisions of Rule 3(5) of Cenvat Credit Rules, 2004 the assessee was to reverse the Cenvat credit availed on inputs cleared as such. Therefore, I hold that assessee is not required to pay any amount equivalent to 6% /8% of the value of inputs cleared as such or reversal of proportional credit attributable to input cleared - Decided against Revenue.
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2015 (10) TMI 1155
Demand of interest on differential duty - Whether the appellant is required to pay interest in a case where duty alongwith part interest was paid voluntarily - Held that:- Issue is confined to demand of interest under Section 11AB. As it is admitted fact that there is substantial delay in payment of duty even though appellant has paid interest voluntarily. I am of the view that even though the duty was not determined under subsection (2) of Section 11A but when there admitted delay in payment of duty, interest provisions was made under Section 11AB and even prior to 11/5/2001 interest is chargeable on the delayed part of payment of duty. In the judgment of Hon'ble Supreme Court in the case of International Auto Ltd it becomes clear that interest is levied for loss of Revenue on any count. In view of the said decision interest was correctly demanded by the Adjudicating authority and upheld by the Ld. Commissioner (Appeals). Therefore I do not find any infirmity in the impugned order therefore the same is sustained - Decided against assessee.
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2015 (10) TMI 1154
Refund claim - Denial of refund claim - Whether CENVAT credit not reversed by the principal manufacturer in respect of the inputs sent to the job worker and the latter not taken credit thereof shall entitle the principal manufacturer to the refund of any amount paid at a subsequent date without reversing the CENVAT credit on the date of dispatch of the input to the job worker - Held that:- law having prescribed that reversal of CENVAT credit by principal manufacturer is requirement when the goods are sent to job worker failing to do so, the appellant is required to deposit the penalty. Therefore, penalty of ₹ 5,000/- imposed by learned adjudicating authority is confirmed. - Without reversal when the appellant has enjoyed the CENVAT credit it is liable to interest thereon till payment by challan what that is averred. It appears that due to confusion of the position of law, there was no reversal and subsequent payment was made. Therefore, neither appellant will ask any interest nor the respondent shall ask any interest from Revenue. Respondent is entitled to the refund - Decided in favour of assessee.
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2015 (10) TMI 1153
Restoration of appeal - non-prosecution by Order - Refund claim - Held that:- Appellant was directed to furnish the information by Office Letter Dated 04.08.2008 in respect of refund claim. The Commissioner (Appeals) observed that the appellant had not furnished the information as required by the office to verify the claim of the appellant. On a query from the Bench, the Learned Advocate submits that the appellant furnished the documents in the earlier show cause notice proceedings. In my considered view, the appellant should be given an opportunity to furnish documents before the adjudicating authority in the interest of Justice. - impugned order is set-aside. The matter is remanded to the Adjudicating Authority - Decided in favour of assessee.
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2015 (10) TMI 1152
Denial of refund claim - Unutilized CENVAT Credit - Held that:- Assessee after depositing amount of ₹ 35,00,000.00 and ₹ 15,00,000.00 in the Govt. Account, they did not make any debit in their PLA account, towards the duty liability. Instead, they debited entire amount of ₹ 77,99,763.00 and ₹ 19,29,540.00 from their Cenvat Accounts i.e. RG23A Part II vide debit entry no. 6703 and 6704 dated 09.02.2005 against ₹ 77,99,763.00 and debit entry serial No. 203 & 205 dated 09.02.2005 against ₹ 19,29,540.00. It is further observed by the Adjudicating Authority that there is no provision in the law to refund the amount deposited in the Govt. account and not debited towards the payment of duty. I find that the Commissioner (Appeals) has not disputed this fact. Thus, there is no dispute the appellant deposited the amount of ₹ 35 lakhs and 15 lakhs in respect of Unit-1 and Unit-2, which were lying in their PLA Account unutilized. The Commissioner (Appeals) proceeded on the basis that they have already debited the amount in PLA. But, there was no much allegation in the Show Cause Notices and it is contrary to the adjudication order. It is revealed from the Show Cause Notice and adjudication order that the appellant credited there amounts in their PLA account, which were not debited. The Tribunal in the case of Bijalimoni Tea Estate following the both Circular Letter F. No. 202/24/72-CX. 6, dated 0.1.1978 held that refund claim of unutilized balance in PLA is admissible. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1151
Duty demand - appellant had cleared certain goods under “PA” series of invoices without payment of duty - Held that:- Appellant had paid the Central Excise duty alongwith interest, which has been appropriated towards the confirm duty and interest. The appeal filed by the appellant before the Commissioner (Appeals) in respect of imposition penalty under Section 11 AC of the Central Excise Act, 1944. On a query of the Bench, the Learned Advocate submits that the Adjudicating Authority had given option to pay penalty 25% of the duty under Section 11 AC of the Act. It is noted that the demand relates to the period 2006-07 to 2008-09. The learned advocate placed the copy of Panchnama dated 24.04.2007 to substantiate that the documents were seized by the Department. I find that the evidence place by the Learned Advocate was available during the proceedings before the lower authorities and they have not placed this evidence before them. In any event, the Panchnama dated 24.04.2007 has no relation with the demand of duty for the period 2006-07 to 2008-09. - No reason to interfere with order of lower authorities - Decided against assessee.
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2015 (10) TMI 1150
Utilization of Cenvat Credit - Outward GTA Service - Held that:- It has been held that there was no bar for utilization of Cenvat Credit, in respect of payment of service tax liability for Goods Transport Agency (GTA). No reason to interfere the order of the Commissioner (Appeals) - Decided in favour of assessee.
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2015 (10) TMI 1149
Cenvat credit - by-products - whether amount of 10% of the value of Slag payable in terms of Rules 6(3)(i) of Cenvat Credit Rules, 2004 - Held that:- Fact of the case is not under dispute that goods is slag arising out of the manufacturing of final product i.e. Alloys and Non-alloy Cast and Rolls. This slag arises unavoidably during the course of manufacture. Therefore slag is nothing but waste - Above para of instruction manual provides that Cenvat Credit is admissible even in respect of input contained in any waste, refuse or by-product. Therefore demand under Rule 6(3)(i) of Cenvat Credit Rules is not maintainable. This issue was time and again considered in various judgment and finally Hon'ble Supreme Court in the case of Hindustan Zinc Ltd. (2014 (5) TMI 253 - SUPREME COURT) held that demand under Rule 6(3)(i) is not sustainable in respect of waste, by product, refuse cleared without payment of duty. In view of the above settled legal position, I am of the considered view that demand of 10% of the value of Slag cleared by the appellant under NIL rate of duty is not sustainable. - Decided in favour of assessee.
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2015 (10) TMI 1148
Waiver of pre deposit - SSI exemption - Held that:- Appellant is eligible for SSI exemption for CNSL falling under Chapter Heading No.13021920. On a perusal of the TRU letter no.334/3/2006, dated 01.03.2006 (unsigned website copy), the Board has issued clarification on budgetary changes - The amended S.No.(iii) of the annexure to the Notification No.8/2003 clearly covers Chapter 9 to 20. Since appellant is covered under Chapter 13 and goods falling under Chapter 9 to 20 are eligible for SSI exemption under Heading No. 0902. Hence, the appellant prima facie , has made a case for waiver of pre-deposit of duty, interest and penalty. Accordingly, the pre-deposit the entire amount duty, interest and penalty is waived and stay recovery thereof till disposal of the appeal. - Stay granted.
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2015 (10) TMI 1147
Denial of CENVAT Credit - Various services - Held that:- Telephone bills are in the name of head office and same has been used by the officials at their residence and residential premises has been taken on rent where as per rent deed no commercial activity can be carried out by the appellant. I find that in this case bills are raised for the mobile bills which have been used by the officials of the appellant. Therefore, as per Rule 9 of the Cenvat Credit Rules 2004 appellant is entitled to take Cenvat Credit thereon. For denial of Cenvat Credit of ₹ 3,38,880/- the reason is that the appellant has not produced job work agreement. In fact, the appellant has produced the job work agreement which revenue has not contravened without any cogent evidence that these premises were not used by the appellant in their job working activities. Therefore, I hold that appellant has correctly taken the Cenvat Credit. Services has been used by the appellant for dismantling of their plant and machinery located at their premises which was ultimately shifted to their new premises though same is integral part of their activity. Accordingly, I hold that appellant is entitled to take Cenvat Credit thereon. Further, the Chartered Accountant services have been availed by the appellant in the course of their business activity. Therefore, I hold that appellant is entitled to take Cenvat Credit - Decided in favour of assessee.
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2015 (10) TMI 1146
Waiver of pre deposit - Valuation - Held that:- As per MRP declared on the packets, appellants are manufacturing batteries and clearing under the MRP. As per the declaration in respect of batteries manufactured for Amco Batteries Ltd. they have declared two MRP one for "other States" i.e. ₹ 2,336/- and ₹ 2,440/- for "Maharashtra". Since clearance to Maharashtra attracts Octroi the price of ₹ 2,440/- is inclusive of octroi amount - In view of the citations relied by the appellant in the casesof SMV Beverages Pvt. Ltd. (2011 (12) TMI 432 - CESTAT NEW DELHI) and Amtrex Hitachi Appliances Ltd. (2008 (7) TMI 319 - CESTAT AHMEDABAD), appellants have made out a prima facie case for waiver of entire amount of dues. Accordingly, predeposit of entire dues stands waived and recovery thereof stayed during the pendency of the appeals. - Stay granted.
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2015 (10) TMI 1145
Waiver of pre deposit - CENVAT Credit - Held that:- There is no dispute about the correctness of the availed credit by the appellant. The same has to beutilised by the appellant for payment of duty on the manufactured final product. Instead the appellants have utilised the same for payment of duty at the time of clearance of imported inputs into DTA. Undoubtedly in matters of CENVAT credit, there is no one-to-one correlation and if the appellants have used such credit for payment of duty for clearance of imported raw materials, they would not be in a position to use the same at the time of clearance of the final product. As such at this stage by treating the said reversal as proper, I dispense with the condition of pre-deposit and remand the matter to Commissioner (Appeals) for decision on merits without insisting on any pre-deposit. - Stay granted.
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2015 (10) TMI 1144
Duty demand - Compounded levy scheme - Determination of Annual Capacity of Production - ‘Hot air Stenter' - Independent Textile Processors - Held that:- Issue has been decided by this very bench in the case of Sanoo Fashion Pvt. Ltd.(2010 (6) TMI 712 - CESTAT AHMEDABAD), where the Tribunal by relying the Hon'ble High Court of Madras and allowed the appeal. I find that the lower appellate authority has not considered the Hon'ble High court of Madras's order and relied the Hon'ble High Court of Gujarat's decision in the case of Ambuja Cements Vs. UOI. Both the lower appellate authority and the Tribunal joined by the decision of Hon'ble High Court of Madras order in the case of Beauty Dyers (2001 (12) TMI 95 - HIGH COURT OF JUDICATURE AT MADRAS) and the Hon'ble High Court has held that the impugned order was set aside as ultra vires. - demand of duty is not sustainable. - Decided in favour of assessee.
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2015 (10) TMI 1143
Duty demand - Shortage of goods - Clandestine removal of goods - Held that:- Three transporters namely M/s. Saurashtra Carrying Corporation, M/s. Jay Gujarat Goods Carrier, and M/s. Madhuvan Roadways accepted transporting of the goods to various parties without cover of invoices. There are two parties, who confirmed the receipt of the goods without invoice. The Director of the appellant company accepted in his statement clandestine removal of the goods. I find that the lower authorities had given detail finding on the clandestine removal of the goods. Hence, there is no merit in the submission of the learned advocate. However, I find that the Adjudicating Authority had not given the option to pay penalty of 25% of duty within specified period under Section 11 AC of the Central Excise Act, 1944. - appellant is given an option to pay penalty 25% of duty alongwith entire amount of duty and interest within 30 days, from the date of communication of this order as per provision of Section 11AC of Central Excise Act, 1944 - Appeal disposed of.
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2015 (10) TMI 1142
Denial of CENVAT Credit - credit on CVD debited from DEPB scrips - Held that:- It is a selective nature of audit and cannot be established the knowledge of the Department. On perusal of the impugned order, I find that the Respondent had filed the monthly returns for the months of June, 2004 and July, 2004 under Rule 7 of Cenvat Credit Rules, and the details like Bill of entry No., date, name of the supplier, description of the goods, tariff heading No., duty paid etc. were shown. In any event, there is a detailed finding on this issue in the order of the Commissioner (Appeals). - No Reason to interfere of the order of the Commissioner (Appeals) - Appeal disposed of.
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2015 (10) TMI 1141
Denial of CENVAT Credit - Sales Commission paid to the Foreign Commission Agent - Held that:-respondent took a stand before the lower authorities that they paid amount on sales promotion activities. No finding was given by the lower authorities. It has also contended that, the demand of tax on the ground that the appellant availed credit on the basis of invoices issued by ISD before registration, which is covered by the decision of the Tribunal, which are also not examined. In my considered view, the Adjudicating Authority should have examined the sales promotion activities as contended by the Learned Advocate. It is also required to examine the case laws in respect of the other issues raised by the respondent. - Matter remanded back - Decided in favour of Revenue.
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2015 (10) TMI 1140
Duty demand - Benefit of notification No. 7/97-CE dated 01.02.97 - Held that:- when TAPL becomes liable to duty, then such liability in its hands should be determined in accordance with law following the due process of natural justice. Therefore, if a limited remand of the matter is made to determine the assessable value of the ingots, then there may not be difficulty to work out duty liability of TAPL. Ld. Counsel at this stage says that ld. adjudicating authority upon remand shall examine applicability of notification No. 214/86-CE dated 25.03.86 TAPL. So also he has to examine applicability of notification No. 7/97-CE dated 1.3.97. Ld. adjudicating authority shall accordingly do well to examine this aspect during re-adjudicating the matter of TAPL. - Decided in favour of assessee.
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2015 (10) TMI 1139
CENVAT Credit - exemption under Notification No.30/2004-CE, dt.09.07.2004 - Held that:- Appellant has already reversed the credit lying in their CENVAT account before issue of the Show Cause Notice - It is consistently viewed by the Tribunal that the benefit of Notification No.30/2004-CE cannot be denied on the ground that CENVAT Credit was reversed after clearance of the goods. It is noticed that in the present case, the Appellant reversed the credit. We find that the Tribunal in the case of Omkar Textiles Pvt. Ltd (2013 (10) TMI 1298 - CESTAT AHMEDABAD) held that the quantum of CENVAT Credit reversed and there is no suppression of fact with intent to evade payment of duty and the extended period of limitation cannot be attracted. - Decided in favour of assessee.
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2015 (10) TMI 1138
Demand of CENVAT Credit along with interest - whether the appellant is liable to the interest on ₹ 1,58,775/- or ₹ 48,386/- during the intervening period. - Held that:- I have gone through the decision of Ind-swift Laboratories (supra) and decision of Strategic Engineering (supra) wherein the decision of Ind-swift Laboratories was considered and thereafter relying on the decision of Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT] wherein the Hon ble High Court have considered the decision of Apex Court in the case of Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court] and held that if the Cenvat credit availed by the assessee wrongly but same has been reversed before utilization of the same, no interest is payable by the assessee. In these circumstances, relying on the decision of Strategic Engineering P Ltd. (2014 (11) TMI 89 - MADRAS HIGH COURT), I hold that appellant is required to pay interest only on ₹ 48,386/- during the intervening period. - Therefore, if the appellant is not contesting the merits of the case, the penalty is not imposable on the appellant in the light of M/s. Atul Ltd. vs. CCE, Surat [2012 (10) TMI 826 - CESTAT, AHMEDABAD]. Therefore, I hold that penalty on the appellant is not imposable. - Appeal disposed of.
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2015 (10) TMI 1137
Denial of CENVAT Credit - Imposition of penalty - Held that:- Supreme Court in the case of MDS Switchgear Limited (2008 (8) TMI 37 - SUPREME COURT ) held that the Respondent manufacturer, to avail the benefit of CENVAT credit paid by the supplier manufacturer is to the quantum of duty already determined by the jurisdictional Revenue officers of the supplier unit, cannot be contested or challenged by the officers in charge of recipient unit. In view of that, I do not find any reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue.
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2015 (10) TMI 1136
Rectification of mistake - Imposition of penalty - Held that:- applications are not in the nature of rectification of any mistake apparent on the record and therefore not entertainable. - Moreover in view of the judgment of Hon'ble High Court of Punjab and Haryana in the case of Vee Kay Enterprises vs. Commissioner of Central Excise, reported in [2011 (3) TMI 133 - PUNJAB AND HARYANA HIGH COURT],the said decision of the Larger Bench of the Tribunal [2006 (10) TMI 146 - CESTAT, NEW DELHI [LB]] does not hold the field any more. - Rectification denied.
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2015 (10) TMI 1135
Duty demand - Clearance of goods without payment of duty - Rejection of request on ground that in terms of the provisions of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, they were required to execute a fresh bond in terms of Rule 3 of these rules backed by a bank guarantee for the sufficient amount to cover the duty involved on the goods being procured free of duty, but they have not furnished such bond or bank guarantee. - Held that:- In terms of Notification issued under Rule 19 for duty free procurement of the goods for use in the manufacture of the goods for export the manufacturer is required to follow the procedure prescribed under the 2001 Rules and in accordance with Rule 3 of these Rules, he is required to furnish a bond backed by security in form bank guarantee to cover the duty involved on the goods procured free of duty. However in terms of the Board’s circular the condition of furnishing security has been waived in the case of certain category of exporters and one of them is star trading house. The appellant have produced a certificate issued by Ministry of Commerce certifying their status as Star trading house. Hence in view of the Board’s circular mentioned above, they would be required to furnish only the bond as prescribed in Rule 3 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 and this bond need not be backed by the bank guarantee. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1134
Demand of differential duty - Section 11A - Held that:- Audit has raised objection on the clearance of capital goods on the ground that they have paid excise duty on the lesser value instead of working out correct depreciation value and accordingly demanded differential duty of ₹ 65,043/-. From the above record, it is clearly evident that audit report was communicated by the jurisdictional Range Superintendent on 6.8.2004 only demanding differential duty of ₹ 65,043/- whereas the show cause notice was issued on 6.10.2005. Therefore, it is clearly evident that there is no suppression of facts. The department was well aware of the facts on 6.8.2004 itself when the return was filed in April 2003. Even by taking into account letter dt. 6.8.2004, the demand should have been issued within one year whereas it is clearly established that demand is hit by limitation. It is evident from the records that capital goods have been imported on 9.8.95 under EPCG scheme and subsequently cleared to their sister unit on payment of duty. As clearly seen from audit para raised by the department, which was communicated by the jurisdictional Superintendent by demanding only differential duty on account of wrong calculation of depreciation value. There is no allegation of any contravention of provisions of rules. Accordingly, there is no suppression of facts or intention to evade payment of duty. The impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 1133
Denial of CENVAT Credit - whether the glass bottles which were used for filling/packing of the aerated waters and which in course of manufacture of aerated waters were broken, and were cleared as glass scrap are excisable - Held that:- Since, CENVAT Credit had been taken in respect of the glass bottles, at the time of clearance of glass scrap, duty would be payable. However, we find that during the period of dispute there was no provision in the CENVAT Credit Rules, 2001/2002 providing that when CENVAT Credit availed inputs are cleared as waste, some amount in respect of the same is required to be paid - During the period of dispute, there was no such provision. Moreover, the department in these cases, has demanded Central Excise Duty by treating glass waste as manufactured product and this issue has been examined in the Tribunal's judgment cited by the ld. Counsel for the appellant on the basis of the section 2 (d) of the Central Excise, Act, 1944. In view of this, we hold that the judgment of the Tribunal in the case of Commissioner of C. EX., Delhi Vs. Dhillon Kool Drinks & Beverages Ltd. (2000 (9) TMI 550 - CEGAT, NEW DELHI) the civil appeal against which has been dismissed by the Apex Court vide judgment reported in [2001 (5) TMI 942 - SUPREME COURT] and also judgments of Tribunal in the cases of Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. Commr. Of EX., Mumbai reported in [2003 (6) TMI 346 - CESTAT, MUMBAI], Ponna Bottling Co. Ltd. Vs. Commissioner of Central Excise, PUNE-II reported in [2001 (6) TMI 390 - CEGAT, MUMBAI], Charminar Bottling Co. (P) Ltd. Vs. Commissioner of C. EX., Hyderabad reported in [1999 (11) TMI 538 - CEGAT, NEW DELHI], would be applicable to the facts of this case. - impugned order is, therefore, not sustainable - Decided in favour of assessee.
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2015 (10) TMI 1132
Denial of exemption claim - Notification No.2/2001-CE, dt.27.01.2001 and Notification No.16/2001-CE, dt.26.03.2001 - Held that:- In de-novo proceedings, the Commissioner of Central Excise, accepted the reversal of credit on the inputs in respect of the clearance of the exempted goods and dropped the proceedings. This fact was not disputed by both the sides. We find that from the impugned order that the period of dispute in the present two show cause notices are covered in respect of other five show cause notices. So, it is clearly evident that the Appellant reversed the credit utilized on the inputs used in the manufacture of exempted final product. This fact was also accepted by the Department. As the period of dispute in the present case is covered in the earlier five show cause notices where the demand was dropped, the appeal filed by the Revenue in respect of said Show Cause Notices cannot be sustained. - Decided against Revenue.
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2015 (10) TMI 1131
Waiver of pre deposit - Denial of exemption claim - Held that:- We have very limited scope at this stage to appreciate merits of each other. Therefore, to grant early opportunity of hearing to appellant, and to do justice to both sides, appellant is directed to make a predeposit of ₹ 1,00,00,000 in five equal monthly instalments of ₹ 20 lakhs each by 30 th of each month. The first instalment shall be paid by 30.5.2015 and thereafter by 30 th of subsequent four months. Within a week of such deposit, appellant shall submit copies of challans as proof of deposit to the adjudicating authority, Commissioner (Appeals) and office of learned CDR to ensure that compliance has been made to the direction above. Failure to make deposit of any of the instalments, shall render this order vacated and appeals stand dismissed. - Decided conditionally in favour of assessee.
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2015 (10) TMI 1130
Restoration of appeal - Power of Committee of disputes - Held that:- When the appeal was dismissed by the Tribunal, it was conscious of the law declared in the ONGC case reported in [1991 (10) TMI 58 - SUPREME COURT OF INDIA] as to resolution of dispute between Union of India and Central PSUs of this country. It transpires from the minute of the Committee on Disputes under Sl.No.31 that appellant was permitted to contest appeal only on levy of penalty. It clearly demonstrates that the appellant was estopped to contest beyond the scope of decision of the Committee on Disputes on any other aspect. Further, the appellant has come after 7 years to the Tribunal for restoration of its appeal. It could not keep its appeal alive going to the higher court. It is therefore difficult to restore the appeals since the Tribunal does not have power to review its own orders in absence of specific provision in law granting power of review. Further, even though penalty was not imposed in the adjudication, there was no permission to litigate on duty demand. - decision of Committee on Disputes is no more requirement according to judgement of Supreme Court in ECIL case (2011 (2) TMI 3 - Supreme Court). But there is specific denial by Committee to dispute further probably to prevent wastage of time of the court as well as resources of the country. Therefore, appellant is not permitted to litigate further with Revenue. - Decided against assessee.
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2015 (10) TMI 1129
Denial of abatement claim - Surrender of registeraion - production of gutkha - Held that:- In this case the Government of Chhattisgarh has banned the manufacture of tobacco products w.e.f. 26.07.2012. This ban on manufacture of tobacco was in public domain and appellant has also stopped manufacturing w.e.f. 26.07.2012 itself. Appellant has also intimated to the department for sealing of their machines w.e.f. 26.07.2012 and surrendered their registration certificate on 31.07.2012. It is a fact on record after that appellant has not started any manufacturing or requested for de-sealing of machines. In these circumstances, appellant has complied with condition of Rule 16 of the said rules and entitled for abetment of refund of duty paid for the period 27.07.2012 - 31.07.2012. - Decided in favour of assessee.
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2015 (10) TMI 1128
Duty demand - Imposition of penalty under Rule 9(2) read with Rule 173Q - Clubbing of clearances - Held that:- There was no material on record to suggest that fictitious units were in reality manufacturers. Those were neither registered with the Excise Authorities nor machinery were installed by them to carry out manufacture. There is no evidence of any purchase of raw material, consumable or packing material nor payment of electricity charges to prove manufacture was made. There was also no muster roll of the workers engaged. No registration under the PF Act or ESI Act was made to disclose identity of workers. Therefore, appellant failed to contradict allegations of Revenue in absence of credible evidence led by it. Accordingly, Revenue succeeds on the allegation of creation of fictitious units by the appellant and clubbing sustains. Clubbing of fictitious units by the appellant and clubbing sustains. Clubbing is accordingly confirmed and adjudication on this score sustains with levy of duty in adjudication untouched by this order subject to recomputation due to valuation defect caused by Revenue. There was no allegation as to under-valuation in the show-cause notice. There is also no evidence on record from Revenue to prove that there was under-valuation of the clearances made. Therefore, adjudication on such count of arbitrary valuation fails and value disclosed by appellant shall be followed to recompute duty liability of appellant on clubbing all four clearances. - Decided partly in favour of assessee.
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2015 (10) TMI 1127
Denial of CENVAT Credit - whether the appellant is entitled to take Cenvat Credit on the items mentioned here in above in para 1 or not as capital goods or input thereof - Held that:- On going through the certificate produced by the Charted Accountant which shows that except items iron and steel bars all other items are used for either fabrication of capital goods or part of capital goods or used as input by the appellant in manufacturing of the final product. Revenue has not produced any contrary evidence to the report of the Charted Engineer. - Admittedly in this case whether the appellant is entitled to take Cenvat Credit on the items discussed here in above in para 1 is a fact whether they have been used by the appellant for fabrication of capital goods or part of capital goods or used as input in manufacturing of final product or not. This fact is ascertainable by the report of the Charted Engineer produced before me. Therefore, except for the iron and steel bars I allow Cenvat Credit to the appellant as usage of iron and steel bars have not been discussed by the Charted Engineer in his report. Further, the Ld. Counsel for the appellant has also contested the issue of limitation on the ground that show cause notice has been issued on 24.02.2012 for the period 2007-08 to 2011-12 as issue was settled by this Tribunal in the case in the case of Vandana Global [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ]. Therefore, I hold that for the period prior to 30.04.2010 extended period of limitation is not invokable. In these circumstances, whatever the demand pertains to the period 30.04.2010 till 31.03.2012 pertaining to denial of Cenvat Credit iron and steel bars used by the appellant is denied - Appeal disposed of.
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2015 (10) TMI 1126
Duty demand - Exemption claim - Bar of limitaton - Held that:- As the issue involved in these cases is admissibility of exemption under Serial No. 12 of the Notification No. 14/2002-CE dated 01.3.2002 has been decided in favour of the appellants [2014 (11) TMI 79 - CESTAT AHMEDABAD], therefore, all these appeals are allowed on merits. The plea of time bar nature of demands raised by the appellants is not deliberated upon by this bench as on merits the appeals filed by the appellants stand allowed. - Appeal disposed of.
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2015 (10) TMI 1125
Duty demand - Assessee contends that on the date of issue of Show Cause Notice dated 15.04.2002, the provisions of Rule 57-I of the said Rules, 1944 was not in existence in the statute and the demand of Central Excise duty can not be confirmed under the erstwhile Central Excise Rules - Held that:- Issue raised by the appellant was not raised before the lower authorities. Hence, it is appropriate that the matter should be remanded to the adjudicating authority to examine the facts of law of the case in the interest of justice. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1124
Restoration of appeal - Bar of limitation - Held that:- Commissioner (Appeals) is in error in holding that the date of service on the appellant is 18/4/09 without proof of the same available on record. That the impugned order is vitiated and is against the provisions of law. I accept the date of service of order as 23/6/09 as claimed by the appellant in view of no facts on record to the contrary. Accordingly, I set aside the impugned order and direct the learned Commissioner (Appeals) to hear the appellant on merits and dispose of the appeal in accordance with law - Decided in favour of assessee.
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2015 (10) TMI 1123
Imposition of penalty - Compounded levy scheme - Violation of Chewing Tobacco and Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules 2010 - Held that:- show cause notice has been issued on 26.09.2011. Therefore, the Panchnama dated 30.03.2012 have no relevance to impose penalty on the appellant in this case. Further, I find that in show cause notice itself it is recorded that appellant was engaged manually with laborers for packing the tobacco pouches and paying Central Excise duty under section 3 of the Central Excise Act 1944 and filing their returns regularly. In these circumstances, the impugned order deserves no merits. Accordingly, same is set aside and by holding that no penalty is imposable on the appellant as appellant has not violated the provisions of Rule 6/8 of the Chewing Tobacco And Unmanufactured Tobacco Rules (Capacity determination and Collection of Duty) Rules. - Decided in favour of assessee.
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2015 (10) TMI 1122
Duty demand - DTA Clearances - Refund claim - Education Cess and SHE Cess - Held that:- To regularize the payment under their respective accounting head, the Appellant should claim the refund of excess paid Education Cess and SHE cess and the Appellant should deposit the same under the accounting had of Basic Excise Duty. The decision relied upon by the learned Advocate in the case of M/s Pepsico India Holding Pvt. Ltd (2010 (4) TMI 521 - CESTAT NEW DELHI) is for transfer of amount in PLA from BED to SED. Single Member Bench decision of this Tribunal relied by learned Advocate in the case of M/s Gaula Closure (India) Ltd (2008 (5) TMI 50 - CESTAT, AHMEDABAD) had not considered the Board circular. The learned Advocate submits that they have filed refund claim of excess amount paid under Education Cess and SHE Cess. We direct the Adjudicating authority to consider the issue in accordance with law - No reason to interfere the order of Commissioner (Appeals) - Decided against assessee.
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2015 (10) TMI 1121
Denial of CENVAT Credit - CENVAT credit on the invoices issued by the Headquarters as ISD distributor as the Cenvatable documents issued by the Service provider are in the name of their Headquarters - Held that:- It is the case of the appellant that no credit of inadmissible Services has been passed on by the ISD to the main appellant and where any such inadmissible credit was taken, the same was reversed. It is observed that the issue revolves around the fact whether Head Office of the main appellant has passed on the service tax credit only with respect to Services utilized in the manufacture of dutiable products. This can be done by the Adjudicating authority by getting the suitable verifications made with respect to service tax credit taken at the Headquarters of the main appellant. In view of the case laws relied upon by the appellant, reversal of inadmissible credit alongwith interest amounts to not taking the credit. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1120
Interpretation of Notification No. 43/2001 dated 26.6.2001 - whether notification has to be interpreted to mean that export has to be made by the appellant only or the goods are to be exported - Held that:- The spirit of the notification being to export the goods manufactured using duty free raw material irrespective of the person who exported the same there should not be controversy to bring the appellant to the jaws of the levy. Added to this, the appellant was granted permission for clearing the duty free raw material for use in export of the finished goods supported by proof of export, appellant succeeds - Decided in favour of assessee.
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2015 (10) TMI 1119
Denial of CENVAT Credit - Credit on CVD - Capital goods - held that:- The appellant took Cenvat credit on CVD paid on these capital goods. Some part of the capital goods was found to be defective and same was re-exported for repairs. The appellant reversed the Cenvat credit attributable to the parts exported for repairs. After repairs the capital goods received back by the appellant after CVD paid on the value addition done on account of repairs. The appellant took the Cenvat credit on CVD paid on value addition plus Cenvat credit reversed at the time of export. From the above facts it is clear that when the goods were sent for repairs by the appellant they have reversed the credit. Therefore, appellant are entitled to take Cenvat credit on receipt of the capital goods after repairs. In these circumstances, I hold that appellant is entitled to take Cenvat credit and Cenvat credit denied by the lower authorities is totally incorrect. - Decided in favour of assessee.
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2015 (10) TMI 1118
Denial of CENVAT Credit - Bogus invoices - Invoices without actual receipt of goods - Held that:- No investigation was conducted at the end of the appellant. No cross-examination of the persons whose statement has been relied upon to deny the Cenvat credit was afforded to the appellant. Therefore, as held by this Tribunal in the case of Arya Fiber [2013 (11) TMI 626 - CESTAT AHMEDABAD] I hold that without cross-examination of the persons whose statement has been relied upon by the department, to deny the Cenvat credit to the appellants, demand is not sustainable. Consequently, I hold that appellant has correctly taken the Cenvat credit. Hence, impugned order is set aside. Decided in favour of assessee.
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2015 (10) TMI 1117
Penalty u/s 11AC - Shortage of goods - Held that:- If there is only shortage and no cogent evidence has been produced. Therefore, charge of clandestine removal of the goods is not sustainable. Admittedly, in this case except shortage no cogent evidence has been produced on record. Further, I find that to impose penalty under Section 11AC read with Rule 25 of the Central Excise Rules 2002, the ingredients of provision of Section 11AC are necessary, i.e., fraud, collusion, wilful misstatement, suppression of facts or contraventions of provision with an intent to evade payment of duty. Admittedly, all these ingredients are absent in the case. Only there is a mere shortage of stock. Therefore, I hold that penalty under Section 11AC or Rule 25 of the Central Excise Rules, 2002 is not imposable on the appellant. - Decided in favour of assessee.
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2015 (10) TMI 1116
Admissibility of CENVAT Credit - M.S. channels, angles, beams, plates, H.R. Coils etc - Intention of evasion - Held that:- So far as the admissibility of CENVAT Credit on the items involved in these proceedings is concerned, the appellant relied upon the judgment of Hon ble Supreme Court in the case of CCE Jaipur Vs M/s Rajasthan Spinning & Weaving Mills Ltd (supra). In this case before Apex Court, steel plates and M.S. channels were used in the fabrication of chimney as capital goods under Rule 57Q of the Central Excise Rules, 1944. It was held by the Apex Court that any item used for fabrication of the chimney has to be treated as an accessory of the machinery under Rule 57Q of Central Excise Rules, 1944. - it is observed from the Chartered Engineer s certificate dt.25.03.2010 relied upon by appellant that the items involved in these proceedings were used not only for installation of plant/machinery but also used for replacement of damaged/worn out parts of the machines. No separate quantities and corresponding CENVAT Credit are available as to which quantity has gone for use in the making of support structures/foundations of Plant & Machinery and what quantity has been used for replacement of damaged/worn out parts of the capital goods. In the absence of any such details, the matter is required to be remanded back - Appellant should also produce a specific Chartered Engineer s certificate to the adjudicating authority clearly bringing out the quantity used in the replacement of damaged/worn out parts of the capital goods and the corresponding CENVAT Credit involved. - Matter remanded back - Decided in favour of assessee.
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2015 (10) TMI 1115
Waiver of pre deposit - Condonation of delay - Held that:- First appellate authority has dismissed the appeal filed by the appellant before him on the ground that appellant has filed appeal belatedly by 118 days. I concur with the views expressed by learned first appellate authority that he has no powers to condone the delay beyond 30 days in filing of appeal before him. This law is now well settled by the Apex Court in the case of Singh Enterprises, [2007 (12) TMI 11 - SUPREME COURT OF INDIA]. - No reason to interfere in the impugned order. - Decided against assessee.
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CST, VAT & Sales Tax
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2015 (10) TMI 1299
Whether bill of entry was not a valid document or invoice and, therefore, the penalty u/s 86(19) of the DVAT Act has been correctly imposed - impounding order u/s 59/61 of the DVAT and recorded the reason for doing so as: "Goods without Bill" - Held that:- there is no mention of the absence of GRs in the “Mal Roko Aadesh‟. The only reason cited is that the goods were 'without bill". The relevant documents of import, including the B/E, customs certificate etc. were produced by the dealer on the next day along with the letter dated 29th July 2011. - The third reason mentioned in the opinions of the majority is that the statement of the driver substantiated the case of the VATO. This statement was, however, never put to the Appellant and has been held to be inadmissible - there was no legal justification for issuance of the impugned penalty order under Section 86 (19) of the DVAT Act. - Decided in favour of assessee.
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2015 (10) TMI 1298
Imposition of penalty under Section 53 (12) - movement of goods in the disguise of movement in the course of export to avoid tax liability - Held that:- Invoice dated 07.03.2006 also shows the name of Pepsico India Holdings Private Limited, Gurgaon, Haryana. Thus, the invoice is raised in the name of Company situated in India. However, in one of the columns it is mentioned that export is sought to be made to Riyadh. Therefore, prima facie, the documents which were available at the check-post as also before the Addl. Commissioner who conducted the suo moto proceedings would clearly indicate that the appellant sought to transport goods from Belgaum to Mumbai and the consignee of the goods was M/s. Pepsico India Holdings Private Limited, Gurgoan. In the light of the documents produced by the appellant himself which clearly indicate the names of the consignor and consignee are two Indian companies. - transaction is within the country. Therefore, the argument on behalf of the appellant that the goods were being exported directly by the consignor cannot be countenanced. - Additional Commissioner has rightly recorded the finding of Appellate Authority and restored the penalty imposed in original proceedings. No exception can be taken to the findings recorded and conclusions arrived at by the Additional Commissioner. - Decided against assessee.
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