Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

In Re : Naaz Leather Finishers

2016 (2) TMI 182 - SETTLEMENT COMMISSION

Settlement of a case - Eligibility to avail the benefit of the SSI exemptions No. 8/2003-C.E - benefit of cum duty price - Held that:- The applicant has admitted duty liability on a cum-duty basis. The Revenue has not given any reason as to why cum-duty benefit may be denied. There is also no charge that the applicant cleared goods clandestinely nor is there any charge against M/s. Bata India that they procured goods from the applicant without payment of duty. Under the circumstances the Bench h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pplicant are responsible for any activity in their factory premises. This is not sufficient to establish any culpability. - The Bench accordingly finds that the applicant has made full and true disclosure and has cooperated in the proceeding during the investigation as well as before the Commission. In view of above and the facts and circumstances of the case, the Bench settles the case under Section 32F(5) - immunities to the applicant granted under sub-section (1) of Section 32K of the Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

31-7-2013 (in short the SCN ) issued by the Additional Commissioner of Custom, Central Excise & Service Tax, Kanpur (hereinafter referred to as the Revenue ). Sr. No. Name of the Applicants with address Settlement Application No. Date of filling 1. M/s. Naaz Leather Finishers, 14-A, 150 ft. road, Jajmau, Kanpur - 208010 (UP) (hereinafter referred to as the applicant or main applicant ) 4433 1-9-2014 2. Mr. Iqbal Hussain, C/o M/s. Naaz Leather Finishers, 14-A, 150 ft. road, Jajmau, Kanpur - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ur - 208010 (UP) (hereinafter referred to as the co-applicant No. 4 ) 4437 1-9-2014 2. M/s. Naaz Leather Finisher, 14-A, 150 Ft. Road, Kanpur is a partnership concern and are engaged in the manufacturing of Leather Shoe Upper (falling under CSH No. 6403) for M/s. Bata India Ltd. and also manufacturing finish Leather falling under CSH No. 4107 or 4112 or 4113, 4114, 4115, which attracts nil rate of duty in the tariff. The applicant has taken Central Excise registration No. AAABFN1189NEM002 o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant was also manufacturing and clearing finished leather falling under CSH No. 4107 or 4112 or 4113, 4114, 4115 of CETA, 1985 but did not include the sale value of finished leather, which is chargeable to nil tariff rate. Further on enquiry the applicant informed that they are manufacturing both the above said excisable items in the same premises. From 2011-12 they have started paying Central Excise duty on leather shoe upper manufactured for M/s. Bata India Ltd. from beginning of the financial .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 On enquiry from the applicant regarding supply of leather shoe upper to be supplied to M/s. Bata India Ltd. the applicant vide their letter enclosed the purchase order and a leather shoe upper on the inner sole of which Tarun was printed with ink. On perusal, it appeared that the applicant had manufactured said shoe upper in the brand name of Tarun as per the requirement of M/s. Bata India Ltd. and also since the party was manufacturing leather shoe upper only for M/s. Bata India Ltd. the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

attracts nil rate under the tariff but are excisable goods. Therefore no SSI exemption is admissible during 2008-09, 2009-10 and 2010-11. 7. After completion of the investigations, the SCN was issued proposing :- (i) Central Excise duty amounting to ₹ 21,51,725/- for the period 2008-09 to 2010-11 should not be demanded and recovered, from them under proviso to Section 11A(1) of the Central Excise Act, 1944 alongwith interest under the provisions of Section 11AA (previously Section 11A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taking registration; 7.1 Penalty was also proposed on the co-applicant No. 1 , 2 , 3 & 4 in the SCN under the Act. 8. The applicant in their settlement application has submitted that the SCN demanded duty of ₹ 21,51,725/- from the applicant, which has been calculated in respect of clearance of leather shoe upper from the financial year 2008-2009 to 2010-2011, in terms of the Notification No. 8/2003, dated 1-3-2003 taking the clearances of applicant as clearance of Brand of M/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

financial year 2008-09 were within the exemption limit of ₹ 1.50 crore, no duty liability was made out against the applicant. Further in the financial year 2008-09 and 2009-10, the aggregate clearances are above 4 crore, as such the applicant is liable for duty from the first clearances and liable for duty ₹ 9,70,242/- only in the financial year 2009-10 and 2010-11, which has been arrived at after availing benefit of cum duty price. Hence, (a) Central Excise duty liability of the app .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on admitted duty liability. (c) full immunity from imposition of penalty, prosecution and fine may be granted to the applicants. (d) That late fee/penalty for filing of returns may kindly be waived. 9. The applicant was served with notice for proceeding with the application on 4-9-2014 asking about the duty payable has been adjusted from Cenvat credit, and to explain as to how the Cenvat credit was available at that time and as to how the same has been utilized in respect of the final produ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t being under a bona fide belief that they are eligible for SSI exemption has not taken any registration and by way of SCN, it came to the notice of the applicant that SSI Exemption is not available to them. The applicant during the disputed period had purchased inputs and machinery indigenously and also imported inputs and machinery on payment of Cenvat and/or AED equivalent to Cenvat, which have been specifically used in the manufacture of Shoe Uppers. Hence, the credit of said purchase and im .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llowed to be proceeded with on 5-9-2014. The report under Section 32F(3) of the Act was called for from the Revenue. 12. The Revenue vide their letter C. No. V(15)Off/Adj/CE/143/2013, dated 20-3-2015 submitted that the main applicant is registered with the Central Excise Department w.e.f. 6-5-2011 having Registration No. AAABFN1189NEM002. They took registration only after requirement of taxable invoice to their client M/s. Bata India Ltd. Even if their aggregate clearance is less than ͅ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r exemption under Notification No. 8/2003, dated 1-3-2003. The duty liability upon the applicant is from 2008-09 to 2010-11 amounting to ₹ 21,51,725/- and not ₹ 9,70,242/- as claimed by the applicant. Further, the admissibility of Cenvat credit is governed by procedure/documentation as laid down in Cenvat Credit Rules, 2004, which the applicant has not complied with. In these circumstances, the applicant cannot be permitted to take credit for the past year during the course of which .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as a SSI unit and was under the impression that there was no need for him to take Central Excise Registration as a SSI Unit, The applicant had started paying Central Excise duty on leather shoe upper from 2011-12. The department s contention that all excisable goods cleared from the factory of the applicant was more than ₹ 4 crore for the year 2008-09, 2009-10 and 2010-11 and therefore, SSI exemption was not admissible, is not correct. Also according to the department, the shoe upper manuf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

emand of ₹ 21,51,725/- the applicant had admitted the demand of ₹ 9,72,042/- on a cum duty basis. The ld. Advocate submitted that for the year 2008-09, the benefit of SSI was admissible to them as the clearance in preceding financial year had not crossed the stipulated limit. The ld. Advocate further submitted that it was a case of interpretation of notification and there was no suppression or misdeclaration of information. On this basis he requested for waiver of penalty and immunit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2002-Central Excise, dated the 1st March, 2002, published in the Gazette of India vide number G.S.R. 129(E), dated the 1st March, 2002, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecified thereon in the Second Schedule to the said Central Excise Tariff Act, 1985 (herein after referred to as the Second Schedule), as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table : the table of the notification is as follows : TABLE S. No. Value of clearances Rate of duty (1) (2) (3) 1. First clearances up to an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding financial year, (amended to rupees four hundred lakh vide Notification No. 10/2005-C.E., dated 1-3-2005) 13.1 The effect of the notification is that if an assessee has an aggregate value of clearances of excisable goods of less than 4 crores in a particular year, the assessee becomes eligible to avail the benefits of the notification in the following financial year pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f this notification (A) brand name or trade name means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person; (B) where the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Revenue has inter alia contended that the applicant is not eligible to avail the benefit of the SSI exemptions under the aforesaid notification on the ground that (a) the aggregate value of clearances, as per the balance sheets of the applicant, were more than 4 crores in the financial years 2008-09, 2009-10 and 2010-11 and as such was not eligible to avail the benefit of the notification 8/2003-C.E. (b) the applicant also included clearances of the leather shoe upper made for Bata India under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as it has a material bearing on the computation of aggregate value of clearance in the year 2007-08 and therefore on the eligibility of the applicant to avail the notification benefit in the year 2008-09. 13.5 The revenue has cited the procurement order dated 8-1-2013 from Bata India to contend that Tarun is a brand name belonging to M/s. Bata India. The applicant on the other hand have produced a letter from M/s. Bata India stating that they do not have any such brand name nor do they sell .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e, the Bench accepts the evidence of M/s. Bata India that they do not own or sell any product under the brand name Tarun . 13.6 Accordingly the Bench holds that for the year 2007-08, the aggregate clearance of ₹ 3.6 crore, made the applicant eligible for availing benefits of the Notification 8/2003-C.E. in the financial year 2008-09. 13.7 Both the Revenue and the applicant have pointed out that the applicant is manufacturing excisable goods viz. leather shoe upper for M/s. Bata I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e leather shoe upper for M/s. Bata India was ₹ 1,38,53,264/- crore. As such the applicant were well within the overall limit of clearance of ₹ 1.5 crore, where the duty under the Notification 8/2003-C.E. was NIL. The finished leather goods were in any case subject to NIL rate of duty. The applicant has therefore rightly contended that the there was no duty liability on them for the year 2008-09. 13.8 For the years 2009-10 and 2010-11, the applicant has admitted that since the ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot taken registration earlier as they were under a mistaken belief that as the goods were not subjected to any duty they did not require any registration. This argument is not believable as they well aware of the Notification 8/2003-C.E. and their eligibility for the exemptions contained therein. Part knowledge and selective ignorance is a poor argument. The Bench accordingly holds that the applicant violated the provisions of the Central Excise Act, 1944 and are liable for penalty. 13.9 So .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

where payment of central excise duties is clearly shown. The applicant has also produced copies of Bills of entry and related documents as proof of import of capital goods. The scheme of Cenvat credit envisages avoidance of cascading effect of taxation and duty paid goods are procured, the assessee is allowed to avail credit of duty paid. The Revenue has not questioned the authenticity of these documents. As such the Bench Finds that there is a substantial compliance of the Cenvat scheme and the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and through import. 13.10 The applicant has admitted duty liability on a cum-duty basis. The Revenue has not given any reason as to why cum-duty benefit may be denied. There is also no charge that the applicant cleared goods clandestinely nor is there any charge against M/s. Bata India that they procured goods from the applicant without payment of duty. Under the circumstances the Bench holds that in terms of the Supreme Court judgment in the case of Commissioner of Central Excise, Delhi v. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny culpability. 13.12 The Bench accordingly finds that the applicant has made full and true disclosure and has cooperated in the proceeding during the investigation as well as before the Commission. In view of above and the facts and circumstances of the case, the Bench settles the case under Section 32F(5) of the Act on the following terms :- Central Excise Duty : The total Central Excise duty in this case is settled at ₹ 9,72,042/- (Rupees nine lakh seventy two thousand forty t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version