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ICOMM Tele Ltd. Versus CC, CE&ST, Visakhapatnam-II

2016 (10) TMI 821 - CESTAT HYDERABAD

Clandestine removal of goods - non inclusion of packing charges in the value - non-payment of duty in respect of goods cleared by declaring value as 'NIL' - wrong availment of CENVAT Credit to the tune of in respect of goods meant for 'installation & commissioning - removal of capital goods in contravention of CENVAT Credit Rules, 2004 - clearing certain goods under a document "to whom so ever it may concern" and Delivery Note (Way Bill) mentioning the purpose as 'testing', without mentioning an .....

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nts and materials in their defence, which should be properly analysed and correlated to arrive at well reasoned findings with regard to the veracity or otherwise of the contentions of the appellant. All the issues are kept open - Appeal allowed - matter remanded. - Appeal No. E/25818/2013 - ORDER NO.A/30783/2016 - Dated:- 26-8-2016 - Ms. Sulekha Beevi, C.S., Member(Judicial) And Shri Madhu Mohan Damodhar, Member(Technical) Shri G. Natarajan, Advocate for the appellant. Shri Arun Kumar, Deputy Co .....

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.O. No. CT/PO/369-10 dated 22.10.2009 for the supply of Next Generation Play Network (GEPON) Equipment from M/s. BSNL, New Delhi. They later secured Purchase Order No. dated 08.07.2010 for Supply, Installation, Commissioning and Maintenance Support of WiMAX equipment in BSNL network on turnkey basis for Project-2 and were supplying the goods as required under the said Purchase Orders. 1 .2 During verification of records, it appeared to the Department that appellants are clearing certain goods un .....

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egister; that they have not maintained proper records to show inventory of the goods manufactured as envisaged in Rule 10 of the Central Excise Rules, 2002 to ascertain production, clearances on a particular date and under Rule 9(5) of the CENVAT Credit Rules 2004 for receipt, disposal, consumption and inventory of the inputs and capital goods. 1 .3 Show Cause Notice dated 20-01-2012 was issued to appellants, inter alia, alleging (i) non-payment of duty to the tune of ₹ 94,57,417/- on acco .....

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ent of duty by indulging in. >Clearance of goods under the cover of 'to whom so ever concern letters and (Delivery note'(Way Bills) by mentioning as c not for sale (testing purpose) , without raising invoice and without payment of duty. >uppression of the production and clearance of the said goods in the Daily Stock Account and ER-1 returns. > Mis-statement by initially stating that no job work was required for Wimax and Gepon projects and later claimed as short supply without p .....

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s Insurance' in their invoices. > Mis-declaring value of the goods cleared as 'NIL' even though the values are available in the related purchase orders. > Mis-declaring the installation material as inputs and wrongly availing CENVAT Credit. > Clearance of capita] goods without reversing the CENVAT Credit availed as envisaged under Rule 4(5) (a) of CENVAT Credit Rules, 2004. > Fabrication of documents. 1.4. After due process of adjudication, adjudicating authority, vide im .....

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ly despatched under private documents. ii) The goods in question are technological products, which would work only in the specified spectrum band, allotted for BSNL and nobody else can use them. iii) Most of the goods are imported under specific Import licence and we cannot procure / assemble these goods locally. iv) All persons from the company have deposed the above facts in their statements. The standard of proof in clandestine removal cases has been laid down In various judgements) which ahs .....

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they are not manufactured by the appellant. b. Demand of duty on Freight, Forwarding, Packing and Insurance Charges i) The charges are collected only towards freight and insurance and not liable to be included in the assessable value. ii) Even if packaging cost is includible, the entire amount collected under Freight and Insurance cannot be added in the assessable value. c. Demand of duty on NIL Value Invoices Reference is invited to Page 350 of Volume II and Page 488 of Volume III of the docum .....

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installation and commissioning, credit is entitled, as proper service tax is being paid on installation and commissioning charges. e. Demand of CENVAT Credit on Capital goods removed i) There is no confirmation of demand in Order portion, though there is observation in para 20 of the 010 that ₹ 3,24,428/- is payable. Demand of ₹ 3,24,428/- is not being disputed and appellant has paid with interest. ii) Penalty cannot be imposed for the entire demand as the demand to be confirmed is o .....

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procured on excise documents, however during the dispatch of the materials, some of the duty paid materials could not be dispatched and they were later dispatched with the alleged documents 'to whomsoever it may concern' only cover the dispatches. These goods were not produced in the factory, which is an admitted fact, that other items are high value items and are only imported. Being imported items the commissioner ought not to have formed an opinion that these items are surreptitiousl .....

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figures in Annexure-B in a different nomenclature as 'Freight, Forwarding, Packaging and Inland Charges'. It is submitted that it is the comprehension of BSNL that the appellants should be reimbursed packing charges also, and in any case a total charge that can claimed cannot be more than 0.5% of duty value in the final analysis and actual, therefore, it is enjoined on the revenue authorities to find out whether any amounts supposed to be packing charges were sought for collection from .....

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at 0.5% is inclusive of packing charges is itself wholly erroneous. 2.3. With regard to amount of ₹ 38,902/- sought to be levied as duty on 'Battery Backup'; they submit that non-payment cannot be alleged since in the ultimate analysis, the total duty as per the contractual values is paid. Central Excise Invoices were prepared for the GEPON Equipment which included value of 'Battery Backups' also, 'However since, batteries were though sent under Central Excise Invoices .....

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