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Central Excise - Case Laws
Showing 1 to 20 of 81836 Records
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2025 (4) TMI 815
Violation of principles of natural justice - denial of the opportunity for cross-examination of witnesses whose statements were relied upon by the Revenue to substantiate allegations against the appellants - Section 9D of the Central Excise Act, 1944 - HELD THAT:- The entire case has been build on the basis of statements of witnesses as well as the documents supplied by the source manufacturers. Further, the appellants from the very beginning has requested the adjudicating authority as well as the Commissioner (Appeals) to allow cross-examinations of all those persons whose statements have been relied upon against them, but the cross-examinations have been denied by the Revenue without any justified reasons.
This Tribunal in the case of M/s Lauls Ltd and ors vs. CCE, Delhi-IV [2023 (7) TMI 1113 - CESTAT CHANDIGARH], after following the judgment of the jurisdictional High Court of Punjab & Haryana in the case of Jindal Drugs Pvt Ltd vs. UOI [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] wherein the Hon’ble High Court has categorically held that it is mandatory to allow cross-examination of material witnesses whose statements are relied upon against the assessee.
Matter remanded back to the adjudicating authority for a fresh decision after affording the opportunity of cross-examination of the material witnesses and by following the procedure as prescribed in Section 9D of the Central Excise Act, 1944 - appeals are allowed, accordingly, by way of remand.
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2025 (4) TMI 814
Calculation of duty payable by the appellant under Rule 8 or the 4th Proviso of Rule 9 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 - abatement of duty under Rule 10 due to non-production for a continuous period of more than 15 days - effective rate of enhancement of duty.
Whether in the facts and circumstances of the case, the duty shall be payable by the appellant under Rule 8 of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 or 4th Proviso of Rule 9 of the said Rule, or not? - HELD THAT:- The issue in these appeals have been dealt by this Tribuinal in the case of Trimurti Fragrances Private Limited Vs. Commissioner of Central Excise, Delhi III [2015 (8) TMI 34 - CESTAT NEW DELHI], wherein this Tribunal has observed that 'The appellant in this case had used the four new machines installed w.e.f. 24-7-2013 for manufacture of the pouches of the new RSP - Rs. 4 per pouch, which was not being earlier manufactured by them and, therefore, the provisions of this Proviso would be squarely applicable. Therefore, in respect of these four machines, the duty at the rate applicable for the MRP of Rs. 4 would be chargeable only for 8 days from 24th July to 31st July and not for the entire month. The appellant have discharged duty liability on this basis only. Therefore, we hold that the duty demand of Rs. 1,51,35,483/- confirmed against the appellant on the basis that in respect of these 4 machines, the duty would be chargeable for the whole month, is not sustainable.'
In the case of Arora Tobacco Private Limited Vs. Commissioner of Central Excise & Service Tax, Jaipur I [2019 (1) TMI 901 - CESTAT NEW DELHI], this Tribunal relying on the decision of the Hon’ble Gujarat High Court in the case of M/s Thakkar Tobacco Products Private Limited [2015 (2) TMI 606 - CESTAT AHMEDABAD], held that the duty shall be payable in terms of 4th Proviso to Rule 9 of the Rules.
The appellant is liable to pay duty in terms of 4th Proviso to Rule 9 of the Rules.
Effective date of enhanced rate of duty - HELD THAT:- The duty is not payable on enhanced rate of duty w.e.f.17.03.2012 in the Appeal No.E/75381/2014 in terms of Proviso 5 of Rule 9 ibid as the said proviso does not contemplate the scenario where the manufacturer permanently discontinues manufacture of the goods on the said retail sale price during the month.
As the appellant has paid the duty in terms of 4th Proviso to Rule 9 of the Rules, therefore, no demand is sustainable against the appellant.
Conclusion - i) The appellant is liable to pay duty in terms of 4th Proviso to Rule 9 of the Rules. ii) The appellant is entitled to abatement under Rule 10 for the non-production period from 15.03.2012 to 31.03.2012. iii) The enhanced duty rate effective from 17.03.2012 was not applicable as production had ceased before this date.
Appeal disposed off.
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2025 (4) TMI 813
CENVAT Credit - transportation of goods by Indian Railways based on railway receipts - Rule 9 of the CENVAT Credit Rules, 2004 - HELD THAT:- It is observed that the Appellant has been availing CENVAT Credit in respect of transportation of goods by Indian Railways in accordance with Rule 9 of the CENVAT Credit Rules, 2004 on the basis of railway receipts issued by the Indian Railways. With effect from 27.08.2014, sub-rule (fa) has been inserted in Rule 9 (1) of the CENVAT Credit Rules, 2004.
This certificate is an additional document prescribed for allowing the CENVAT Credit. That does not mean that railway receipts, which contain all the necessary details required for availing the Credit, on the basis of which the Appellant had availed the credit, cannot be considered as a document for availing CENVAT Credit. It is observed that even after the introduction of sub-rule (fa) in Rule 9 (1) of the CENVAT Credit Rules, 2004, railway receipts containing all the relevant factual details continue to be a relevant document for availment of credit.
The STTG Certificate issued by the Railways has been prescribed as a document for availing credit with effect from 27.08.2014. However, railway receipts, which contain all details as prescribed under Rule 9 of the CENVAT Credit Rules, 2004, continue to be a relevant document for availment of credit. In the present case, the Appellant has availed the credit on the basis of railway receipts which contained all details as required under Rule 9 of the CENVAT Credit Rules, 2004 for availing the CENVAT Credit. Accordingly, the Appellant is eligible for availing the credit amounting to Rs.15,86,077/- - the impugned order is set aside.
Demand of interest on the amount of Rs.1,16,54,325/- - HELD THAT:- The said credit has been allowed by the ld. adjudicating authority on the basis of the STTG Certificate furnished by the Appellant. Thus, there is no irregularity in the availment of such credit. Accordingly, the demand of interest on the credit allowed is not sustainable. Consequently, the demand of interest on the amount of Rs.1,16,54,325/- allowed as credit in the adjudication order.
Conclusion - i) The CENVAT Credit amounting to Rs.15,86,077/- availed in respect of transportation of goods by Indian Railways on the basis of railway receipts is allowed. ii) No interest is liable to be paid by the Appellant in respect of the amount of credit of Rs.1,16,54,325/- which was allowed in the Order-in-Original.
Appeal disposed off.
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2025 (4) TMI 812
100% EOU - refund of unutilized CENVAT credit in relation to High Speed Diesel (HSD) and credit of Service Tax paid on Security Services - HELD THAT:- Since the issue of the refund claim of Cenvat credit of duty of Rs. 41,38,128/- paid by the appellant, while procuring HSD for their EOU is covered in favour of the appellant in their own case, the refund claim is sustainable. As regards the rejection of refund claim of Cenvat credit Rs. 2,42,192/- paid on security services, as held in catena of cases including Qualcomm India Pvt., Ltd. [2021 (11) TMI 72 - TELANGANA HIGH COURT], once it is admitted as eligible credit and if the respondent has reason to believe that, it is wrongly availed, Respondent could have proceeded against the appellant under Rule 14 Cenvat Credit Rules, 2004 for the recovery of irregular CENVAT credit and cannot adjudicate the same while processing the refund claim, hence this refund claim is also sustainable.
Appeal allowed.
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2025 (4) TMI 811
Recovery of Cenvat credit on duty-paid M.S. plates that were subjected to processes such as cleaning, drilling holes, etc., by their Jamshedpur unit - HELD THAT:- The issue is no more res-integra and covered by the judgment of this Tribunal in a series of cases including the case of Novozymes South Asia Pvt. Ltd. v. CCE, Bangalore-I [2024 (5) TMI 324 - CESTAT BANGALORE]. This Tribunal after referring to the judgment of the Hon’ble Supreme Court in the case of Sarvesh Refractories Pvt. Ltd. Vs. CC.Ex. & Customs [2007 (11) TMI 23 - SUPREME COURT] and CCE Vs. MDS Switchgear Ltd., [2008 (8) TMI 37 - SUPREME COURT] held that once the duty paid character of inputs had not been questioned, in the hands of the manufacturer when the duty was paid, the same cannot be questioned in the hands of the receiver.
In the present case, the duty paid on the M.S. Plates at the Jamshedpur unit was held to be regular and Tribunal at Kolkata allowed cenvat credit on the inputs availed by the Jamshedpur unit. The present Show-cause notice has been issued by Dharwad unit for denial of the credit as a follow-up action of the Notice issue to their Jamshedpur unit - In the present case, since the credit availed by Jamshedpur unit has been held to be regular and admissible, therefore, the credit availed by the Dharwad unit cannot be denied.
Appeal allowed.
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2025 (4) TMI 761
Challenge to impugned recovery notice - demanding repayment of an erroneously refunded amount under Section 11A and Section 11AA of the Central Excise Act, 1944 - entitlement to a special rate/value addition as per the Notifications dated 27.03.2008 and 10.06.2008 - HELD THAT:- Having perused the order dated 24.03.2021, passed in M/s. Jyothi Labs Ltd. [2021 (3) TMI 1039 - GAUHATI HIGH COURT], it is seen that issue involved in that case and in the present case appears to be similar on facts and law with only a difference that in that case the special rate application was filed before the appropriate authority and in the present case, the petitioner filed the special rate application before the Regional Officer, although addressed to the Principal Commissioner, Central Goods & Services Tax, Guwahati.
As agreed to by the learned counsel for the parties, the petitioner is directed to file special rate/value addition application claiming special rate/value addition before the Principal Commissioner, Central Goods & Services Tax, Guwahati, within a period of fifteen (15) days from today. On receipt of such application by the petitioner as directed herein above, the Principal Commissioner, Central Goods & Services Tax, Guwahati to consider the application. After arriving at the special rate, if any as per the order to be passed by the Principal Commissioner, Central Goods & Services Tax, Guwahati, further process against the petitioner as per law, may be initiated.
Conclusion - The petitioner is entitled to file a special rate/value addition application, which must be considered by the Principal Commissioner, Central Goods & Services Tax, Guwahati.
Petition disposed off.
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2025 (4) TMI 760
Rejection of appeal on the ground of being time barred - HELD THAT:- The appellant has produced before me a copy of appeal filed before the Assistant Commissioner, Mohali on 02.05.2018 in the form of “Form No. E.A. 1” which is a form of appeal before the Commissioner (Appeals) under Section 35. The appellant has also produced the proof of Challan dated 01.05.2018 depositing mandatory pre-deposit of 7.5%.
It is also found that as per the appellant, he has also sent the copy of the appeal to the Commissioner (Appeals), but the same was not proved by furnishing the proof of the receipt in the office of Commissioner (Appeals). It is also noted that when the copy of the appeal was filed in the office of Assistant Commissioner, Mohali, it was the duty of Assistant Commissioner to forward the same to the office of Commissioner (Appeals), but the same was not done and the learned Commissioner (Appeals) rejected the appeal of the appellant being time barred holding that the appellant filed the appeal on 29.07.2021 before him.
Division Bench of the Tribunal in the case of Premier Car Sales Ltd [2018 (12) TMI 2014 - CESTAT ALLAHABAD] has remanded the matter back to the Commissioner (Appeals) in identical facts wherein also the appellant filed appeal before the Assistant Commissioner. Similarly, by following the ratio of the said decision, the present matter also remanded back to the learned Commissioner (Appeals) to find out whether the appellant has filed copy of the appeal alongwith proof of pre-deposit before the Assistant Commissioner, Mohali and if the same is found to be valid, then the period, during which the appeal was kept pending with the Assistant Commissioner, should be excluded from the computation of the period prescribed for filing the appeal before the Commissioner (Appeals).
Conclusion - Matter remanded back to the Commissioner (Appeals) with a direction to decide the issue of limitation afresh after considering the material placed on record by the appellant and after affording an opportunity of hearing to the appellant and thereafter, pass a reasoned order in accordance with law within the period of two months from the date of receipt of the certified copy of this order. It is further directed that if the appeal is found in time then the same may also decided on merits.
Appeal allowed by way of remand.
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2025 (4) TMI 759
CENVAT credit - process amounting to manufacture or not - credit taken under the invoices does not meet the requirement of Rule 9 of the Cenvat Credit Rules, 2004 - HELD THAT:- As per the findings at Para 6.5 of the Order-in-Appeal there was no reason for the Commissioner(Appeals) to dismiss the Appeal filed by the Appellant. However, at Para 6.6 of the impugned Order-in-Appeal he has gone beyond the scope of the Show Cause Notice and dismissed the Appeal on the sole ground that the Appellant has not produced any evidence towards payment for the purchase of the goods, which was not the issue in the Show Cause Notice. On this ground itself the impugned order requires to be set aside.
The Tribunal has consistently held that the duty paid at the end of the vendor cannot be questioned at the end of the user of the goods - In the case of AGP Food Products [2014 (2) TMI 1096 - CESTAT NEW DELHI], the Tribunal has held that 'as the supplier of input is not party to the present proceeding and the assessment cannot be reopened at the recipient end. The impugned order is not sustainable and is set aside.'
Conclusion - i) The scope of SCN is surpassed. ii) The duty paid at the end of the vendor cannot be questioned at the end of the user of the goods.
Appeal allowed.
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2025 (4) TMI 758
Availment of cenvat credit of additional duty of customs (CVD) paid by debiting the Duty Entitlement Pass Book (DEPB) scrips during the period 2010-11 to 2011-12 - invocation of extended period of limitation - HELD THAT:- Learned Commissioner in the impugned order has reasoned that the adjustment of additional customs duty (CVD) paid by way of debiting the DEPB scrips cannot be considered as additional customs duty (CVD) paid and further held that when there is no payment of additional customs duty, the availment of credit on said CVD is irregular.
There are no merit in the said reasoning of the learned Commissioner as it has been held by the Hon’ble Madras High Court in the case of Tanfact Industries Ltd. [2009 (4) TMI 92 - MADRAS HIGH COURT] later affirmed by the Hon’ble Supreme Court in [2009 (10) TMI 892 - SC ORDER] that the goods cleared under DEPB scheme cannot be treated as exempted goods but it be treated as duty paid goods. Further, Board in its Circular No.18/2006-Cus dated 05.06.2006 clarified that 4% special CVD paid by debiting DEPB scrips is allowed to be taken as cenvat credit. Also, the N/N. 97/2009-Cus dated 11.09.2009 specifically mentions that the importers are entitled to avail the drawback or cenvat credit of additional duty leviable under Section 3 of the Customs Tariff Act against the amount debited in the DEPB scrips.
The Tribunal in the case of Styrenix Performance Materials Limited Vs. CCE&ST, Vadodara-II [2023 (5) TMI 384 - CESTAT AHMEDABAD] after examining the issue at length held that cenvat credit cannot be denied when the additional duty of customs (CVD) was debited by utilising the DEPB scrip.
Conclusion - i) The goods cleared under the DEPB scheme are duty-paid goods, and cenvat credit is admissible for additional duty of customs paid via DEPB scrips. ii) The invocation of the extended period of limitation requires clear evidence of suppression of facts, which is absent in this case.
Appeal of Revenue dismissed.
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2025 (4) TMI 757
Availment of CENVAT credit - capital goods or not - steel items used for the construction of technological and supporting structures in a sugar manufacturing plant - invocation of extended period of limitation - HELD THAT:- The issue was considered by this Bench in the matter of M/s. Sunvik Steels Ltd Vs. CCE [2013 (11) TMI 1081 - CESTAT BANGALORE] wherein it is held that 'for the period prior to 07.07.2009, the appellants are eligible to avail CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., and accordingly, demand confirmed is not sustainable; for the period 07.07.2009 to April 2011, in principle CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., are not admissible. Consequently, the impugned order is modified, and the appeal is remanded to the original adjudicating authority to recalculate the demand for the period after 07.07.2009, if any, payable.'
Similar view was upheld by the Tribunal in the matter of M/s BMM Ispat Limited Vs. Commr. C.Ex., Belgaum
[2024 (4) TMI 671 - CESTAT BANGALORE] and in the matter of M/s Sri Renuka Sugars [2024 (6) TMI 294 - CESTAT BANGALORE] - Since the issue is squarely covered by the above decisions, it is found that the material used by the Appellant for support of structures and platform for machineries and equipment used in the factory are eligible for CENVAT credit.
Invocation of Extended period of limitation - HELD THAT:- The Show cause notice (SCN) was issued on 03.01.2013 and in the absence of any allegation regarding suppression of facts for evasion of duty, invocation of extended period of limitation is unsustainable.
Conclusion - i) The steel items used for constructing and supporting manufacturing equipment qualify as capital goods for CENVAT credit. ii) The invocation of extended period of limitation is unsustainable.
Appeal allowed.
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2025 (4) TMI 756
CENVAT Credit - trading activity - Demand of reversal of proportionate credit relating to exempted service - credit availed on 'Security Services', which is also a common input service used by them in relation to manufacture of dutiable goods and trading services - Extended period of limitation - HELD THAT:- As per the impugned order, adjudication authority rejected the same in a casual manner by quoting that; “however in the absence of evidence to prove that the parameters laid down in formula has been correctly followed, it is not inclined to take cognizance of the claim that the procedure under Rule 6(3A) has been followed. Therefore, the assesses are liable to pay the amount of 5% /6% as the case may be, of the value of exempted service in terms of Rule 6(3) (i) of the Cenvat Credit Rules, 2004 for the period April 2011 to December 2014.” - it is found that without specifying the mistake or omission on the part of the appellant, while assessing the proportionate Cenvat credit under Rule 6(3A), the same cannot be rejected.
Invoking the extended period of limitation - HELD THAT:- There are strong force in the submission made by the appellant. As regarding reversal of proportionate cenvat credit on common security services, it was required to be made only from April 2011, when Rule 6(5) of Cenvat Credit Rules was omitted vide Notification No. 3/2011-CE (NT) dated 01.03.2011 w.e.f. 01.04.2011. Fact being so, since the appellant had fully reversed the cenvat credit availed against common input services under 'Courier' services and 'Telephone' services and proportionately as per Rule 6(3A) for the 'Security Service', the impugned order is prima facie unsustainable and liable to be set aside.
Conclusion - i) Without specifying the mistake or omission on the part of the appellant, while assessing the proportionate Cenvat credit under Rule 6(3A), the same cannot be rejected. ii) The extended period of limitation cannot be invoked without just cause, particularly when the appellant has demonstrated compliance with credit reversal requirements.
Appeal allowed.
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2025 (4) TMI 755
Levy of excise duty - manufacture or not - works related to 'Installation of structural Glazing', 'Aluminium Doors', 'Aluminium Partitions' and 'office interiors' - HELD THAT:- It is an admitted fact that upon fabrication the impugned items become a part of civil construction. In such a situation, it is not sustainable to hold that there is a marketable new product emerging in between. Similarly, if the goods installed at site are capable of being sold or shifted as such, after removal from the base, then the goods would be considered to be movable and excisable. In the present appeal, the department has no case that the goods installed/structure erected can be shifted or dismantled to be movable property and, therefore, are excisable to duty. Further, they cannot be shifted or disassembled without causing damage to the components/ parts.
Even as per the counsel it is has been rightly pointed out that if the curtain wall/AWs, cladding are pulled down or dismantled, it would result into scrap only. Considering the above facts and circumstances the activity of 'Installation of Structural Glazing work', 'Aluminium Doors', 'Aluminium Partitions' and 'Office Interiors' cannot be considered as manufacturing to confirm demand of duty along with interest and impose penalties.
Conclusion - The appellant's activities do not constitute "manufacture" under Section 2(f) of the Central Excise Act, as they did not result in a new, distinct, and marketable product. The installations were deemed part of immovable property.
The impugned order is not sustainable, hence liable to be set aside - Appeal allowed.
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2025 (4) TMI 754
Wrongful availment of Cenvat credit - inputs used for manufacture of 'Aluminium Bus Bars' and 'Anode Stem' within the factory, which in turn, was captively consumed as capital goods for supply of heavy electric current and for electrolysis respectively in the pot line for the manufacture of dutiable final product i.e. Aluminium metal - invocation of extended period of limitation - HELD THAT:- The issue as to whether cenvat can be availed on the intermediate product when the same is exempted, is no more re integra. Dealing with such CENVAT Credit under the provisions of erstwhile Rule 57 of the Central Excise Rues, 1944 the Delhi Tribunal in the case of HINDALCO INDUSTRIES LIMITED VERSUS COMMR. OF C. EX., ALLAHABAD [2002 (5) TMI 180 - CEGAT, NEW DELHI] held that 'the well settled position about what is intermediate product and having regard to the fact that the appellants in their Form-I form (C/List) shows that bus-bar is captively consumed. We have no doubt in our mind that bus-bar is an intermediate product and is eligible to the benefit of credit of input itself in terms of Rule 57D(2) of C. Ex. Rules, 1944.' - the impugned order is set aside on merits and the Appeal is allowed.
Extended period of limitation - HELD THAT:- There are considerable force in the appellant’s argument that the Show Cause Notice issued on 1.10.2004 for the CENVAT Credit taken during April, 2000 to February, 2001 is time barred. The appellant is an assessee since 1997 and has been taking the credit and filing the Returns. The case laws in respect of the CENVAT Credit eligibility on exempted intermediate goods are in favour of the party. Therefore, the Department has not made any case of suppression on the part of the appellant to fasten the extended period demand liability. Therefore, the demand is set aside even on account of time bar.
Conclusion - i) The Appellant is entitled to CENVAT credit on the inputs used for manufacturing exempted intermediate products that were further used in dutiable final products. ii) The demand also set aside on the grounds of time bar, finding the extended period of limitation inapplicable.
Appeal allowed.
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2025 (4) TMI 753
Method of valuation - valuation method used by the Appellant for inter-unit transfer of goods - Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - extended period of limitation - HELD THAT:- The issue is no more res integra. In the case of Hindalco Industries Ltd. v. Commissioner of Central Excise, Bhubaneswar-II, [2023 (5) TMI 720 - CESTAT KOLKATA], this Bench has held 'The duty paid by the Appellant would be available as credit to their sister unit. This the entire exercise is revenue neutral.'
On an identical issue in the case of M/s H. V. Transmission Ltd. v. CCE, Jamshedpur [2023 (12) TMI 118 - CESTAT KOLKATA], this Bench has held that 'We find that the issue is squarely covered by the cited decisions of this Tribunal, wherein it has been held that when the duty paid by the parent unit is eligible as Cenvat Credit to the receiving unit, the entire proceeding becomes revenue neutral.'
Conclusion - Tthe valuation method used by the Appellant is consistent with legal precedents and that the principle of revenue neutrality is applied, rendering the demand for differential duty unsustainable.
Appeal allowed.
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2025 (4) TMI 752
Recovery of excess refund of accumulated Cenvat - applicability of retrospective amendment of N/N. 32/99-CE by N/N. 61/02-CE - HELD THAT:- The appellant utilized the accumulated Cenvat as on 22.12.2002 by 31.01.2003, which has remitted in lesser refund being received by them during the period December 2002 to February 2003.
This Bench in the case of Ozone Pharmaceuticals vs. Commissioner of Central Excise & S.T., Guwahati [2023 (9) TMI 1371 - CESTAT KOLKATA], has dealt with identical issue and has held 'The entire accumulated CENVAT credit as on 22.12.2002 was utilized by the Appellants during this period, leading to the scenario of Nil refund during the period February 2003 to May 2003.'
Conclsuion - The utilization of CENVAT credit post-amendment fulfills the conditions for refund eligibility, negating the need for recovery.
The Appeal is allowed on merits.
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2025 (4) TMI 689
Activity amounting to manufacture - activity of packing and labeling tyre 'O' rings by the appellants - HELD THAT:- The product ‘O’ rings has been specifically mentioned in Chapter Tariff Item 4016 93 20 as ‘Rubber rings (O-ring)’. The ‘O’ rings are also classified under Chapter 87, in the circumstances, when those were used as “parts, components and assemblies of automobiles”. The ‘O’ rings dealt with by the appellants in this case are not exclusively usable only in automobile industries, as the same can also be used for other purposes. The said ‘O’ rings are not confined as parts, components and assemblies of automobiles industry only. Thus, it is agreed with the order of the original authority, who had classified the product under Chapter 4016. Further, mere packing of the ‘O’ rings and putting of label thereon shall not amount to manufacture, inasmuch as no distinct and identifiable product emerges as a result of process of such packing or putting the logo thereon.
Conclusion - The appellants are not liable to pay central excise duty in respect of the tyre ‘O’ rings removed from the factory.
The impugned order is set aside - appeal allowed.
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2025 (4) TMI 688
Activity amounting to manufacture - exemption under Notification No. 88/1988-C.E., dated 01.03.1988 - products repacked by the appellants qualify as 'Synthetic Detergents' or not - activity of repacking bulk goods into retail packages, with the addition of materials such as fragrances and colors - HELD THAT:- On perusal of the certificate dated 31.05.2012 furnished by the Chemical Examiner Gr.I, it is found that the said laboratory has confirmed the composition of the product as Organic Surface Active Agents, Fragrances and Additives. Since, those materials were used by the appellants in their factory while undertaking the activities of repacking of the purchased goods from bulk to retail packs, it is opined that they are confirming to the HSN explanatory notes, in order to fall within the scope and ambit of Chapter sub-heading 3402 90 as claimed by them.
Conclusion - Since, the products in dispute are confirming to ‘Synthetic Detergents’ as per the HSN explanatory notes, the benefit claimed by the appellants under Notification dated 01.03.1988 should be available to them for non-payment of Central Excise duty in respect of the clearances made by them to the Khadi and Village Industries.
The impugned orders, to the extent the adjudged demands are confirmed therein against the appellants are not sustainable and as such, are liable to be set aside - appeal allowed.
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2025 (4) TMI 631
Reversal of CENVAT Credit - requirement to pay 10%/5% of the value of the chilli seeds and chilli de-oiled cake/marigold during the relevant period from June 2007 to September 2011 - product chilli seeds and chilli de-oiled cake which emerged during the process of manufacture of the said Oleoresin were cleared by the appellant without payment of duty - failure to comply with provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - availment of inadmissible credit on Oleoresin paprika received in finished condition which are later exported - HELD THAT:- Undisputed facts are that the chilli seeds are emerged from the raw material i.e. raw chilli before being subjected to any process and the appellants do not use any input till the chilli seeds separated from the raw chilli, a claim not rebutted by the Department; thus they have not availed cenvat credit on any of the inputs in the manufacture of chilli seeds. Also, it is not in dispute that they have reversed Rs.98,640/- along with interest of Rs.38,977/- proportionate cenvat credit attributable to input services used in the generation of chilli seeds cleared without payment of duty. Also, it is not in dispute that the de-oiled cake is a by-product / waste and cleared without payment of duty. The learned Commissioner did not accept the reversal of credit solely on the ground that it was made on 11.05.2012 i.e. after period stipulated in the Finance Act, 2010. There are no merit in the said observation of the learned Commissioner inasmuch as the show-cause notice was issued to the appellant on 10.05.2012 and they have immediately reversed proportionate credit on 11.05.2012 attributable to the input services used in the manufacture of exempted product viz. chilli seeds. Further, it has been held in a number of cases that reversal of cenvat credit attributable to exempted goods would suffice compliance of Rule 6(3) of the CCR.
Reversal of cenvat credit on the de-oiled cake which emerged during the course of manufacture of Oleoresin - HELD THAT:- It is waste product; hence cenvat credit attributable to such waste are not required to be reversed in view of the principle of law laid down by the Tribunal and High Court in the case of Rallis India Ltd. Vs UOI [2008 (12) TMI 46 - HIGH COURT BOMBAY] and M.K. Agrotech (P) Ltd. [2006 (12) TMI 37 - CESTAT, BANGALORE].
Reversal of credit of Rs.3,15,028/- which has been received by the appellant in finished condition from M/s. Kancor Ingredients Ltd., Ernakulam and later exported under Rule 16 of the CCR, 2002 - HELD THAT:- The issue of reversal of credit of Rs.3,15,028/- which has been received by the appellant in finished condition from M/s. Kancor Ingredients Ltd., Ernakulam and later exported under Rule 16 of the CCR, 2002 also cannot be denied in view of the judgment of this Tribunal in the case of CCE, Ahmedabad Vs. Tapsheel Enterprises [2007 (5) TMI 97 - CESTAT, AHMEDABAD].
Conclusion - i) Reversal of proportionate cenvat credit attributable to exempted goods suffices compliance with Rule 6(3) of the CCR, 2004. ii) By-products or waste do not necessitate credit reversal under Rule 6(3). iii) Goods exported in finished condition do not require cenvat credit reversal under Rule 16 of the CCR, 2002.
The impugned order is set aside and the appeal is allowed.
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2025 (4) TMI 567
Violation of principles of natural justice - Appellant was not given an opportunity of personal hearing in the matter to record his submission as to question of jurisdiction - refund claim - HELD THAT:- The appeal was rejected on the ground that appellant was failed to file an appeal against earlier communication dated 22.09.2021 within the time stipulated under the Law. Appellant have given proper and satisfactory reason why he had not filed the appeal against the communication dated 22.09.2021 as stated in Memorandum of Appeal that “on receipt of communication from Central Tax, Gachibowli Division, Hyderabad, the appellant approached Jurisdictional Customs Authorities in relation to his refund claim, however, he was denied of filing any claim saying that the CVD and SAD duties are not customs components but clearly part of Cenvat duty”. It is also important that no any opportunity of hearing has been given by the Adjudicating Authority. It is a Statutory procedure that no application for a refund should be rejected without giving an opportunity to the appellant of being heard.
Hon’ble Supreme Court in M/s Nagarjuna Construction Company Vs Government of Andhra Pradesh and Others [2008 (10) TMI 686 - SUPREME COURT], in which Hon’ble Supreme Court held that natural justice is another name for common sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense liberal way. Justice is based substantially on natural ideals and human values.
Conclusion - The Adjudicating Authority passed the order without giving proper opportunity of hearing which is against the natural justice and procedure established by law. Learned Commissioner (Appeals) also not considered these facts therefore, appeal is liable to be allowed by way of remand with direction to decide refund claim on merit after giving proper opportunity to appellant.
Appeal allowed by way of remand.
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2025 (4) TMI 566
CENVAT Credit - input services - renting of motor vehicle - Repair and maintenance services relating to motor vehicle - life/medical or health insurance services extended to staff and personnel of CISF security - services of catering, health, travel - services of miscellaneous nature viz., removal of honey comb, removal of debris, disposal of canteen waste/medical waste, maintenance of garden & grass cutting etc., which are not related to manufacturing activities - levy of interet and penalty.
Medical/health insurance policy taken for their employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants - the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of ‘input service’ under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case.
The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - Reliance can be placed in the case of Honda Motorcycle & Scooter (I) Pvt. Ltd. Vs. Commissioner of C. Ex. Delhi-III [2016 (8) TMI 308 - CESTAT CHANDIGARH] - Service Tax paid on medical/health insurance services for an amount of Rs.35,42,452/- are eligible to be availed of Cenvat credit as per statutory provisions.
Security services provided by CISF - HELD THAT:- CISF has been tasked with providing security to all petroleum & oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential ‘input service’ required to be used in manufacture of petroleum products. Further, ‘security’ services have also been specifically provided in the inclusive part of the definition of ‘input service’ under Rule 2(l) ibid. Therefore, Service Tax paid on medical/health insurance services for CISF Security for an amount of Rs.10,06,493/- are eligible to be availed of as CENVAT credit.
Service tax paid on maintenance of gardens - HELD THAT:- In view of the mandatory nature of services that is required to be engaged by industry in carrying out their manufacturing activity, we find that the services engaged by the appellants in respect of maintenance of gardens, dry grass cutting in order to avoid fire hazard is found to be eligible input services. Therefore, Service Tax paid on such services for an amount of Rs.4,88,735/- are eligible to be availed of as CENVAT credit.
Service tax paid on the services of search of documents which are stored in safe custody for eight years - HELD THAT:- The services of underwater diving services used in the appellants refinery is also found to be an essential services inasmuch as these services are used for removing the debris from the sea, near the jetty pumps maintained for receipt of crude petroleum or other petroleum products, which are used in processing at their refinery plant. As these services are in the nature of routine repair and maintenance of operational equipment involved in the manufacturing process, these are covered as eligible input under Rule 2(l) ibid. Therefore, Service Tax paid on the above two services for an amount of Rs.2,842/- as discussed above are eligible to be availed of as CENVAT credit.
Outdoor catering services - HELD THAT:- The service is specifically excluded under clause (C) of Rule 2(l) ibid, it cannot be included in the eligible input services.
Maintenance and repair of asphalt road, removal of crushed stones etc. - bus service for travel of CISF security from Vashi to Bandra Station, in the city which is outside the refinery plant - maintenance of honeycomb - supply and erection of shamiana which is used for resting of contract workers during shutdown maintenance period - video imaging work, programme services in respect of various programs conducted for vendors and for discussion point with employees - HELD THAT:- There are no proper justification have been provided by the appellants for treating these services as input services, having direct or indirect connection with the manufacturing operations of the appellants. Hence, we do not find any reason to differ with the findings of the learned adjudicating authority, in rejecting the CENVAT credit taken as ineligible input service to the extent of an amount of Rs.9,03,065/- on the above services.
Service tax paid on insurance premium in respect of health/medical insurance of family members/dependents of the employees - HELD THAT:- The appellants have already reversed the ineligible CENVAT credit prior to the issue of SCN, on their own.
Levy of interest and penalty - HELD THAT:- There do not exist any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. In view of detailed discussions on individual input services, it is opined that for total amount of Rs. 50,40,522/- such services are found to be eligible for availing the service tax paid as CENVAT credit. Therefore, to this extent the impugned order is not legally sustainable.
Conclusion - The appellants are entitled to CENVAT credit for an amount of Rs. 50,40,522/- for services found to be eligible under the statutory provisions. The denial of CENVAT credit for services amounting to Rs.9,03,065/- partially upheld, which did not qualify as input services.
Appeal disposed off.
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