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Central Excise - Case Laws
Showing 1 to 20 of 81780 Records
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2025 (3) TMI 1398
Levy of penalty for shortages of raw materials and finished goods - appellant paid the duty before the issuance of the SCN - HELD THAT:- Appellant were unable to fully explain the shortage of raw materials and finished goods at the time of stock verification and, in order to put an end to the litigation, they paid the duty and hence, penalty should not have been imposed in respect of these demands. The submission of the appellant agreed that since the appellant had paid the central excise duty along with interest before issuance of the SCN, as per Section 11A(2B) of the Act, there was no necessity to issue the Show Cause Notice for these demands. as the duty involved has already been paid. Accordingly, the SCN for these issues need not have been issued. In these facts and circumstances, the penalties imposed on the appellant on these issues are not warranted and hence, the penalties imposed on the appellant on these demands are set aside.
Regarding the liability to central excise duty amounting to Rs.1,21,936/- on transport insurance, the appellant has collected transport insurance charges @ 1% on the value from the customers and deducted the same from the assessable value. However, the actual premium paid by them was found to be less than the 1% collected. In this regard, it is observed that the profit earned by the appellant on the transport insurance is not liable to be included in the assessable value, as has been held by the Tribunal in the case of TCP Ltd. v. Commissioner of C.Ex., Madurai [2007 (10) TMI 512 - CESTAT, CHENNAI].
Conclusion - i) The demands of Rs.40,445/- and Rs.18,031/- (inclusive of cesses), along with interest, confirmed on account of shortage of inputs and shortage of finished goods respectively, already paid by the appellant, are upheld. No penalty is imposable in respect of these demands. ii) The demand of Rs.1,21,936/- confirmed on account of inclusion of transit insurance in the assessable value is set aside. No penalty is imposable on the appellant in respect of this issue.
Appeal disposed off.
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2025 (3) TMI 1397
Refund upon finalisation of provisional assessments - requirement to prove conclusively that the incidence of duty burden has not been passed on to the ultimate buyer - compliance to the principle of the doctrine of unjust enrichment - HELD THAT:- It is evident from the records that the Original Authority in the denova Order-in-Original No. 08/2016 dated 05.08.2016 has arrived at the decision that the appellant has borne the excise duty burden and not passed on to the dealers after scrutinizing the credit notes, Chartered Accountant’s certificate, extract of ledger for discounts, etc., and ordered for sanction of the refunds. Whereas in the impugned orders dated 14.09.2017, the Commissioner of GST and Central Excise (Appeals), Coimbatore has held that refund claims were hit by the bar of unjust enrichment as the appellant has not conclusively established that the burden of excise duty in relation to which such refunds are claimed has not been passed on by him to any other person (ultimate consumer) and the verification process done by the Original Adjudicating Authority was only confined to the first buyers i.e., Dealers. Whether the incidence of duty was passed on to any other downstream buyer was not verified by the Original Adjudicating Authority and also from the records, it was ascertained that the assessee has not submitted any such evidence.
An in-depth examination of the Hon’ble Supreme Court’s judgment in the case of Addison & Co. Ltd. [1997 (3) TMI 98 - SUPREME COURT] makes it clear that there is a presumption that the full incidence of duty burden has been passed on to the buyer of the goods. The refund of any duty can be made only to the person who bears the incidence of duty and it is necessary to conduct verification as to ascertain who actually have borne the burden of duty. It has been categorically laid down that refund can be granted only to the person who has paid the duty and borne the duty and not to anyone else. If the ultimate customer cannot be identified the amount should be credited to the Consumer Welfare Fund established under Section 12 C of the Central Excise Act, 1944 to be utilised for the benefit of consumers in general.
The appellant would be eligible for refunds sanctioned only when it is proved that incidence of duty has not only been passed on to the dealers but also by the dealers to the ultimate customers. Herein, the appellant has proved that the excise duty burden has been borne by him and not passed on to the dealers. But whether there is any evidence as to their dealers having not passed on the duty incidence to the ultimate customers of Motor Cycles is not forth coming as a second stage verification has not been carried out. As such, the appellant is required to prove conclusively that the incidence of duty burden has not been passed on to the ultimate buyers so as to be eligible for the refund claims arising on account of finalisation of provisional assessment after allowing abatements.
The sanction of the refund claims by the Original Adjudicating Authority without conducting verification as to whether the dealers of the Motor Cycles have not passed on the incidence of duty to the ultimate customer is not legal and proper. Refund of excess excise duty paid at the time of provisional assessments, could be legally sanctionable only to those persons which include ultimate customers who must have borne the burden of excise duty paid.
Conclusion - The appellant failed to conclusively prove that the duty burden was not passed on to the ultimate consumers, thus affecting their eligibility for refunds.
The appeals are allowed by way of remand.
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2025 (3) TMI 1343
Refund of Education Cess & Secondary High Education Cess - rejection of refund of Education Cess & Secondary High Education Cess on the basis of the Hon’ble Apex Court Judgments in the case of Unicorn Industries Vs. UOI [2019 (12) TMI 286 - SUPREME COURT] - HELD THAT:- This issue has already been settled by this Bench in the appellant’s own case involving identical issue M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] wherein it has been held that the orders of the Commissioner (Appeals) is bad in law and the Tribunal has also directed the adjudicating authority to implement the orders passed by the Tribunal in the earlier round of litigation.
The Tribunal in the appellant’s own case M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] have allowed the claim of the appellant by relying upon the judgments of the Hon’ble Supreme Court in the case of SRD Nutrients Pvt. Ltd [2017 (11) TMI 655 - SUPREME COURT].
Further, it is found that the appellant was also a party before the Hon’ble Apex Court in the case of SRD Nutrients Pvt. Ltd. The review filed by the Department in SRD Nutrients Pvt Ltd. was also dismissed by the Hon’ble Supreme Court. Further, it is found that before the Commissioner (Appeals) appellant has challenged only part of the adjudication order withholding/rejecting part of the refund claim whereas the Commissioner (Appeals) not only rejected the pending refund claim itself rather ordered for recovery of amount of the already sanctioned claims without any authority of law.
Conclusion - The appellants are entitled to a refund of E.Cess and SHE Cess.
Appeal allowed.
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2025 (3) TMI 1342
Exemption from service tax - providing services of construction of stadium at Sector-21, Noida against contract awarded by New Okhla Industrial Development Authority - demand made on the basis of receipts shown in 26AS statement - demand of interest and penalty.
Demand of service tax made on the basis of receipts shown in 26AS statement - period 2015-16 & 2016-17 - HELD THAT:- Construction of original work which is for the purpose of non-commercial activities for government or local or governmental authority was exempt from service tax. Governmental authority was defined as an authority established by an Act of the Parliament or a State legislature and was hundred percent in the control of Government. It was also provided that such body must perform works as mentioned in Article 243W of the Constitution.
Noida Authority is set up by the U.P. Government in exercise of powers conferred under Section 3 of the Uttar Pradesh Industrial Area Development Act, 1976 passed by U. P. Legislative Assembly. As per Section 3(3) of the UPIAD Act, the management including chief executive will be appointed by the U.P. Government. It shows that hundred percent control of the body established under the UPIAD Act will be by the U.P. Government. As per Section 6 (e) of UPIAD Act, the function of the Authority set up under the said Act includes to provide amenities and municipal services. The above facts confirm that Noida Authority falls within ambit of governmental Authority as defined under clause 2(s) of Notification No.25/12-ST dated 20.06.2012.
Whether a sports stadium is for non-commercial activities or not? - HELD THAT:- A stadium is a place or venue for (mostly) outdoor sports, concerts, or other events and consists of a field or stage completely surrounded by a tiered structure designed to allow spectators to stand or sit and view the event. It is also used for morning walks. Basically, construction of sports stadium is for boosting sports. Its purpose is not for any commercial activities. The above finding also finds support from the decision of the Tribunal in the case of B.G. Shirke Construction Technology Pvt. Ltd. [2013 (2) TMI 584 - CESTAT MUMBAI] held 'The Sports Stadia is used for public purpose. Merely because some amount is charged for using the facility, it cannot become a commercial or industrial construction. Even in a Children Park, entry fee is levied for maintenance of the Park. Merely because some amount is charged for using the Park, it cannot be said that it is a commercial or industrial construction. Adopting the same logic, the Sports Stadia in the present case is also a non-commercial construction for use by the public. Therefore, we are prima facie of the view that the Sports Stadium constructed for conducting Commonwealth Games, is a non-commercial construction.' - thus, sport stadium is predominantly used for purposes other than commercial.
It is explicit from the findings that all terms and conditions specified under Notification No.25/12-ST dated 20.06.2012 as amended by N/N. 09/16-ST dated 01.03.2016 were fulfilled in the case at hand. Hence, services rendered by the Appellant were exempted from service Tax.
Demand of interest and penalty - HELD THAT:- When the demand of tax itself is not sustainable, the demand of interest and imposition of penalty does not survive.
Conclusion - The services provided to a governmental authority for non-commercial purposes are exempt from service tax, even if some fees are charged for maintenance or use.
Appeal allowed.
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2025 (3) TMI 1341
Levy of penalty on Managing Director u/r 26 of Central Excise Rule, 2002 for the omission on the part of the company in mis-declaring the goods manufactured by them - HELD THAT:- It is found that other than being the Managing Director of M/s. Ruchi Soya Industries Ltd., there is no direct involvement of the appellant and there is no allegation regarding his personal involvement. The penalty was imposed only on the ground that the Managing Director is ultimately responsible for all the affairs of the company and hence, he is also liable to be penalized.
There are strong force in the contention raised by the appellant that there is no finding showing involvement of the appellant in mis-declaring the goods. Moreover, the issue is on classification of goods and as submitted by appellant during the investigation, the aspect of payment of central excise duty, classification etc., cannot be held as the personal responsibility and being the Managing Director, it cannot be alleged that he is personally involved without substantial evidence regarding his active involvement in the alleged suppression of facts.
Conclusion - The imposition of a penalty on the appellant under Rule 26 of the Central Excise Rules, 2002, was unsustainable due to the lack of evidence of personal involvement.
Appeal allowed.
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2025 (3) TMI 1340
Reversal of cenvat credit on inputs and capital goods such as explosives, detonators, lubricants, components, items, etc. provided on non-chargeable basis to contractors for mine development work/or production in terms of Rule 3(5) of Cenvat Credit Rules, 2004 - extended period of limitation - interest - penalty - HELD THAT:- Consistent views have been taken time and again not only by the Tribunal and the High Courts but also by the Apex Court that the judicial discipline and proprietary demands that the Adjudicating Authority or the Appellate Authority should follow the binding decisions of the Tribunal.
The Apex Court in Union of India Vs. Kamlakshi Finance Corporation Ltd. [1991 (9) TMI 72 - SUPREME COURT] has categorically held that the order of the Tribunal is binding upon the Assistant Collector and the Appellate Collectors, who function under the jurisdiction of the Tribunal and they should be followed unreservedly by the subordinate authorities. It was further held that mere fact that the order of the Appellate Authority is not acceptable to the Department in itself is an objectionable phrase and is no ground for not following it unless the operation of the said order has been suspended by a competent court. The logic in holding so has been stated that if this rule is not followed, there will be undue harassment to the assesses and chaos in administration of the tax laws. The present case clearly reveals this, though not only one but four orders of the Tribunal and specially in the case of the appellant are on record on the same issue but the Authorities below have chosen not to follow.
There is no sale and no removal of inputs and capital goods when the assessee supplied the same to the contractor, which was used for mine development activity and, therefore, the provisions of Rule 3(5) are not applicable. In the circumstances, the appellant was not required to reverse the credit availed in respect of the impugned items.
Extended period of limitation - interest - penalty - HELD THAT:- Merely providing the inputs and capital goods to the contractor for use within the captive mines for mine development works of the appellant does not amount to removal and thereby, do not attract the provisions of Rule 3(5) of CCR. Since the issue has been decided on merits in favour of the appellant, the question of extended period of limitation, levy of interest and penalty does not survive.
Conclusion - The appellant is not liable to reverse the CENVAT credit on the inputs and capital goods provided to contractors for mine development activities.
Appeal allowed.
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2025 (3) TMI 1244
Maintainability of petition when efficacious statutory alternative remedy of appeal under section 35F of the Central Excise Act, 1944 (the CEA Act, 1944) is available to the petitioner - HELD THAT:- The Apex court in the case of Hindustan Coca Cola Beverage Private Limited Vs. Union of India and others, [2014 (9) TMI 585 - SUPREME COURT] has held that when a statute provides for statutory appeal, the said remedy is to be availed by the litigating parties.
In the case of Hameed Kunju vs. Nazim [2017 (7) TMI 1414 - SUPREME COURT], the Apex Court has held that any petition under Article 227 of the Constitution of India should be dismissed in limine where there is statutory provision of appeal.
The Apex court in the case of Ansal Housing and Construction Ltd. Vs. State of Uttar Pradesh and others [2016 (3) TMI 1435 - SUPREME COURT], has held that when statutory appeal is provided then the said remedy has to be availed.
In the case of Godrej Sara Lee Ltd. [2023 (2) TMI 64 - SUPREME COURT], the Apex Court has held that High Court can only interfere in the matters when disputed question of law are involved and not in the question of facts. In the present case, no disputed question of law is involved. In the present case, it is evident that sufficient opportunity of hearing through virtual mode was provided to the petitioner on 28.11.2024, 13.12.2024, 20.12.2024 & 27.12.2024 but neither the petitioner nor his authorised representative attended the personal hearings on the above dates. Thus, the contention of the petitioner with regard to non-grant of opportunity of personal hearing is contrary to the record and is hereby rejected.
Conclusion - The petitioner's writ petition is not maintainable and the same is dismissed, granting the petitioner the liberty to pursue the alternative remedy of appeal as provided under the Central Excise Act, 1944.
Petition disposed off.
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2025 (3) TMI 1243
Process amounting to manufacture or not - job work activities - liability to pay excise duty despite the principal manufacturers not filing the necessary declarations as per N/N. 214/86 CE - onus to prove - invocation of extended period of limitation - penalties under Rule 25 of the Central Excise Rules, 2002, read with Section 11AC of the Central Excise Act, 1944.
HELD THAT:- It is a cardinal principle of adjudication that the adjudicating authority has a bounden duty to address the contentions raised in the reply to show cause notice and pass an order either accepting the contentions or reject them, while stating reasons for the decision so taken. Indisputably the aforesaid contentions of the appellant, raised before both, the adjudicating authority and the appellate authority, has not elicited any rebuttal from both of them. Without specifically rebutting the contentions, merely the fact that the appellant is engaged in manufacturing parts of Motor Vehicle & Speedometer, parts of Power-Driven Pumps, parts of Textile Machinery & parts of Press Tools cannot lead to any automatic assumption that the job worked goods are also such parts as the onus is on the Revenue to prove that the appellant has indeed manufactured dutiable goods.
The Honourable High Court of Bombay in the case of Annapurna Engineering Corpn v ACCE, Div-I Nagpur [2010 (9) TMI 369 - BOMBAY HIGH COURT] has held that failure to pass a reasoned order resulted in miscarriage of justice. While we would have ordinarily remitted the matter back for denovo adjudication, given the efflux of time of nearly a decade and the quantum of revenue involved, we think that this is a fit case where the indolence of the adjudicating and appellate authorities ought not to result in protracting the litigation for the appellant for no fault of the appellant and instead the benefit ought to enure to the appellant.
A coordinate bench of this Tribunal in its decision in Southern Plywoods v CCE (Appeals), Cochin [2009 (2) TMI 331 - CESTAT, BANGALORE], have found that non consideration of all the submissions of the appellant and passing the orders without discussion thereon renders the order liable to be set aside. Accordingly, we hold that the impugned OIA is liable to be set aside on this ground alone.
It is not the case of the Revenue that the goods cleared by the appellant are further not utilised by the principal manufacturers in their manufacture, rather it has been found that the goods received from the job worker (i.e. the appellant) are further used in the manufacture of parts of motor vehicles, pumps, machineries etc. The denial is solely on the ground that on enquiry with the jurisdictional ranges of the Principals it is found that the Principal manufacturers have not filed declarations under the said notification 214/86 CE ibid.
Extended period of limitation - HELD THAT:- The appellate authority has upheld the invoking of extended period of limitation as a natural corollary of non payment of duty and incorrect adoption of valuation which came to the knowledge of the department only through scrutiny by Audit. The said finding, is not in consonance with the requirement of statute. In the absence of any positive evidence let in by the department of wilful suppression of facts or misstatement with intent to evade payment of duty, the invocation of extended period is untenable, more so when the appellant were under the bonafide belief that their activity does not amount to manufacture as they were only clearing semi-finished goods manufactured out of the raw materials supplied to them by the principal manufacturer and clearing the same to the principal manufacturer - even otherwise the demand is substantially also barred by limitation.
Conclusion - i) The procedural lapses by principal manufacturers should not negate substantive benefits to job workers. ii) The invocation of the extended period of limitation requires explicit evidence of wilful suppression, which was absent in this case. The demand is barred by limitation.
Appeal allowed.
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2025 (3) TMI 1242
Justification in demanding duty by allowing the valuation of the goods manufactured by the appellant job worker, in view of the amendment to Rule 10A of the Central Excise Valuation Rules, 2000 - HELD THAT:- The facts not in dispute are that the Appellants had been engaged by M/s.Marico Ltd. (hereinafter referred to as the Principal Manufacturer) for the purpose of job work and the Appellants had manufactured the impugned goods out of the raw materials supplied by the principal manufacturer. The appellants had cleared the goods to the principal manufacturer who in turn had captively consumed the goods for further manufacture. The appellants had adopted the value comprising the cost of materials used and conversion charges following the principles laid down by the Apex Court in the case of Ujagar Prints Ltd [1989 (1) TMI 124 - SUPREME COURT].
Admittedly, the FAA has applied Rule 10(A)(iii) in the case on hand to hold that the valuation as prescribed thereunder would apply for determination of the value of the excisable goods. He thus upholds the demand of duty, but however, penalties imposed by the original authority in respect of both the appeals are set aside. The appellant here-in has challenged the duty demand confirmed against them, while the revenue has accepted the deletion of penalties on these appellants.
Conclusion - The valuation of goods manufactured on a job work basis should align with the Supreme Court's ruling in Ujagar Prints, which considers the cost of materials and conversion charges.
The impugned orders in appeal cannot sustain insofar as the duty demand which is challenged in these appeals is concerned - Appeal allowed.
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2025 (3) TMI 1241
CENVAT Credit - input services or not - services provided by call centres - services used for 'sales promotion' or not.
As per P. K. Choudhary, Member (Judicial)
HELD THAT:- From the bare reading of the definition of ‘Input Service’, as defined under Rule 2(l) of the Cenvat Credit Rules, 2004, it is clear that, the definition is divided into two parts, i.e. (i) Means- Clause and (ii) Inclusive- Clause. Further, vide Notification No. 3/2011-CE (NT) an Exclusion-Clause was included in the definition. The services excluded were Construction Service, Rent-a-Cab Service, General Insurance Service for motor vehicles and Repair Service. The Cenvat credit in relation to these services is allowable either to certain service providers only or on the satisfaction of certain conditions. Furthermore, the services that are used primarily for personal use or consumption of any employee like outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club etc. are also excluded from the definition of the input services.
In the present case, the Appellant is receiving the service of Call Centres which helps in building brand image of the Appellant which ultimately leads to sale of the final products. Such sale being the goal of undertaking the activity of manufacture and the aforementioned services having been received in relation to sale of the final product manufactured by the Appellant, can be said to have been used in relation to manufacture of the final product of the Appellant. Hence, they qualify as an input service. The services in relation to 'Sales Promotion' have nexus with the manufacturing activity as sale is the most logical conclusion of manufacturing activity and any effort made to boost the sale is bound to influence the manufacturing. Therefore, credit in question is admissible to the Appellant.
There is no provision in the format of the ER-1 Returns to mention the amount of Cenvat credit availed under each service category or transaction-wise. Only the total availment of Cenvat credit is required to be reflected in the return. Therefore, the finding that the Appellant did not inform the Department of such availment of Cenvat credit on the said services is unsustainable.
Suppression of facts or not - demand of interest and penalty - time limitation - HELD THAT:- The present case involves interpretational issues involving complex legal provisions to determine the correct admissibility of Cenvat credit. It is a settled position that a case involving interpretation of the statutory provisions cannot be construed to be a case of wilful misstatement or suppression of facts, with intent to evade payment of tax or avail Cenvat credit in a fraudulent manner.
As per Section 11AC of the Act read with Rule 15 of Cenvat Credit Rules, 2004 the penalty can be imposed only in cases of fraud, collusion, wilful misstatement or suppression of facts or contravention of provisions of Excise Act with an intention to evade payment of duty. There are no ingredient to indicate that the Appellant contravened any provisions of law as they did not avail any credit in contravention of any provisions of law.
According to Rule 14 read with Section 11AA, interest is chargeable only when any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded or Cenvat credit has been erroneously taken and utilized. The situations contemplated under Rule 14 as well as under Section 11AA are absent in this case. Therefore, where the demand of Cenvat credit is itself liable to be set aside, as a necessary consequence, interest is also not payable.
The impugned order is set aside and appeal is allowed.
As per Sanjay Srivastava, Member (Judicial)
CENVAT Credit of input services - services provided by call centres - sales promotion services or not - HELD THAT:- In respect of input services there is no requirement for admissibility of credit that services should received within the registered manufacturer/premises of the appellant till the time loose nexus can be established between the use of the services directly or indirectly in relation to output goods being manufactured by the appellant. The credit in such cases need not be denied.
Issue has been decided by Hon’ble Bombay High Court in the case of M/s Coca Cola India Pvt. Ltd. [2009 (8) TMI 50 - BOMBAY HIGH COURT] where it was held that 'It is therefore, clear that the burden of service tax must be borne by the ultimate consumer and not by any intermediary i.e. manufacturer or service provider. In order to avoid the cascading effect, the benefit of cenvat credit on input stage goods and services must be ordinarily allowed as long as a connection between the input stage goods and services is established. Conceptually as well as a matter of policy, any input service that forms a part of the value of the final product should be eligible for the benefit of Cenvat Credit.'
The services of ASC and DSC availed by the appellant definitely go to enrich the value of the output goods cleared by them by creating a brand image for the appellant. Hence, in terms of the Rule 2(l) of Cenvat Credit Rules, exists between the said services and the goods being cleared by the appellant. There are no merits in the order denying the Cenvat credit in respect of these services.
As the demand is being set aside, penalties imposed and demand for interest is also set aside.
Conclusion - i) The services provided by call centres qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004, as they are related to sales promotion and brand building, which are integral to the manufacturing process. ii) There are no evidence of fraud or suppression by the appellant, and thus, penalties and interest were not justified.
The impugned order cannot be sustained - appeal allowed.
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2025 (3) TMI 1184
Challenge to SCN issued by the respondent u/s 11-A of the Central Excise Act - issuance of a personal hearing notice after a significant delay - HELD THAT:- In the instant case, though replies were sent to the impugned show cause notice dated 11.12.2007 as early as in the year 2007 itself, the said replies have not been considered by the respondent in accordance with the procedure contemplated under Section 11-A(10)(11) of the Act. The respondent has failed to determine the amount of duty due from the petitioner after affording an opportunity of hearing to the petitioner, and after giving due consideration to the replies sent by the petitioner to the show cause notice. Section 11-A(11) of the Act, also makes it clear that the respondent shall determine the amount of duty of excise payable by the petitioner within six months from the date of notice in respect of cases falling under sub-section(1); and within two years in respect of cases falling under sub-section (4).
In the case on hand, the respondent has not adhered to Section 11-A(11) of the Act and till date, they have failed to determine the amount of duty of excise payable by the petitioner pursuant to issuance of the impugned show cause notice dated 11.12.2007. After a lapse of more than 16 years, the respondent has sent a notice of personal hearing dated 28.07.2023 to the petitioner pertaining to the impugned show cause notice dated 11.12.2007, which is not legally permissible in law. Any proceeding initiated by the respondent without authority under law has to be set aside by this Court - In the instant case, personal hearing notice dated 28.07.2023 has been issued by the respondent without authority under law, that too, after a lapse of 16 years. Even though the learned counsel for the respondent would submit that due to an audit objection there was a delay in proceeding further after the issuance of show cause notice, the said submission has to be rejected by this Court, as, for no fault on the petitioner, they cannot be penalised without authority under law.
Conclusion - The impugned personal hearing notice dated 28.07.2023 is issued in violation of the statutory provisions and without authority under law.
Petition allowed.
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2025 (3) TMI 1183
Rejection of present application for considering the additional grounds - demand for Basic Excise Duty (BED) and National Calamity Contingent Duty (NCCD) for the period from 15.01.2020 to 31.12.2021, along with interest and penalty - HELD THAT:- There are no reason to reject the present application for considering the additional grounds. However, considering that the issue is also on sustainability of the demand as held by Hon’ble Supreme Court and since the issues were not considered by the adjudicating authority, it is proper for this Tribunal to remand the matter to Adjudicating Authority.
As regards penalty and demand by invoking Rule 12(5) of the Central Excise Rules 2017, it is found that the appellant had challenged the Notification No. 3/2019-CE dated 06.07.2019 by filing Writ Petition No. 651/2020 and only consequent to the stay order passed by the Hon'ble High Court of Karnataka, Appellant had stopped payment of BED and NCCD, on the manufacture and clearance of Chewing Tobacco, with effect from 15.01.2020. They had also stopped filing the statutory returns in Form ER-1, for the said period. In such a situation, no finding can be given that the appellant had failed to file statutory returns to invoke Rule 12(5) of the Central Excise Rules, 2017 or failed to pay appropriate BED and NCCD during the impugned period on the manufacture and clearance of goods with an intent to evade payment of duty. Thus invoking the penal provision under Section 11AC (1)(a) of the Central Excise Act, 1944 and demand under Rule 12(5) of the Central Excise Rules, 2017 are unsustainable.
Conclusion - i) The application for additional grounds is allowed. ii) The penalty under Section 11AC(1)(a) and the demand under Rule 12(5) were set aside. iii) The demand for BED and NCCD was remanded for reconsideration by the adjudicating authority. iv) The adjudicating authority was directed to pass an appropriate order within three months, considering all issues and grounds raised by the appellant.
Application allowed.
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2025 (3) TMI 1182
Classification of goods namely Student Almanac and teacher planner, Diaries, Workbook, Calendars, Note-Pads and Scrap books - to be classified under Chapter 49 of the Schedule to the Central Excise Tariff Act, 1985 or under Chapter 48 as “Articles of Paper or of Paper Board” and attract duty @ 12.5% ad valorem? - exemption from waste and scrap under N/N. 27/2011-CE dated 24.03.2011 - invocation of extended period of limitation - Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Director of the assessee.
Classification of Student Almanac and teacher planner - HELD THAT:- The Student Almanac is the same as a diary except that it is customized to meet the requirements of students of the particular school. Therefore, the information relevant to that school is printed in it. The submission of the learned counsel that since Student Almanac is used only by students of a particular school, it becomes a product of printing industry cannot be accepted. Undisputedly 90% of the space in the Student Almanac is left blank for students to write. Providing additional information relevant to the school does not make it a product of printing industry. The teacher planner, likewise is to help to make notes and, therefore, stand on the same footing - the submission of the assessee deserves to be rejected.
Waste and scrap - HELD THAT:- The only submission of the assessee with respect to waste and scrap is that since Student Almanac and teacher planner were exempted from payment of duty, the scrap generated also should be exempted by virtue of N/N. 27/2011-CE. The submission of the Revenue is that since Student Almanac and teacher planner and other products, such as, diaries, note pads were exigible to duty, the assessee was not entitled to exemption from waste and scrap. For the reasons stated above while dealing with classification of Student Almanac and teacher planner, the submission of the learned authorized representative deserves to be accepted and the assessee is not entitled to the benefit of exemption on waste and scrap.
Extended period of limitation - penalty - HELD THAT:- There was no evidence of intention to evade payment of duty and suppression of facts because it was possible for the assessee to have entertained the belief that the Student Almanac and teacher planner were not exigible to duty and, therefore, to have NOT declared them in their excise returns - the question of limitation found in favour of the assessee and against the Revenue and the impugned order needs to be upheld in so far as this limitation is concerned. Consequently, the penalty under section 11AC was also correctly set aside by the Commissioner (Appeals) in the impugned order.
Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Director of the assessee - HELD THAT:- In this case there is no confiscation of the goods nor is there any allegation that any Cenvat credit has been wrongly taken - the Commissioner (Appeals) was correct in setting aside the penalty on Shri Kishore Mittal under Rule 26 of the Rules.
Conclusion - i) Student Almanac and Teacher Planner are classifiable under Chapter 48 due to their primary purpose for writing, similar to diaries. ii) The denial of exemption for waste and scrap, as dutiable goods are manufactured alongside exempted goods upheld. iii) There are no evidence of intent to evade duty or suppress facts, supporting the decision to set aside the demand for the extended period. iv) The decision to set aside the penalty on the Director upheld, as the conditions for imposing a penalty under Rule 26 were not met.
Appeal dismissed.
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2025 (3) TMI 1134
Refund of unutilized CENVAT credit - closure of factory - rejection of refund on the ground that there was no export clearance made by the appellant - HELD THAT:- Since the appellant does not export the goods refund of CENVAT credit shall be allowed as he does not fullfill the conditions above. Further due to the absence of exports ‘the ratio of export turnover to the total turnover’ cannot be determined.
The Honorable Supreme Court UNION OF INDIA & ORS. VERSUS VKC FOOTSTEPS INDIA PVT LTD. [2021 (9) TMI 626 - SUPREME COURT] held that, refund is not a constitutional right but a statutory right and therefore, the legislature, in its wisdom, and through statute, can decide how the refund is to be granted.
The judgment of the Hon’ble Bombay High court in GAURI PLASTICULTURE [2019 (6) TMI 820 - BOMBAY HIGH COURT], discusses the legal issues and the judgments cited by the appellant, comprehensively. It thus merits to be followed. Thus, it is concluded that rule 5 of CCR read with N/N. 05/2006-CE(N.T.), as it then stood, i.e. prior to 01.04.2011, does not permit the refund of credit which is not on account of the export of goods. Section 11B(2)(c) of CEA is to be read with the rules or notification issued under the Act, and would hence necessarily involve Rule 5 of CCR and N/N. 05/2006-CE(N.T.). The refund claim of the appellant has thus been correctly rejected in the impugned order.
Conclusion - The legal framework, as interpreted by the relevant precedents, did not support the appellant's claim for a refund of unutilized CENVAT credit in the absence of export activities.
Appeal dismissed.
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2025 (3) TMI 1133
Process amounting to manufacure or not - activities of cutting / slitting of H.R. Coils, etc. - applicability of C.B.E.C. Circular No. 811/08/2005-CX. dated 02.03.2005 - procedure laid down in Rule 3(4) (b) of the CENVAT Credit Rules, 2004 followed or not - non-imposition of penalty under the provisions of Rule 15(1) of CENVAT Credit Rules, 2004 - Extended period of limitation - suppression of facts or not.
Process amounting to manufacture - HELD THAT:- The Respondent are engaged in cutting/slitting of H.R.Coils and conversion of the same to M.S. Plates. The said process does not amount to manufacture. Since the process does not amount to manufacture, the Respondent took recourse of Rule 16 of the Central Excise Rules, 2002, i.e. they used to bring the H.R. Coils under Rule 16(1) of the said rules and availed CENVAT Credit in terms of the said rules. After the conversion i.e., cutting/slitting of the goods, the resultant products, i.e. M.S. Plates were removed by debiting an amount as prescribed under Rule 16(2) of the said rules. This procedure adopted by them was known to the Department as the said procedure was advised by the jurisdictional Assistant Commissioner.
Extended period of limitation - suppression of facts or not - HELD THAT:- There is no suppression of facts with intention to evade the duty established against the Respondent in this case. Hence, the ld. adjudicating authority has rightly held that the extended period is not invocable in this case and dropped the demand raised in the notices by invoking extended period of limitation.
Non-imposition of penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 - HELD THAT:- In the instant case, the Respondent has paid an amount equal to the credit taken while clearing the goods after processing. The Department has accepted the equal amount of credit paid by the Respondent under Rule 16(2) of the Central Excise Rules, 2002.
In a catena of decisions it has been held that though the process does not amount to manufacture, credit on inputs cannot be denied as the manufacturer paid duty on the final products.
The Respondent has rightly availed credit on the inputs and paid an amount equal to the credit taken at the time of clearance of the goods as provided under Rule 16(2) of the Central Excise Rules, 2002. Thus, we observe that the allegation of irregular availment of credit against the Respondent does not survive. Once, the credit availed by the Respondent is found to be regular, there is no irregularity in utilising the same to discharge the payment as per Rule 16(2) of the Central Excise Rules. Since the availment of credit and subsequent utilisation of the same for paying the amount as per Rule 16(2) of the Central Excise Rules,2002 are found to be regular, no penalty imposable on the Respondent. Consequently, there are no infirmity in the impugned order passed by the Ld. adjudicating authority.
Conclusion - The duty paid by the appellants has been accepted by the department which is admittedly more than the CENVAT credit availed by the appellants. The appellants are not required to reverse the credit.
Appeal of Revenue dismissed.
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2025 (3) TMI 1098
Clandestine manufacture and removal - MS ingots - recovery of incriminating records, seizure of one pen drive, one computer and a hard disk and various other incriminating documents - existence of corroborative evidence or not - admissibility of the printed material under Section 36B of CEA - Mandatory complaince with Section 9D by the Adjudicating Authority or not - non-compliance with the mandate of Section 9D(2) be raised at the Appellate Stage when not raised before the Adjudicating Authority - electronic evidence collected admissible given the absence of certificate issued under Section 36B(4) or not - HELD THAT:- Both S.14 and S.9D of the CE Act are pari-materia with S.108 and S.138B of the Customs Act respectively and therefore judicial pronouncements in respect of these provisions of Customs Act, 1962 would also hold good for the pari-materia provisions of Central Excise Act, 1944.
A three judge bench of the Honourable Supreme Court, in K. I. Pavunny v Asst.Collr.(H.Q).,C.Ex.Collectorate, Cochin, [1997 (2) TMI 97 - SUPREME COURT], had an occasion to consider whether the confessional statement of the appellant therein, given to the Customs officers under Section 108 of the Customs Act, 1962 (for short, the `Act’), though retracted at a later stage, is admissible in evidence and could form basis for conviction and whether retracted confessional statement requires corroboration on material particulars from independent evidence.
The Supreme Court in Ram Bihari Yadav vs. State of Bihar [1998 (4) TMI 578 - SUPREME COURT] itself has observed that more often than not, the expressions 'relevancy and admissibility' are used as synonyms but their legal implications are distinct and different from for more often than not facts which are relevant are not admissible; so also facts which are admissible may not be relevant, for example questions permitted to put in cross examination to test the veracity or impeach the credit of witnesses, though not relevant are admissible. The probative value of the evidence is the weight to be given to it which has to be judged having regards to the fact and circumstances of each case.
Since the adjudicating authority has not followed the mandate of Section 9D (2) in the instant case and had not given an opportunity to the affected party to make submissions post intimation of his intent to rely on such materials duly stating the reasons why he intends to arrive at the said opinion. We are therefore of the considered view that the adjudicating authority has grossly erred in placing reliance on the statements recorded under Section 14 without following the mandate of Section 9D of the CEA. The reliance placed by the adjudicating authority on all these untested statements cannot sustain. This has rendered the case of clandestine removal made against the appellants wholly unsustainable on this ground alone.
Whether the electronic evidence collected during investigation in this case, is admissible given the absence of certificate issued under Section 36B? - HELD THAT:- Given that the Adjudicating Authority, despite noticing the protestations of the appellants regarding noncompliance of Section 36B (4), and even after the law was laid down in P.V. Anvar’s case [2014 (9) TMI 1007 - SUPREME COURT], yet chose not to cure the same, we refrain from embarking on this course of remand as it would tantamount to affording a second opportunity that was undeserved, not to mention the prolongation of the litigation, which the appellants do not deserve. Moreso, since it is conscious that there are balance the rights of the parties before us, and such conscious non-compliance by the adjudicating authority has to be considered adversely to the detriment of the Revenue and the benefit thereof should then enure to the appellants.
The ‘standard of proof’ denotes the level of conviction or the ‘decisional threshold’ that enables the court to decide whether the party who shoulders the burden of proof has discharged the same. In customs and excise matters, where the assessee can be visited with financial penal consequences, Courts have always tried to apply a qualified preponderance of probabilities standard - The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility.” Thus, while the general standards of proof for civil cases are the preponderance of probability and the standards for criminal cases are beyond reasonable doubt, these standards have also been eschewed in favour of “clear and convincing evidence” when the allegations are of more serious nature and also attract heavy financial consequences.
Having detailed some of the lacunae and shortcomings in the investigation supra as well as the standard of proof required to be adduced by Revenue in clandestine removal matters as aforementioned, we shall now deal with the evidence relied upon qua each of the demands confirmed in the impugned order and examine whether the evidence relied upon meet the standard of “clear and convincing evidence”, to establish the case of clandestine removal and to establish the availment of cenvat credit without actual receipt of inputs.
The Department has not let in any evidence in the form of unaccounted procurement of the other raw materials required for manufacture of MS Ingots, evidence of their procurement, evidence of the quantum of fuel/ electricity, labour etc., used, the examination or test evaluation of the production capability and capacity of the Appellant’s factory etc.
There are no quarrel with the proposition of the Authorised representative in his contention that as per Section 61 of the erstwhile Evidence Act, 1872 it is necessary that the contents of a document has to be proved either by primary or secondary evidence and that the evidence of the contents contained in a document is hearsay evidence unless the writer thereof is examined before the court and further that as per section 67 of the erstwhile Evidence Act, 1872, the signature or handwriting of the person alleged to have signed the whole or part of the documents has to be proved. These contentions are precisely in tandem with our findings supra on the manner in which the adjudicating authority has to evaluate the statement under Section 14 for its relevance as per the mandate of Section 9D(2). However, the reliance placed by the authorised representative on Section 36A (1) and 36A(2) are misplaced in that these presumptions would apply only in a proceedings before the Court, being rebuttable presumptions. However, unlike Section 9D (2) or Section 36B which deems a document to be admissible in any proceedings under the Act when accompanied with the certificate mandated under Section36B(4), Section 36A does not permit the presumption to be drawn in adjudicatory proceedings under the Act and is confined only to Court proceedings.
There is no justification available, either in the show cause notice, or in the impugned order, to explain the absence of statements of most relevant persons or the reasons for delay in conducting follow up searches. The transporters, who actually transported the goods, have also not been questioned. In short, the investigation has failed to establish the allegations raised in the show cause notice and the findings of the adjudicating authority are also decidedly untenable in the light of discussions regarding the lack of demonstrable, reliable and corroborative evidence.
Conclusion - The finding of the adjudicating authority that the main appellant has indulged in clandestine manufacture and clearances of MS ingots during period February 2010 to February 2012 and the consequent demand of duty made is untenable; the demand of cenvat credit availed for the period February 2010 to May 2010 by the main appellant terming it ineligible, is incorrect; the demand made on M/s. SKSRM for clearances of TMT Rods alleged to have been cleared without payment of duty and allegedly made out of MS ingots procured from the main appellant without payment of duty, as confirmed in the impugned Order in Original, is untenable and consequently the penalties imposed on the appellants are unsustainable.
Appeal allowed.
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2025 (3) TMI 1059
100% EOU - duty not paid properly on DTA clearances - it is alleged that the appellant needs to pay CVD on Tariff Rate and not on Effective Rate as per Notification No.01/2011 dated 01.03.2011 - liability to pay interest and penalty thereon - HELD THAT:- A 100% EOU must meet the following conditions : (i) that the unit must be a 100% EOU as defined under Chapter 6 of the Foreign Trade Policy (FTP); (ii) the unit must have obtained the necessary permissions and approvals from the relevant authorities. In this regard, Notification No. 52/2003-Central Excise (NT) outlines the concessional Excise Duty rates applicable to EOUs. Further, clearance of goods into Domestic Tariff Area under Paragraph 6.8 of the Export and Import Policy shall be allowed only when the unit has achieved positive Net Foreign Exchange Earning.
Further, the DTA clearances of finished goods covered under GST, EOUs are required to pay CGST/SGST/UTGST/ IGST, as the case may be, besides payment of whole of the Duty of Customs specified under the First Schedule to the Customs Tariff Act, 1975 (BCD) availed as exemptions on inputs used in manufacture of such finished goods. In respect of DTA clearances of finished goods covered under Fourth Schedule of the Central Excise Act, 1944, the EOUs would be required to pay Central Excise Duty equal to the aggregate of Duties of Customs in terms of proviso to Section 3(1) of the Central Excise Act, the effective rate of such duties being covered by Notification No. 23/2003 – CE, which has also been amended by Notification No.16/2017 – CE dated 30.06.2017. In other words, the excisable goods are liable to effective excise duty as it existed before GST.
It is clear that the EOUs are generally eligible for a concessional rate of excise duty on goods cleared to the DTA, with rates determined based on the effective rate of CVD applicable to similar imports.
Conclusion - The appellants were entitled to discharge CVD on the effective rate of duty as envisaged under N/N.01/2011-CE dated 01.03.2011.
Appeal allowed.
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2025 (3) TMI 1058
SSI Exemption - clubbing of clearances of three firms - M/s. Meena Fire Works Industries, M/s. Meena Fire Works, and M/s. Meena Sparklers should be treated as a single manufacturer under section 2(f) of the Central Excise Act, read with para 2(v) of Notification No.8/2003-CE. or not - denial of cross-examination of the investigating officer by the adjudicator - demand with penalty - delay in adjudication.
HELD THAT:- As per condition (v) and (vii) of para 2 of the exemption notification No.8/2003-CE dated 01-03-2003, there ought to be a manufacturer who has a factory or factories, the clearances of which are to be taken in aggregate for determining the exemption in the event of a manufacturer having clearances from more than one factory. Therefore, for the purposes of clubbing of clearances it is an imperative prerequisite that one unit is identified or determined as the principal entity to which the clearances from the other units or factories then get clubbed and the proposal for demand is then required to be raised on the said principal entity. Evidently, the attempt of the Department here is to deny the benefit of exemption notification individually to the three units, as the Department is of the view that the three brothers have indulged in subterfuge of maintaining separate units while exercising financial and managerial control over all the three.
This Tribunal in Amit Talwar v CCE, Delhi-I [2018 (5) TMI 667 - CESTAT NEW DELHI] has held that it is well-settled that demand cannot be made jointly and severally.
The lack of clarity in determining the ‘manufacturer’ from whom the demand of duty in the event of clubbing of clearances ought to be made and non-identification of any such principal entity and instead embarking on proposing a demand on a department mooted ‘group of persons comprising of the three brothers’ / ‘group of firms’ comprising of the three firms, neither of which proposal has any legal basis in the provisions of Central Excise Act, 1944 or the Rules made thereunder, indicates the indelible taint of non-application of mind that permeates the entire proceedings right from conceptualisation of the demand in the SCN to the confirmation of the demand in the impugned order in original. Such an attempt of foisting a fictional financial entity onto the appellants and pegging a demand thereon, is devoid of any legal backing and vitiates the proceedings in toto.
Since the lacunae of lack of clarity in demand exists in the demand proposal in the SCN as well as its confirmation in the impugned OIO, it is a fundamental flaw that cannot be cured and the impugned order in original is liable to be set aside on this count alone.
Request of the counsel for the appellant for cross examination of the investigating officer and the officers before whom the statements were recorded was denied stating it will delay the adjudication proceedings - HELD THAT:- In the impugned proceedings, the Adjudicating Authority has not observed the mandate of Section 9D while admitting in evidence the statements given under Section 14 of the Central Excise Act, 1944 and has not deposed the deponents who had given such statements and where deposed and cross-examined has not stated any reason why the statements as originally deposed alone is to be relied on or in other words, the adjudicating authority has not given any reason for discarding the deposition made during cross-examination, such as that he is treating the witness as hostile or that the contradiction/inconsistencies are minor enough to be discarded.
The request of the appellant for cross examination of the Investigating Officer, after having given up his request for cross examination of the other Departmental Officer sought, cannot be said to be unreasonable. The denial of cross-examination of the investigating officer by the adjudicator is a violation of the appellant’s right in this regard as held by the Honourable High Court of Allahabad in CCE, Allahabad v. Govind Mills Ltd. [2013 (8) TMI 649 - ALLAHABAD HIGH COURT] and CCE Meerut I v R.A. Castings Pvt Ltd [2010 (9) TMI 669 - ALLAHABAD HIGH COURT].
Also, the appellant’s contentions on quantification of the duty demand have not been controverted by the Adjudicating Authority. Admittedly even the long note books relied for quantifying the alleged unaccounted removal contains entries only for the period from April 2007 to September 2009. Admittedly for the period from October 2009 to March 2010 there was no evidence available pertaining to unaccounted clearances and the show cause notice had proceeded to quantify the same adopting the average value of the preceding year’s clearances, that is clearance from October 2007 to March 2008 and October 2008 to March 2009 to arrive at an average value of clearances per day and then to presumptively quantify the unaccounted clearance for the period October 2009 to March 2010, as is evident from the remarks in the column in the worksheet at Annexure C(i) and para 15.3 of the SCN at page 84-85. Similarly, for the period 2010-11 and 2011-12 the show cause notice has not even an iota of evidence to rely on for determining the quantification of the alleged clandestine removals.
In the instant case the evidence adduced is woefully inadequate, much less ‘clear and convincing evidence’. Apart from the reliance placed on the statements, which is determined as inadmissible, the information found in the long and small note books and other records at best would prima facie create a strong doubt about the unaccounted manufacture and clearance of fireworks and sparklers - mere indication of credit entries is of no avail without any explanation as to the nature of such credits. The SCN alleges that the appellants had deposited Rs.17,00,000/- in TMB and such entries were touted as indication of profit earned out of illicit transactions. The appellant in its reply at para 18.8 has categorically rebutted the same stating that no such deposit was made and in evidence enclosed letter dated 24.03.2012 of the Manager of the said Bank and contended that such wrong averments were made to prejudice the mind of the adjudicating authority. In fact, the adjudicating authority has not controverted the categorical rebuttals of these entries which the appellant has stated is misplaced. The reconciliation statement in respect of the bank accounts provided along with the reply to substantiate their defence was also not controverted by the adjudicating authority.
Delay in adjudication - HELD THAT:- The decision of this Tribunal in Kopertek Metals Pvt Ltd [2024 (12) TMI 269 - CESTAT NEW DELHI], which turns on the peculiar facts and circumstances of that case, cannot be construed as laying down a blanket proposition that any delay in adjudication beyond the time limit prescribed under sub-section 11 of Section 11A of the Central Excise Act would automatically result in the impugned order being vitiated for non-adherence to the time limit stipulated, dehors an examination of the facts and circumstances or insurmountable exigences which made it impracticable for the adjudication to take place, as has been held by the Delhi High Court in Swatch Group [2023 (8) TMI 864 - DELHI HIGH COURT].
Conclusion - i) The finding of the Adjudicating Authority that M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers are to be treated as one single manufacturer manufacturing and clearing fireworks from their factories in terms of section 2(f) of Central Excise Act read with para 2(v) of the Notification No.8/2003-CE dated 01.03.2003 as amended, is wholly untenable and cannot sustain. ii) The finding of the Adjudicating Authority that the value of clearances of fireworks including sparklers manufactured and cleared from M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers during the period 2007-08 to 2011-12 should be clubbed together in terms of para 2(v) of the Notification No.8/2003-CE dated 01.03.2003 as amended to determine the aggregate value of clearances for demanding duty from the said three firms, is wholly untenable and cannot sustain.
Appeal allowed.
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2025 (3) TMI 1057
Process amounting to manufacture or not - activities undertaken at the Central warehouse, where the activity of packing, re-packing and labelling was carried out by the appellant - demand of excise duty on re-packed spare parts on the ground that these goods were parts of motor vehicles (automobiles) and these parts were covered under Sl. No.100 of the Third Schedule to the Central Excise Tariff Act, 1985 - HELD THAT:- The issue involved in this appeal was decided by the Larger Bench of the Tribunal in ACTION CONSTRUCTION EQUIPMENT LTD. [2023 (6) TMI 1320 - CESTAT MUMBAI (LB)]. The present appeal is also covered by such order of the Larger Bench.
On careful reading of the decision given by the Larger Bench of the Tribunal on the disputed issues, it is found that the amendment carried out w.e.f. 29.04.2010 makes it abundantly clear that a legislature did not intend to tax the parts, components and assemblies of earthmoving equipment etc. under the Head “Automobiles”; therefore, to this extent, the adjudged demands for the period prior to 29.04.2010 cannot be sustained.
Further, it is a fact on record that Third Schedule to the Central Excise Tariff Act, 1985 was retrospectively amended vide Finance Act, 2011 read with Finance Act, 2012, with effect from 29.4.2010. Accordingly, from 29.4.2010, the appellant started discharging the excise duty on activity of packing / re-packing and affixing MRP undertaken on spare parts at warehouse, on the basis of MRP-based assessment. This was also confirmed by the jurisdictional Commissioner of Central Excise, Nagpur vide their letter dated 07.01.2014 submitting therewith the verification report dated 30.12.2013 received from the Assistant Commissioner of Central Excise Division-II, Nagpur that the appellant is discharging the Central Excise duty on MRP basis.
In finally answering the issues on which reference was made to Larger Bench, on account of difference of opinion between two Co-ordinate Benches of the Tribunal and based on the direction given by the Hon’ble Supreme Court, it was held 'The amendment made in the Third Schedule to the Central Excise Tariff Act by Finance Act, 2011 w.e.f. 29.04.2010 by adding serial no. 100A to the Third Schedule is prospective in nature.'
Thus, on the basis of the decision given by the Larger Bench, it is concluded that the adjudged demands for the period October, 2006 to 28.04.2010 is not sustainable.
Conclusion - i) The term "automobile" should be interpreted based on common parlance and dictionary definitions rather than definitions from other statutes. ii) The activities undertaken by the appellant did not amount to "manufacture" for the relevant period, and the classification of the parts as "automobiles" was not applicable. Therefore, the excise duty demands were not legally sustainable.
Appeal allowed.
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2025 (3) TMI 964
Condonation of inordinate delay of 546 days in filing the appeal - sufficient cause for delay or not - HELD THAT:- It is not in dispute that the appellant’s appeal before the CESTAT was dismissed on merits on 27-7-2016 and it is also not in dispute that appeal under Section 35G of the Act of 1944 was preferred by the appellant only on 23-6-2018, whereas the appeal has to be preferred within 180 days from the date of communication of the order to the aggrieved party. As such, it is filed with an inordinate delay in filing the appeal i.e. 546 days and the reason assigned in the application is only and only that Tax Case No.59/2011 was pending before this Court in which the question of law involved in this appeal is also required to be adjudicated and once it has been adjudicated by this Court in Tax Case No. 59/2011 on 13-9-2017, the appeal came to be filed.
In this regard, the legal position pertaining to the question whether while considering the plea for condonation of delay, the Court can look into the merits of the matter, is well settled and recently it has been held so by their Lordships of the Supreme Court in the matter of H. Guruswamy and others v. A. Krishnaiah since deceased by LRs [2025 (1) TMI 1524 - SUPREME COURT] in which it has been held that while considering the plea for condonation of delay, the court must not start with the merits of the main matter, and observed as 'While considering the plea for condonation of delay, the court must not start with the merits of the main matter. The court owes a duty to first ascertain the bona fides of the explanation offered by the party seeking condonation. It is only if the sufficient cause assigned by the litigant and the opposition of the other side is equally balanced that the court may bring into aid the merits of the matter for the purpose of condoning the delay.'
The appellant was required to prefer appeal immediately after the impugned order dated 27-7-2016 was communicated to him. Even after the judgment in Tax Case No. 59/2011 was passed on 13-9-2017, he took more than nine months’ time to file appeal. Therefore, no cause much less sufficient cause has been shown for delay in filing the appeal.
Conclusion - The appellant has shown sufficient cause for condoning the delay of 546 days in filing the appeal, the delay cannot be condoned.
Appeal dismissed.
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