|
Advanced Search Options
Central Excise - Case Laws
Showing 1 to 20 of 81789 Records
-
2025 (4) TMI 104
Availability of CENVAT Credit on courier service post amendment of 2011 - input services - period involved of July, 2012 to June 2017 - HELD THAT:- This Court finds that the decision as contained in final order of Dynaflex Pvt. Ltd. Vs. CCE and ST Vadodara- ii, [2017 (8) TMI 1217 - CESTAT AHMEDABAD] in which, inter alia, the present appellant was also a party, was concerned with the period post amendment of year 2011 and was considered by the Bench, while dealing with the matter held that 'includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs. accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security business exhibition, legal services, Inward transportation of inputs or capital goods and outward transportation upto the place of removal, but excludes services.'
A simple reading of the said amended provision, makes it clear that though the expression 'activities relating to business, such as has been deleted, but the illustrative services viz., Accounting, Auditing, Financing, Recruitment and quality control, Coaching/training, Computer Networking, Credit Rating, Share Registry, Legal Services, Security, Business Exhibition etc., even though directly not related to manufacturing activity, being not used inside the factory premises, but continued to remain in the said definition of input service - It cannot be denied that 'Courier Service Involves a host of uses relating to the activity of manufacture and sale of goods. For example, the documents relating to technical expert's opinion, sample testing report, sending of samples, machine catalogue etc. are received and dispatched by utilizing the services of 'Courier' and it cannot be said that these are de hors of the activities of manufacturing business.
This Tribunal in the cases of Long Meditech Ltd [2016 (7) TMI 468 - CESTAT CHANDIGARH] and Sunbeam Generators Pvt Ltd [2016 (7) TMI 895 - CESTAT CHENNAI] opined that credit avail on Service Tax paid on 'Courier Serves' is eligible to Cenvat Credit.
Conclusion - The Service Tax paid on the 'Courier Services for various purposes viz., Sending Samples, Documents, finished goods etc., would be eligible to Cenvat Credit before and even after amendment to the definition to the 'Input Services' with effect from 01.4.2011.
Appeal allowed.
-
2025 (4) TMI 6
CENVAT credit on capital goods - to be determined based on the date of receipt of the capital goods or the date of commencement of production? - entitlement to avail CENVAT credit on capital goods used for manufacturing dutiable goods from the date the goods became dutiable - HELD THAT:- On perusal of the finding of fact arrived at by the Tribunal, it appears that the respondent assessee commenced its daily production of 600ML bottles on 29.03.2011 and before that in the months of January and February, 2011, production of Maaza RGB was shown as goods produced which are not manufactured on the capital goods in question as the capital goods in the present case were meant for production of Maaza in PET bottles. The Tribunal has therefore, rightly come to the conclusion on the basis of evidence produced on record by the respondent assessee that goods were manufactured on the capital goods meant for manufacture of Maaza PET bottles only from 29.03.2011 and on that date, finished goods were admittedly dutiable as exemption earlier provided on such final products was done away. Admittedly the capital goods were utilised for the purpose of production of products of respondent assessee which were dutiable after 01.03.2011.
There are no question of law much-less any substantial question of law arises from the impugned order of the Tribunal which requires any interference by this Court.
Appeal dismissed.
-
2025 (4) TMI 5
Failure to allow cross-examination of witnesses, as directed by the Central Excise & Service Tax Appellate Tribunal (CESTAT) - Violation of principles of natural justice - Section 9D of the Central Excise Act, 1944 - HELD THAT:- This Court has, in case of M/s. Atithi Gokul Automobile Works & Anr vs. Union of India [2024 (12) TMI 669 - GUJARAT HIGH COURT] involving similar facts remanded the matter back and held that 'The Tribunal has categorically observed that the adjudicating authority is to grant cross-examination of the persons as has been indicated in paragraph No. 4 of the order and subsequently, grant four weeks’ time to the petitioners to file a detailed reply. Both the directions of the Tribunal are not followed by the respondent No. 2 in letter and spirit and as such, the impugned order-in-original is liable to be quashed and set aside only on that ground.'
The impugned order-in original dated 30.10.2023 is hereby quashed and set aside and the matter is remanded back to the respondent No. 2. The respondent No. 2 shall comply with the directions of the order dated 04.04.2022 passed by the Tribunal and as the matter is very old, give priority to the same and pass fresh de novo order after giving an opportunity of hearing to the petitioners and compliance of the directions given by the Tribunal within a period of six months from the date of receipt of copy of this order - Petition allowed by way of remand.
-
2025 (4) TMI 4
SSI exemption under N/N. 08/2003-C.E. dated 01.03.2003 - exports made to Nepal should be included in the computation of the total value of clearances for the purpose of determining eligibility for the Small Scale Industries (SSI) exemption or not - HELD THAT:- As per this Notification, the goods cleared by the appellant are totally exempted up to the value of clearances of Rs.1.5 crores. As per the Notification No. 08/2003-C.E. dated 01.03.2003, the value of exports made to Nepal and Bhutan were included for the purpose of computation of value of clearances as provided under Explanation Clause (G) of Notification No. 08/2003 ibid. Circular No. 958/1/2012-CX dated 13.01.2012 was issued wherein it was clarified that exports to Nepal have been placed at par with exports to other countries, excepting Bhutan. However, during the impugned period, Notification No. 08/2003 had not been amended so as to exclude ‘Nepal’ from Explanation Clause (G) of the aforesaid Notification.
This issue has been examined by the Hon’ble Gujarat High Court in the case of M/s. Ketan Pottery Works v. Union of India [2016 (2) TMI 484 - GUJARAT HIGH COURT] wherein the Hon’ble High Court has declared the portion “and Nepal” in Explanation Clause (G) of Notification No. 08/2003 as unconstitutional in view of non-deletion of the same by the Government from the said Notification.
Conclusion - The value of clearances to Nepal are to be considered at par with exports made to other countries and hence, such values are not includable for the purpose of computation of the value of exemption limit under Notification No.08/2003-C.E. dated 01.03.2003.
The demand confirmed in the impugned order, by including the value of exports made to Nepal, is not sustainable and consequently, the same is set aside - Appeal allowed.
-
2025 (4) TMI 3
Method of valuation - Section 4A or Section 4 of the Central Excise Act, 1944? - switchgears manufactured by Appellant - invocation of extended period of limitation under proviso to Section 11A of CEA - Levy of Interest under Section 11AB and Penalty under Rule 25 read with Section 11AC.
Method of valuation - HELD THAT:- It was held by Hon”ble Karnataka High court in the case of Ewac Alloys Ltd [2011 (9) TMI 688 - KARNATAKA HIGH COURT] that even if the goods meant for industrial use are displayed at retail counters and sold, they are not chargeable to duty on the Basis of MRP - Tribunal in the case of Legrand (India) Pvt Ltd [2014 (2) TMI 407 - CESTAT MUMBAI] held that goods meant for industrial use, though packaged for ease of transportation can not be assessed to duty under Section 4A.
As far as the Appellant’s goods are intended for industrial use and declaration to that effect is available on the packages, a fact which is not contradicted by Revenue, there is no infirmity in the Appellant’s assessing the same under Section 4 of Central Excise Act, 1944. Revenue has not made out any case for assessment under Section 4A, despite the fact that they are sold through retail outlets/dealers/ stockists. Further, it is the argument of the appellant that even in cases where MRP was not declared, revenue had no mechanism to determine the same before the enactment of Central Excise valuation Rules w.e.f. 1.3.2008.
Extended period of limitation - HELD THAT:- There is considerable force in the submission of the appellants. The appellants are regular assesses and were filing returns regularly. Since they have declared the classification of the products under CETH 8536, department could have caused necessary verification and issue the Show Cause Notice in time. Revenue had no reason to wait for the anti-evasion team to visit the Appellant’s premises and find out what they have been declaring regularly - the department cannot hide the fact of non-scrutiny of the returns in even time and take shelter under the argument that the appellants were in the regime of self-assessment and allege suppression etc with intent to evade payment of duty, without adducing any evidence. The appellants were very much on the dash board of the department and audit was being conducted regularly. Failure of the jurisdictional officers and audit teams to detect anomaly if any, cannot be mitigated by alleging suppression on the part of the appellant. In view of the facts and circumstances of the case, the extended period cannot be invoked.
Interest - penalty - HELD THAT:- Since the duty is not payable, the demand of interest and penalty cannot be sustained.
Conclusion - i) Goods intended for industrial use, bearing a declaration to that effect, are not subject to MRP-based valuation under Section 4A of the Central Excise Act. ii) The extended period of limitation under Section 11A is not applicable when the appellant has disclosed all relevant information and there is no suppression of facts. iii) Penalties under Section 11AC and demands for interest are not sustainable when the primary duty demand is not upheld.
Appeal allowed.
-
2025 (3) TMI 1449
Entitlement to exemption under N/N. 12/2012-CE for goods supplied against International Competitive Bidding (ICB) and to Mega Power Projects - reversal of an amount equal to 6% of the value of exempted goods under Rule 6 of the Cenvat Credit Rules, 2004 - HELD THAT:- In the instant case, there is no dispute that the goods have been supplied against International Competitive Bidding. Therefore, it is prudent to examine if these goods, when imported in India, are exempt from duties of customs and the additional duty leviable under sub-Section 1 of Section 3 of the Custom Tariff Act, 1975.
It is not in dispute that the goods have been supplied by the appellant to Mega Power Project(s) as certified by the Joint Sectary to the Government of India in the Ministry of Power. We find that the lower authority have ruled that the Electrical Power Cables are not covered under Chapter Heading 98.01 of the Customs Tariff Act, hence, these are not exempt from basic Customs Duty as well as Additional Customs Duty. This reasoning seems incorrect as the Central Excise Tariff Act does not have any corresponding Tariff entry as it exists in Customs Tariff Act, 1985. This issue has already been decided by the Tribunal in the case of Cords Cable Industries Pvt. Ltd. Vs. Commissioner of C. Ex., Jaipur-I [2016 (9) TMI 1126 - CESTAT NEW DELHI], wherein it was held that electrical wires, cables supplied to Mega Power Projects are fully exempt under the corresponding Central Excise Notification read with Customs Notification.
However, Condition No. 93 to the Notification No. 12/2012-CUS dated 17.03.2012, also prescribes certain requirements to be fulfilled, for availment of the exemption from Customs Duty as well as Additional Customs Duty. These conditions are factual in nature as to whether Power Purchasing State has constituted the Regulatory Commission with full powers to fix Tariffs and whether the Power Purchasing States have undertaken to carry out distribution reforms as laid down by the Ministry of Power. It also needs to be seen whether procurement Certificates have been issued by the designated Authorities as per Sr. No. (b) and (c) of the Condition No. 93. The documents submitted along with appeal, do not contain all the relevant details which are to be seen in the matter.
It is fit to remand the matter to the adjudicating authority to see fulfilment of Condition No. 93 of Notification No. 12/2012-CUS dated 17.03.2012. If these Conditions are satisfied, then the appellant will not be required to reverse an amount as demanded by the department. The Bench directs the Appellant to produce relevant documents/Certificates in respect of supplies involved in the case before the adjudicating authority within one month for determining whether the Condition No. 93 of the said Customs Notification is satisfied in the case. The adjudicating authority also directed to decide the issue within 3 months from the date of production of above documents, as the matter is quite old.
The appeals are disposed off by way of remand to the adjudicating authority.
-
2025 (3) TMI 1448
Cenvat Credit on the Goods Transport Service (GTS) for outward transportation of cement from the depot to the buyer's premises on a FOR (Free on Road) basis - Extended period of limitation - HELD THAT:- It is not in dispute in this present appeal that wherever the sale has been on FOR basis, as evidenced from record, the credits have allowed and it has not been disputed by the Department any further. However, in the case of Rs. 3,44,228/-, the appellant could not produce sufficient documents to satisfy the Adjudicating Authority that the ex-depot sales were also in the nature of FOR or that they were essentially FOR sale. The documents being cited as evidence before this Bench to prove that sales were on FOR basis pertains to the month of April as pointed by the Learned AR and that also is not very categorical as to whether the sale was on FOR basis or otherwise. There is no other corroborative evidence that it is on FOR basis.
The Adjudicating Authority has gone through various case laws as well as evidence adduced by the appellant at para 22 and observed that the documents furnished by the assessee related to the clearance of final products directly through the factory to the buyers premises and that they have not produced any documents / information evidencing (i) the sale from Depot/Premises of Consignment Agent to the customer’s premises was on FOR destination basis, (ii) transfer of property at buyer’s premises and (iii) inclusion of the freight charges in the assessable value and payment of Excise duty on the said freight charges. Therefore, essentially, the Adjudicating Authority has held that the Assessee had clearly failed to determine place of removal with reference to the points of sale and therefore the credit taken at outward freight on transportation of finished goods were clearly beyond the place of removal in relation to sale ex-depot.
Extended period of limitation - HELD THAT:- The show cause notice has not adduced any substantive ground to invoke the ingredients required for invoking the extended period.
Conclusion - While on merit the demand is sustainable in the impugned order as the appellant have clearly failed to bring on record the evidence substantiating that sales were on FOR basis even in the case of ex-depot, however, as far as invocation of extended period is concerned, that it is not sustainable. Therefore, while on merit it is upheld, but on limitation, the demand is not sustained. Since, the entire demand is barred by limitation, the appeal to the extent of setting aside the demand and penalty by Adjudicating Authority is set aside on this count itself.
Appeal allowed.
-
2025 (3) TMI 1447
Denial of utilization of CENVAT Credit for payment of duty during the defaulted period in terms of Rule 8(3A) of Central Excise Rules, 2002 - levy of interest and penalty - HELD THAT:- Hon’ble High Court in [2024 (7) TMI 814 - CALCUTTA HIGH] has held that matter should be kept pending and is to be taken only after the Special Leave to Appeal No. 16523/2015 is decided by the Hon’ble Apex Court. However, during the course of hearing, it has been brought to the knowledge of the Bench that the Hon’ble Supreme Court has already disposed of the matter and the Department has already withdrawn the appeal.
The issue in the case of Indsur Global Ltd. has already been decided by the Hon’ble Supreme Court. In these circumstances, it is found that the issue is presently not pending before the Hon’ble Supreme Court. Thus, in our view, there is no bar in taking up the issue for a decision based on the available documents.
Considering the fact that the provisions of Rule 8(3A) of Central Excise Rules, 2002 have been declared ultra vires by the Hon’ble Gujarat High Court in the case of Indsur Global Ltd. and also by the Hon’ble Punjab and Haryana High Court in the case of Sandley Industries [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT], the CENVAT Credit cannot be denied to the appellant for utilization in payment of duty during the defaulted period. Thus, there is no infirmity in utilization of CENVAT Credit for payment of duty during the defaulted period.
Conclusion - Since the denial of utilisation of CENVAT Credit by invoking Rule 8(3A) of the Central Excise Rules, 2002 has been declared ultra vires by Courts, utilisation of CENVAT Credit during the impugned period by the appellant was not irregular. Accordingly, no amount can be demanded from the appellants either for using the CENVAT accruals of subsequent months or for using the CENVAT account for payment of duty during the said period for the alleged contravention of Rule 8(3A) of the Central Excise Rules, 2002.
The demand confirmed in the impugned order by denying the payment made by the appellant through CENVAT Credit is not sustainable and accordingly, the same is set aside - Since the demand raised against the appellant does not survive, the question of demanding interest or imposing penalty does not arise.
Appeal allowed.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
........
|
9911796707
