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Central Excise - Case Laws
Showing 121 to 140 of 81787 Records
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2025 (2) TMI 894
Violation of principles of natural justice - impugned order has been passed without properly appreciating the facts - denial of cross-examination of witnesses by the Adjudicating Authority - violation of Section 9D of the Central Excise Act, 1944 - HELD THAT:- The identical issue has been decided by the Hon’ble Punjab & Haryana High Court in the case of Jindal Drugs Pvt. Ltd. [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] as well as by this Tribunal in the case of M/s Lauls Ltd. [2023 (7) TMI 1113 - CESTAT CHANDIGARH] and M/s Tibrewala Industries (P) Limited [2023 (7) TMI 1112 - CESTAT CHANDIGARH] wherein it was held that the cross-examination of witnesses whose statements were relied upon by the Revenue to make out a case against the assessee has to be allowed and by following the ratio of the said decisions, the impugned order is not sustainable and therefore, the same is set aside and the cases remanded back to the Adjudicating Authority for a fresh decision after affording opportunity of cross-examination of the material witnesses and by following the procedure as prescribed in Section 9D of the Central Excise Act.
Conclusion - Both the appeals are allowed by way of remand to the Original Authority, who will comply with the requirement of Section 9D of the Central Excise Act by affording an opportunity of cross-examination and thereafter will pass a reasoned order in accordance with law.
Appeal allowed by way of remand.
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2025 (2) TMI 893
Irregular availment of CENVAT Credit - credit of inputs, input services and capital goods used in captive mine of the appellant, Bolani Mines has been correctly availed by the appellant at its Durgapur Steel Plant and correctly utilised in or in relation to manufacture of dutiable final products therein or not? - CENVAT Credit availed and utilised by the appellant against the ISD documents issued by the Bolani Mines was legal and valid - Bolani Mines can be termed as Input Service Distributor under Rule 2(l) of the CENVAT Credit Rules.
HELD THAT:- The issues involved is no more res integra, as this Tribunal has already decided these issues in favour of the appellant in their own cases, with respect to the companies located at other places and for different periods - The credit disallowed along with interest and the penalties imposed in the impugned order are not sustainable.
Conclusion - The distribution of credit by captive mines as ISD was in accordance with the law, and the credits disallowed in the impugned order were not sustainable.
The appeals filed by the appellants /SAIL are allowed.
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2025 (2) TMI 848
Wrongful availment of credit on GTA service - short payment of service tax under RCM on GTA - wrong utilization of higher education cess and secondary education cess of duty for payment of central excise duty - non-reversal of Cenvat Credit under the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - penalty imposed under Section 77 of the Finance Act, 1994 - extended period of limitation.
Invocation of extended period of limitation - HELD THAT:- In the present case, demand has been confirmed by invoking the extended period of limitation, whereas the Revenue has failed to establish any of the ingredients which is required to invoke the extended period to confirm the demand - it is found that in the show cause notice as well as in impugned order, the only ground stated for invoking the extended period is that had the audit not been conducted by the department, the Cenvat Credit wrongly availed would have gone unnoticed. There is no discussion whatsoever on the allegation of suppression of material facts with intent to evade payment of duty.
CENVAT Credit on outward transportation - HELD THAT:- This issue was under litigation and there were contrary judgments of various Courts and the issue was referred to the Larger Bench in the case of M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] and the Larger Bench of the Tribunal after considering all the judgments of the High Courts and Supreme Court and Circular dated 08.06.2018 issued by the Board, has held that admissibility of Cenvat Credit on GTA service is to be considered by the adjudicating authority on the basis of the facts produced before the said authority. When the issue in dispute is under the consideration of the Court and there are contrary decisions, it is a settled law that extended period cannot be invoked.
Conclusion - It has been consistently held by the Courts that in revenue neutral situation, the demand invoking extended period of limitation is not invokable as held in the case of Commr vs. Ultra Tech Cement Ltd [2018 (2) TMI 117 - SUPREME COURT], wherein it was held that when the issue is under litigation, extended period is not invokable and the penalty is not imposable.
The entire demand is barred by limitation - appeal allowed only on limitation without going into the merits of the other allegations.
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2025 (2) TMI 798
Refund claim of Excise Duty paid wrongly - alleged mistake in classification and payment - absence of a challenge to the assessment or self-assessment - maintainability of refund claims filed without challenging the initial assessment - HELD THAT:- The appellant has produced on record number of documents cited supra viz. copy of PLA for the months of July 1999 to December 1999 evidencing payment of Excise Duty for the clearance affected from 15.07.1999 to 31.12.1999, photocopies of TR-6 Challans No.71 dated 01.07.1999 to No.198 dated 13.12.1999 vide which the Excise Duty was originally deposited during July 1999 to December 1999, list of invoices issued during July 1999 to December 1999 showing clearance of above consignment of imported SKO - The appellant has also produced certificate of Chartered Accountant who certified on the basis of books of accounts of the appellants duly certifying total payment of duty on same SKO Customs Duty cargo.
In view of the plethora of judgments, the learned Commissioner (Appeals) has not considered the same and has come to the finding that the appellant has not been able to establish that double payment has been made. Once it has come on record that no Excise bonded SKO was pumped by any refinery during the year 1999 to 2000 in the pipeline which clearly shows that the Excise Duty paid by the appellant is by mistake which is liable to be refunded to the appellant. As regards the preliminary objections raised by the Revenue, it is to be noted that this Tribunal in the case of M/s Shree Balaji Warehouse etc. has held that refund of service tax is maintainable in the absence of any challenge to assessment or self-assessment.
As regards the preliminary objections raised by the Revenue, it is to be noted that this Tribunal in the case of M/s Shree Balaji Warehouse etc. [2023 (9) TMI 1478 - CESTAT CHANDIGARH (LB)] has held that refund of service tax is maintainable in the absence of any challenge to assessment or self-assessment. The said decision was followed by the Tribunal in the case of M/s Grand Prix Engineering Pvt. Ltd. [2023 (10) TMI 731 - CESTAT CHANDIGARH], which was a case of refund under the Excise Act and it was held that refund claim would be maintainable in the absence of any challenge to assessment or self-assessment in appeal.
Conclusion - i) Once it has come on record that no Excise bonded SKO was pumped by any refinery during the year 1999 to 2000, the excise duty paid was clearly a mistake. ii) Refund claims can be maintained without challenging the assessment if it is demonstrated that duties were paid erroneously. iii) Refund of the excise duty paid erroneously by the appellant is allowed.
The impugned order is not sustainable in law - Appeal allowed.
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2025 (2) TMI 741
Area Based Exemption - Denial of benefit of central excise duty exemption under N/N. 01/2011-CE dated 01.03.2011, as amended by Notification dated 17.03.2012 - Invocation of extended period of limitation - suppression of facts or not - whether the provisions of section 11A(4) of the Central Excise Act dealing with the invocation of the extended period of limitation could have been invoked? - HELD THAT:- In the present case, all that has been stated in the show cause notice regarding invocation of the extended period of limitation is that the appellant wrongly availed the benefit of the Exemption Notification deliberately with the sole intent to evade payment of central excise duty. The Commissioner also held that there was an intent to evade payment of central excise duty merely because the benefit of the Exemption Notification was wrongly availed - Mere wrong availment of an Exemption Notification would not lead to a conclusion that it was with an intent to evade payment of central excise duty unless the department is able to not only allege but substantiate that the said suppression was deliberate with an intent to evade payment of central excise duty.
The provisions of section 11A of the Central Excise Act, as it then stood, came up for interpretation before the Supreme Court in Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [1995 (3) TMI 100 - SUPREME COURT]. The Supreme Court observed that the proviso to section 11A empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of which is suppression of facts. It is in this context that the Supreme Court observed that the act must be deliberate to escape payment of duty.
In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [2003 (1) TMI 107 - SUPREME COURT] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation.
It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty. The show cause notice issued to the appellant, however, merely mentions that the appellant wrongly availed the benefit of the Exemption Notification with intent to evade payment of central excise duty. It does not elaborate why the appellant intended to evade payment of duty - in the absence of any intent by the appellant to evade payment of service, the extended period of limitation under section 11A(4) of the Central Excise Act could not have been invoked.
The contention of the appellant is also that it bona fide believed that it was entitled to avail the benefit of the Exemption Notification and it cannot be said that the belief of the appellant is mala fide merely because it may ultimately be held that the appellant is not entitled to the benefit of the Exemption Notification. This contention deserves to be accepted.
It also needs to be noticed that in the present case three Audits had been conducted. The first Audit was conducted in March 2016 for the period from April 2011 to March 2015. All the relevant facts were disclosed by the appellant and even otherwise the Audit Team could have required the appellant to provide all the information. No infirmity was found by the Audit Team and the Audit Team gave a Fair Audit Report to the appellant - The Department, therefore, cannot allege that the appellant had suppressed any facts. The show cause notice could have been issued within the normal period contemplated under section 11A(1) of the Central Excise Act but it was issued only on 26.06.2020.
The appellant had also been regularly filing the excise returns. The Commissioner observed that mere filing of the returns does not mean any kind of approval or validation by the department since in an era of self-assessment, the party has to correctly disclose the facts.
Conclusion - The extended period of the limitation could not have been invoked in the facts and circumstances of the case. The entire period covered under the show cause notice is for the extended period of limitation. The impugned order would, therefore, have to be set aside for the sole reason that the extended period of limitation contemplated under section 11A(4) of the Central Excise Act could not have been invoked.
The impugned order dated 30.09.2021 passed by the Commissioner is, accordingly, set aside and the appeal is allowed.
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2025 (2) TMI 740
CENVAT Credit - input service or not - service tax paid on payment of penalty on pre- payment of loan - Rules 2(l), 3 of the CENVAT Credit Rules, 2004 - HELD THAT:- On perusal of the impugned order, it transpires that the disputed service of foreclosure charges or pre-payment premium had been considered as not part of ‘banking and other financial service’ and thus the service tax paid thereon has been considered as not eligible for availing as CENVAT Credit. However, at one another place, the order states that the disputed service could be considered as ‘declared service’. Therefore, to the extent of such inconsistency with the other findings of the impugned order and inasmuch as this disputed issue had already been decided by the Larger Bench of the Tribunal, it is not found the impugned order as correct. Therefore, such findings, which do not find a bearing on the final decision ordered by the learned Commissioner (Appeals) in the impugned order are not taken up for examination.
On initial reading, it may appear that the pre-payment premium or foreclosure charges forms part of the financial arrangements of availing loan by the appellants from the banks. However, since there is no separate or distinct service being offered by such banks for taking the pre-payment premium, it would be correct to state that these are not related to the service of financing the loans, which the appellants have taken from these consortiums of banks. Rather, it is clear that those banks are compensating themselves for the loss of interest, which otherwise would have been paid by the appellants in the normal course of financing arrangement as per agreed contract, if the prepayment was not effected by the appellants. Hence, the factual matrix of the case clearly reflects that the prepayment premium paid by the appellants do not have any relation to the financing services availed from the banks.
This aspect of the financial arrangements have been discussed at length by Larger Bench of the Tribunal in the case of Commissioner of Service Tax, Chennai Vs. Repco Home Finance Ltd. [2020 (7) TMI 472 - CESTAT CHENNAI], wherein it has been held that service tax cannot be levied on the foreclosure charges levied by the banks and non-banking financial companies on premature termination of loans under the taxable category of “banking and other financial services” as defined under Section 65(12) of the Finance Act, 1994.
Conclusion - The disputed CENVAT credit taken on input services of ‘foreclosure charges’ or ‘pre- payment premium’ and availed by the appellants, is not admissible as CENVAT benefit to the appellants, inasmuch as there is no service tax payable on such services which could be considered as permissible credit in terms of Rule 3 of the CENVAT Credit Rules, 2004.
The appeal filed by the appellants is dismissed.
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2025 (2) TMI 679
Levy of Special Additional Excise Duty (SAED) and Additional Duty of Excise (AED) - goods cleared from the SEZ can be considered as goods manufactured within India for the purpose of tax and duties or not - HELD THAT:- The Tribunal committed no error in holding that the charge under the Principal Act, i.e., Section 3(1) of the Act, 1944 does not extend to goods manufactured in SEZ & consequently the Additional duties, i.e., SAED (Surcharge) & AED (Cess) also cannot extend to goods manufactured in SEZ.
The appeal fails and is hereby dismissed.
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2025 (2) TMI 678
Levy of penalty u/r 26(2) of the Central Excise Rules, 2002 - Clandestine removal - sale invoices supplied by the appellants without actual despatch/receipt of goods - HELD THAT:- The adjudged demands against the duty evasion having been confirmed against the main noticee SPPL, the issue in respect of duty evasion and consequent confirmation of demands in this case has become final. In this context, it is found that legal provisions under Rule 26(2) of Central Excise Rules, 2002 clearly provide that any person, who issues an excise duty invoice without delivery of the goods, on the basis of which the main noticee SPPL had taken ineligible CENVAT credit, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater. On careful reading of the documents on record, it is noticed that the appellants have admitted that they had issued the documents extending CENVAT credit to the manufacturer without supply of inputs, in a few cases.
Considering the overall duty evasion involved in the present case, the penalty imposed on the appellants in the present case is in accordance with the provisions of the Rule 26(2) ibid. The gravity of the offence involved in issue of such invoice or abetting, does not gets diluted as the adjudged demands against duty evasion has become final.
Conclusion - The penalty imposed on the appellants for issuing excise duty invoices without delivering goods was justified based on their admission and the gravity of the offense.
Appeal dismissed.
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2025 (2) TMI 677
Rejection of appeal as being time barred, ignoring the date of filing of the cross objections by the appellant in computing the limitation - whether the date of filing the cross objections (which is not the correct Form) has to be taken into account while considering the issue of limitation, in preferring the appeal before the Commissioner? - HELD THAT:- There is absolutely no difference in the prayers made either in the cross objections or in the appeal filed. Considering the decisions cited by the learned counsel for the appellant, the principle laid down is that it is only a procedural error, which can be rectified and does not warrant dismissal of the appeal. Secondly, in such cases, the limitation would relate back to the date when the original memorandum (though not in the correct form) was filed before the Commissioner (Appeals). The decision of the Single Member in CCE Vs. Nisha Chemicals, Bombay [1986 (4) TMI 172 - CEGAT, BOMBAY] has dealt with the appeal in Form-C.A.-3, which was not the valid form as it was meant for an appeal under Section 129A(1), whereas the appeal was filed under Section 129A(2) and it was observed that the forms are meant for helping the authorities in the disposal of the appeals and the applications and they cannot be interpreted to act as a hindrance to such disposals. In other words, the use of a non-prescribed form will not make the appeal invalid.
Apart from the decisions of the Tribunal, the learned counsel for the appellant has relied on the decision of the Madras High Court in Planet POP Foods Pvt. Ltd. Vs. AC, Customs [2017 (2) TMI 422 - MADRAS HIGH COURT] and the issue considered was whether to treat the representation made by the petitioner seeking withdrawal of the order-in-original as an appeal to assail the order-in-original. In the said case, the appellant was informed vide letter dated 21.04.2016 that an appeal could be preferred before the Commissioner of Customs and, therefore, the appellant preferred the appeal in the appropriate format on 15.12.2016, however, the appeal was dismissed, as being time barred. In the circumstances, the Court considered, whether the party aggrieved by the order-in-original has lodged its grievance before the appropriate forum within the prescribed time limit. The Court considering the representations sent by the petitioner found that they had sought withdrawal of the order i.e. the order-in-original and, therefore, the representation dated 27.04.2016 was within time, though not in the manner prescribed under the Rules. The Court categorically noted that this was more than an error which pertained to the form than the substance of the matter.
Conclusion - The cross objections filed by the appellant, though initially incorrect, were within the limitation period, and the rectified form related back to the original filing date. Therefore, the appeal was not time-barred.
Matter remanded back to the Commissioner (Appeals), to consider the appeal on merits in accordance with law. The appeal is, therefore, allowed by way of remand.
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2025 (2) TMI 676
Clandestine manufacture and removal - input-output ratio - demand alleging that for production of LABSA, the ratio is to be 1:1.475 whereas the appellant has shown 1:1.45 - suppression of facts or not.
Allegation made out on the basis of theoretical method - HELD THAT:- The allegation has been made out on the basis of theoretical method as stated by Shri K.S. Parasuram, but no chemical examination was done to know how much LAB is required to manufacture LABSA - In that circumstances, the said demand is not sustainable as held by this Tribunal in the case of Shree Durga Cables Pvt. Ltd. vs. Commissioner of Central Excise & Customs, Bhubaneswar-I, [2020 (1) TMI 542 - CESTAT KOLKATA], wherein the Tribunal has held 'In any case, since we have already noted hereinabove, that the whole basis of allegation of clandestine removal is the production pattern of other assessees, which has no legal or scientific basis, the impugned duty demand cannot be sustained.' - Demand not sustained.
Demand of Rs.19,36,934/- was sought to be confirmed against the appellant on the basis of suppression of batch charges for production - HELD THAT:- The mixed quantity required further operation for separation and temporarily stored in the dedicated storage tank and subsequently processing take place, the re-processed batch again placed in a separator like normal batches recovered LABSA and Spent Acid as per norms. The explanation given by the appellant has not been verified or has not been taken up at the time of investigation, same had to be done to know how the batch charge has taken placed then it will be clear. Without any concrete evidence the charge of clandestine removal on the basis of batch charges cannot be confirmed held by this Tribunal in the case of Commr. of Cus., C.E. & S.T., Ghaziabad vs. Auto Gollon Industries P.Ltd. [2018 (1) TMI 307 - ALLAHABAD HIGH COURT] - The adjudicating authority sought to allege clandestine removal on arithmetical calculation of the number of batches charges which is not sustainable under law. Accordingly, the demand of Rs.19,36,934/- is dropped.
Demand of Rs.14,03,998/- sought to be confirmed alleging suppression of production and clandestine removal as evidenced from computer print outs - HELD THAT:- The data in the computer print outs are nothing but movement chart of the respective hired tanker. On the basis of this, the Revenue sought to allege that there is clandestine removal of goods. The computer print outs as explained by the appellant have not been verified by the adjudicating authority from M/s. A.R. Stenchem (P) Ltd. also and it is only on the basis of these print outs, it is alleged that there is a clandestine manufacture and removal of goods. But the said computer print outs are not admissible evidence without following the provisions of Section 36B of the Central Excise Act, 1944, therefore, the said computer print outs cannot be relied upon - the demand of Rs.14,03,998/- is not sustainable, hence dropped.
Demand of Rs.1,93,90,293/- was sought to be confirmed on the basis of diary notes recovered from a diary seized during the course of investigation - HELD THAT:- As Revenue has failed to produce any corroborative evidence to allege clandestine removal of goods and same has been alleged only on the basis of diary notes made by their employee Shri Debasis Ghosh, therefore, the said demand is not sustainable in the eyes of law.
Demand of Rs.2,27,850.62 has been confirmed on account of clandestine removal of Spent Acid - HELD THAT:- The said allegation is made on the basis that Spent Acid is generated during the course of production of LABSA, therefore, appellant has suppressed the clearance of Spent Acid. The reply made by the appellant is that the said clearance of Spent Acid depends on production of LABSA and there is no evidence in the show cause notice to support the said allegation and there is no evidence in respect of disproportionate procurement of LAB/Sulphuric Acid illegally by the appellant and no corroborative evidence has been produced - As no such effort has been made by the Revenue and brought in any evidence in support of their allegation and the demand is raised on assumption and presumption only, therefore, demand of Rs.2,27,850.62 is not sustainable. Accordingly the same is set aside.
Cenvat credit of Rs.1,38,040/- was denied on irregular availment of credit on the goods on the basis of some invoices which were not received in their factory - HELD THAT:- The contention of the Ld.Counsel for the appellant is that the appellant has received the goods containing those invoices which has been used in the manufacture of the final product which ultimately suffered the duty. The said fact has not been denied by the Revenue, in that circumstances, the demand of Rs.1,38,040/- is also not sustainable for denial of Cenvat credit and dropped.
Demand on account of shortage of Acid Slurry of Rs.79,675.20 found on 22.11.2001 - HELD THAT:- The measurement of the said Acid Slurry was done only on eye estimation basis. No actual stock taking was taken, in that circumstances, the shortage cannot be alleged against the appellant on the basis of eye estimation, therefore, the said demand of Rs.79,675.20 is also not sustainable hence dropped.
Demand of Rs.3,27,046/- has been alleged as short payment of Central excise on account of sale through consignment agent, on the value at which the goods were sold from the consignment agent’s place - HELD THAT:- To find out how much is short payment on account of Central Excise duty on account of sale through consignment agent is required to be verified. For that purpose we remand the matter back to the adjudicating authority only to verify how much duty is payable by the appellant on account of sale through consignment agent. If the appellant has paid duty correctly of Rs.40,707/-, no demand is sustainable against the appellant - the case made against the appellant by the Revenue is only on the basis of assumption and presumption, therefore, in such cases without bringing any evidence on record of procurement of raw material from other sources demands are not sustainable.
Penalties - HELD THAT:- In the facts and circumstances of the case no penalty is imposable on the appellants. Accordingly, penalties imposed on the appellant and co-appellants are set aside.
Conclusion - i) Demands based on theoretical calculations without corroborative evidence are unsustainable. ii) Admissibility of evidence such as computer printouts requires compliance with statutory provisions. iii) Extended periods of limitation require evidence of deliberate withholding of information. iv) Penalties cannot be imposed without substantiated demands.
Appeal disposed off.
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2025 (2) TMI 624
Ineligibility for input services credited in terms of the CENVAT Credit Rules, 2004 - credit cannot be denied unless and until the assessment made by the dealer is revised the credit at the recipient’s end - sham transactions - it was held by High Court that 'The respondent filed invoices and returns before their jurisdictional offices and paid the service tax arising out of it. The Tribunal clearly held that even in the show-cause notice, there was no allegation that the services rendered under these invoices were not falling within the ambit of Rule 2(l) of the CCR 2004.'
HELD THAT:- There are no reason to interfere with the impugned order passed by the High Court - SLP dismissed.
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2025 (2) TMI 623
Imposition of penalty on the Petitioner in his capacity as a partner, under Rule 26 of the Central Excise Rules, 2002 read with Sections 142 and 174 of the Central Goods and Services Tax Act, 2017 - non-service of SCN - SCN was never addressed to the Petitioner and was never served - violation of principles of natural justice - HELD THAT:- It is found that indeed the Show Cause Notice has only been addressed to the said Firm and not to the Petitioner. If the Show Cause Notice proposed to impose any penalty on the Petitioner, it was incumbent upon the authorities to address the Show Cause Notice to the Petitioner and also serve it upon him. A notice of the personal hearing also ought to have been given to the Petitioner in his personal capacity. This has undisputedly not been done in the present case. This itself, without anything more, would make Order dated 2nd December, 2022 vulnerable and suspectable to challenge.
The Department challenging the Order of the CESTAT before the Hon’ble Supreme Court would make no difference to the outcome of the present Petition. As things stands today, the Show Cause Notice has been held to be time barred by the CESTAT. There is no stay of the said order. This is apart from the fact that as far as the present Petitioner is concerned, as noted above, there has been a complete breach of the principles of natural justice before passing the impugned order qua the Petitioner. Once this is the case, even assuming for the sake of argument that the Revenue were to succeed before the Hon’ble Supreme Court, the Order passed against the Petitioner herein still cannot be allowed to stand and would have to be set aside.
Conclusion - The imposition of a penalty on the petitioner without serving him the Show Cause Notice and breaching principles of natural justice was not valid.
Petition allowed.
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2025 (2) TMI 622
CENVAT credit - eligible credits or not - credit availed by the appellants on the services availed for demolition of chimneys decommissioned in the year 1990 - credit availed based on Input Service Distributor’s (ISD) invoices on services of transportation rendered by clearing and forwarding agents, the credit distributed in respect of M/s. Chettinad Logistics, Chennai and M/s. Image Public Relations P Ltd, New Delhi - Extended period of limitation - penalty.
Credit availed by the appellants on the services availed for demolition of chimneys decommissioned in the year 1990 - HELD THAT:- Rule 2(t) of Cenvat Credit Rules, 2004 provides that words and expressions used in these rules and not defined but defined in the Excise Act or the Finance Act shall have the meanings respectively assigned to them in those Acts. While factory is not defined in the Cenvat Credit Rules, 2004, it is seen that Section 2(e) of the Central Excise Act, 1944 defines “factory” means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on. Therefore, on an evaluation of the aforesaid statutory provisions and the definition of factory, which means any premises and includes precincts thereof, wherein or in any part of which excisable goods are manufactured or any manufacturing process connected with the production of these goods is being carried on, the chimneys, even though they were decommissioned in 1990, continue to be on the premises or precincts wherein or in any part of which the appellant’s activity of manufacture is being carried out - the adjudicating authority erred in denying the cenvat credit on the demolition services used by the appellant for demolition of the decommissioned chimneys.
Credit availed based on Input Service Distributor’s (ISD) invoices, on services of transportation rendered by clearing and forwarding agents - HELD THAT:- The findings of the adjudicating authority, namely, that the ISD credit distributed in respect of M/s. Image Public Relations P Ltd, not agreed upon and it do not have integral connection with the appellant’s manufacture of final products. The appellant had contended that the services were used by the appellant for their advertisement during IPL. The definition of input services as reproduced supra includes advertisement or sales promotion and therefore the appellants are entitled to the credit availed on the services rendered by M/s. Image Public Relations P Ltd.
Extended period of limitation - penalty - HELD THAT:- There are no positive act that would qualify as any of the ingredients required to invoke the extended period of limitation, has been evidenced as committed by the appellant. Therefore, invocation of extended period of limitation and imposition of penalty on this count is also unsustainable.
Conclusion - i) The demolition services were directly related to manufacturing operations and thus eligible for CENVAT credit. ii) The denial of cenvat credit taken by the appellant, on Clearing and forwarding agent services based on ISD invoices issued by depots at Chennai and Cochin, is not tenable in law.
Appeal allowed.
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2025 (2) TMI 621
Valuation of Excise duty - inclusion of cost of specifications provided by the manufacturer in the assessable value of the final products manufactured by the appellant and cleared to the manufacturer - HELD THAT:- The issue raised in the case of Denso India Pvt Ltd. [2024 (3) TMI 686 - CESTAT NEW DELHI] was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the said issue, the Principal Bench considered the provisions of section 4 of the Central Excise Act, 1944 [The Act] and Rule 6 of the Valuation Rules and observed that anything which is supplied by the buyers to the manufacture before even identifying the potential seller/ manufacturer cannot be treated as additional consideration for sale. It was, therefore, held that something can be treated as an additional consideration for sale of goods only when there exists a contract of sale or an agreement to sale between two parties and in terms thereof the buyer pays something over and above the price agreed. In other words anything which is supplied by the buyer to the manufacturer even before identifying the potential manufacturer can never be treated as an additional consideration for sale. The Tribunal, therefore, concluded that the drawing and designs supplied by MSIL at the time of identification and short listing of potential vendors for supply of parts and components, the provisions of section 4 1(b) of the Act read with Rule 6 of the Valuation Rules, could not have been invoked as no consideration was received by the vendors from MSIL.
Conclusion - The specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti.
The impugned order deserves to be set aside and the appeals are, accordingly allowed.
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2025 (2) TMI 620
CENVAT Credit - inputs and capital goods - admissibility of credit prior to the introduction of CGST Act on 01.07.2017 - HELD THAT:- With the introduction of CGST Act, the Excise Act ceased to apply to majority of the manufacturers, including the respondent. A provision has been made under the CGST Act to transition the Cenvat credit available in records as ITC under the CGST. The respondent had transitioned Cenvat credit of Rs. 4,64,70,985/- as input tax credit under the CGST. There is also a provision for taking input tax credit of duty paid on the goods received in the months of April, May, June 2017. In other words all the credit, which was lying in balance in the books of accounts as Cenvat credit or Cenvat credit which the respondent could have availed but for the introduction of CGST Act, could be transitioned ITC under CGST.
There is no dispute that the entire disputed Cenvat credit was admissible to the respondent as it is not the case of the Revenue that the credit was not admissible. The only case of the Revenue is that excise duty paid on input and capital goods received after 01.07.2017 could have been availed as input tax credit by entering in Table 7 (b) of TRAN-1, but the respondent wrongly took it as Cenvat credit in its excise return ER-1 for the month of June and then transitioned it by entering in Table 5 (a) of TRAN-1. Apart from this allegation that it was entered in its excise returns of the respondent for June 2017 and was entered in Table 5 (a) of the TRAN-1 instead of Table 7(b), it is not the case of the department that the respondent was not entitled to Cenvat credit and convert it into input tax credit.
Conclusion - The disputed Cenvat credit was admissible to the respondent, and the procedural lapse did not warrant the recovery of the credit, interest, or penalties.
The impugned order is upheld and the appeal is dismissed.
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2025 (2) TMI 619
Abatement of appeal - Recovery of CENVAT Credit - process amounting to manufacture or not - process of culling HR/CR Coils of iron or non-alloys steel into sheets or slitting into strips of lesser width or slitting of sheets into strips - HELD THAT:- It is found that during the pendency of this appeal before this Tribunal, one operational creditor M/s S.K. Unit Print Pvt Ltd filed an application under Section 9 of IBC, 2016 before the NCLT in order to initiate CIRP against the Corporate Debtor i.e. appellant in this case, which culminated into liquidation proceedings vide order dated 31.03.2023 passed by the NCLT, Chandigarh. It is also noted that Shri Sanjay Kumar Dewani was appointed as the liquidator who after following the due process as prescribed under Liquidation Process Regulations, 2016 and realized all the assets of the Corporate Debtor and distributed the same amongst the stakeholders in accordance with the said Regulations as mentioned in the order passed by the NCLT, Chandigarh.
As the appellant has been finally liquidated by the NCLT vide its order dated 04.06.2024, therefore, in view of the Rule 22 of the CESTAT (Procedure) Rules, 1982, the present proceedings against the appellant cannot continue.
Conclusion - The appeal abated due to the dissolution of the appellant by the NCLT, in accordance with Rule 22 of the CESTAT (Procedure) Rules, 1982.
The present appeal abates and is, accordingly, disposed of.
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2025 (2) TMI 589
Valuation of goods cleared by the appellant - related persons under Section 4(3)(b) of the Central Excise Act, 1944 - Applicability of Rule 9 read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - it was held by Tribunal that the party i.e. M/s Denso India Ltd. & Ms Maruti Udyog Ltd. are inter-connected undertakings and have mutual business interest and therefore, they qualify as 'related parties'/ related person under Section 4(3)(b) of the Central Excises and Salt Act, 1944.
HELD THAT:- There are no reason to interfere with the impugned order dated 05-08-2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, Allahabad.
Appeal dismissed.
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2025 (2) TMI 588
CENVAT Credit - input service - advertisement services, tour operator services used for consignment agents and installation/dismantling of machinery at Haridwar Unit of the appellant - Tour Operator Service - duty paying invoices - invoices not in the name of the assessee - extended period of limitation - penalty.
Services in terms of the inclusive part of the definition of “input service” under Rule 2(l) - HELD THAT:- The appellant was manufacturing at their Bhiwadi Unit LED TV, Condenser Coils, Evaporatire Coils and Air Conditioners for Railways only whereas CENVAT Credit of Rs.73,56,722/- was availed in respect of service tax paid for advertising of the air conditioners meant for domestic purpose, which were manufactured at another unit of the appellant. That CENVAT Credit of service tax paid on advertisement service can be availed only in terms of Rule 2(l) of CCR - There is no co-relation of the input services received and consumed in the unit at Bhiwadi. The appellant failed to discharge the burden that the input service taken and utilised was related to manufacture, clearance and sale of the final products manufactured by them - The appellant is not entitled to the CENVAT Credit on account of advertisement services relating to the Air Conditioners for domestic purpose which were manufactured at another unit of the appellant.
Tour Operator Service - Input services or not - consignment agents were carrying out the function of sales promotion for the appellant as they were entrusted with the responsibility of interacting with the buyers, arranging sale of the goods to the buyers and also for pitching further sales to buyers - HELD THAT:- These services do not fall within the definition of “input service” as it has no relation to manufacture of their finished goods manufactured by the Bhiwadi unit in as much as these services have been utilised at their other unit at Haridwar. Moreover, as noted by the Adjudicating Authority, the services of execution of contract, construction services and service of foundation or making of structure for support of capital goods as well as ‘tour operator service‘ have been mentioned under the exclusion clause of the definition of “input service” definition. Hence, the appellant is not entitled to avail the CENVAT Credit on the said amount.
Credit of service tax taken in respect of invoices, which are not in the name of the assessee - HELD THAT:- To be a valid document in terms of Rule 9(2), it is necessary that the document contains all particulars as mentioned therein to avail the credit. The name of the consignee or service receiver on the invoice is the basic requirement for availing the CENVAT Credit. Considering the facts of the present case, it is undisputed that the invoices were not in the name of the appellant and therefore, cannot be said to be valid documents as per Rule 9(2). The appellant was, therefore, not eligible to avail the CENVAT Credit on the basis of the invoices which were not in their name.
Extended period of limitation - penalty - appellant had already reversed the credit before the issuance of the show cause notice - HELD THAT:- The appellant has wrongly availed and utilised the credit amounting to Rs.80,95,227/- on in-eligible input services by suppressing material facts with intent to evade payment of duty and have also contravened the provisions of Rule 2 and 3 of CCR, hence the said amount is recoverable and the appellant has rightly debited the said wrongly availed credit which has to be approspriated to the Government Account. Under the circumstances, the appellant is also liable to penal action under the provisions of Rule 15(2) of CCR read with section 11 AC (1)(c)of the Act.
Conclusion - i) The appellant is not entitled to the CENVAT Credit on account of advertisement services relating to the Air Conditioners for domestic purpose which were manufactured at another unit of the appellant. ii) The services of execution of contract, construction services and service of foundation or making of structure for support of capital goods as well as ‘tour operator service‘ have been mentioned under the exclusion clause of the definition of “input service” definition. Hence, the appellant is not entitled to avail the CENVAT Credit on the said amount. iii) The invoices were not in the name of the appellant and therefore, cannot be said to be valid documents as per Rule 9(2). The appellant was, therefore, not eligible to avail the CENVAT Credit on the basis of the invoices which were not in their name. iv) Extended period of limitation and penalties also invoked.
There are no infirmity in the impugned order and the same is hereby affirmed. The appeal is, accordingly dismissed.
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2025 (2) TMI 555
Denial of CENVAT Credit - input services - Goods Transport by Road (Freight Inward) - Manpower Recruitment or Supply Agency service - Business Support Service - recovery with interest and penalty - HELD THAT:- It is observed that the appellant has reversed the credit involved on the exempted products and have also paid the interest due. The fact that the excess availed is only Rs 4,03,509/- has not been contested by the Ld. Original Authority. He however felt that the proper procedure had not been followed and demanded the amount payable in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004.
The whole issue is procedural in nature and while the appellant was required to follow the prescribed procedure, no act of deliberate deception with the design of securing an unfair advantage has been made out. This being so and considering that demand is disproportionately higher than the advantage if any gained by the appellant and which has subsequently been reversed along with interest, the ends of justice would be met by confirming the credit reversed along with interest already paid and the dispute brought to a close. No purpose would be served in pursuing this low tax amount now that the Finance Act 1994, itself has been repealed.
Conclusion - While acknowledging procedural lapses, there are no deliberate deception by the appellant to gain an unfair advantage. In the peculiar facts and circumstances of the case, consideration of justice and expediency requires that the impugned order be set aside and the credit reversed and interest already paid by the appellant be confirmed.
Appeal disposed off.
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2025 (2) TMI 554
Clubbing of clearances for excise duty purposes - clearance of M/s Macons Engineers are required to be clubbed with the clearances of M/s Maxocrete Equipments (M/s Macons Equipments) or not - M/s Macons Engineers was a dummy unit - HELD THAT:- The unit of M/s Macons Engineers was considered as a dummy unit by the Central Excise authorities and therefore the documented clearances of M/s. Mecons Engineers cleared from the premises 37-C/A were considered to be that of Ms/ Maxocrete Equipments i.e. the present appellant.
The appellants in the instant case has sought to rely on the various case laws as cited above (para 3.1 of this order refers) in their submissions that the show cause notice if not issued to alleged dummy unit, all proceedings initiated against the principal unit would be vitiated. The above said proposition is a question of trite law emanating from above cited rulings which can be raised at any time. Therefore, the Learned Commissioner (Appeals) has clearly erred in denying them the benefit of legal proportion as indicated by appellants which mostly developed later. As things stand today, it is fairly well settled that the show cause notice is required to be issued both to Principal unit as well as alleged dummy unit. Same having been done by the department, the case against principal unit cannot stand.
The violation of GIDC agreement, if at all exists is a matter between GIDC and the appellants. Apart from, the above proposition additionally the overwhelming evidence indicates that M/s Macons Engineers was a unit in existence duly documented by various agencies and statement under Section 14 if any to the contrary cannot be given precedence over such documentary evidence.
Conclusion - i) The proceedings against a principal unit cannot stand without issuing a Show-cause Notice to the alleged dummy unit. ii) The documentary evidence presented by M/s Maxocrete Equipments sufficiently established the separate existence of M/s Macons Engineers, thereby nullifying the department's allegations.
Te order of Commissioner (Appeals) is set aside and appeal is allowed.
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