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Central Excise - Case Laws
Showing 141 to 160 of 81787 Records
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2025 (2) TMI 553
Interest on refund of amount deposited during investigation - relevant date for calculation of interest - removal of Coumarin without payment of duty - whether interest is payable to the appellants in respect of voluntary payments/deposit made towards alleged removal Coumarin without payment of duty from 19th May, 2001 to 24th January, 2004, or otherwise? - HELD THAT:- The final demand confirmed by the Tribunal is limited to the adjudged demands in respect of seized goods alone and the issues have attained finality. These have been duly taken into account by the original authority in his order dated 01.04.2019 and he had accordingly sanctioned the refund of Rs.19,47,750/- and ordered for the said amount to be remitted separately by RTGS/NEFT to the appellant. Thus, the amount of refund has been sanctioned as per law by the original authority and the same bas been duly confirmed by the first appellate authority also.
As regards the appellant’s claim of interest, it is found that the issue with regard to payment of interest on voluntary deposit made during investigation has been examined by the co-ordinate Bench of the Tribunal in the similar set of facts in the case of Parle Agro Private Limited [2017 (2) TMI 984 - CESTAT ALLAHABAD] and it was held that interest is payable from the date of deposit till the date of payment.
The Central Board of Excise and Customs (CBE&C) has also issued instructions to the departmental field formations vide Circular No. 984/8/2014-CX dated 16.09.2014, wherein it has been clarified that the appellant is entitled for interest on refund of pre-deposit from the date of deposit to the date of refund.
In the case of Pace Marketing Specialties [2011 (8) TMI 796 - ALLAHABAD HIGH COURT], the Hon’ble High Court of Allahabad upon consideration of the judgement of the Hon’ble Supreme Court in the case of Sandvik Asia Limited [2006 (1) TMI 55 - SUPREME COURT] had granted interest at the rate of 12% in similar case. In view of the specific stand taken by the co-ordinate Bench of the Tribunal in the case of Parle Agro Pvt. Ltd., this Bench cannot take a different view contradicting the stand already taken therein.
Conclusion - The appellant is entitled to interest on the refund of the pre-deposit amount at the rate of 12% per annum.
Appeal allowed.
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2025 (2) TMI 552
Short payment of duty - clearances to related persons were to be assessed under Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rule, 2000 (CEVR) or in terms of Section 4(1) of the Act read with Rule of CEVR - Mutuality of ineterst - Penalty under Section 11AC - HELD THAT:- The Appellant is a Private Limited Company with 2 directors, who are siblings, holding together 99% shares of the company. The Appellant is reportedly effecting most of the clearances to M/s. Harris and Menuk, their main Distributor in which the parents of the 2 directors of the Appellant Company are the Partners. The Appellant and the distributor are related and therefore fall within the ambit of Section 4(3)(b). In terms of Section 4(3)(b) of the Central Excise Act, 1944, it is obvious that both the appellant company and the distributor partnership firm are relatives, and they are so associated with each other, they have interest directly or indirectly in the business of each other. Audit verification has revealed that the price adopted to the distributor was much less than the price adopted at which these goods were sold to ultimate Customers. The pricing pattern itself reveals the mutuality of interest as the Appellant was benefited by reduced tax outflow and benefit to the distributor company was by way of reduction in cost of purchase and payment resulting in the distributor seeking increased supply of goods from the appellant, thus resulting in mutual benefit.
The Appellant in their reply to Show Cause Notice or in the Grounds of Appeal have never contested the fact that there did exist a different and depressed price for the sales made by the appellant to their parent’s distributorship firm and further they have not disputed the differential duty arising out of such undervalued sales which stood paid up. Such payment of short paid duty according to the price difference as suo motu assessed and computed by them itself evidences the differential pricing and the extent of duty evasion.
The transaction value on which the duty is required to be paid is the value of the goods at which the distributor has sold the goods. The Appellant Company and the distributor firm are related persons and the clearances have to be valued in terms of Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. As such, there are no reasons to interfere with the impugned Order-in-Appeal.
Demand of interest - HELD THAT:- Evidently the duty incidence has been passed on to the end customer. It is only after six months from commencement of differential duty payment by appellant, and a month after payment of the final installment of differential duty due upto October 2014 in March 2014, that in May 2014, the SCN came to be issued. The appellant is liable to pay interest on the differential duty suo moto paid by the appellant. Since the duty paid without protest to the exchequer is already merged with the consolidated fund of India, any exercise in appropriation is a mere superfluity.
Penalty under Section 11AC - HELD THAT:- While the Ld. Commissioner (Appeals) has set aside the impugned Original-in-Original of the Adjudicating Authority, he has not rendered any finding or discussed about the penalty proposed. The Department too has not filed any cross objection against the non-imposition of penalty. It is a settled principle in law that the appellant cannot be put in an worse off position upon the appellant’s preferring of the appeal.
Conclusion - i) The transaction value on which the duty is required to be paid is the value of the goods at which the distributor has sold the goods. The Appellant Company and the distributor firm are related persons and the clearances have to be valued in terms of Rule 9 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. ii) The appellant is liable to pay interest on the differential duty suo moto paid by the appellant. iii) The Department too has not filed any cross objection against the non-imposition of penalty. It is a settled principle in law that the appellant cannot be put in an worse off position upon the appellant’s preferring of the appeal.
Appeal rejected.
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2025 (2) TMI 551
Cenvat Credit - services related to setting up and expansion of the factory building under the Cenvat Credit Rules, 2004 - outdoor catering services provided to employees under the statutory obligation of the Factories Act, 1948 - insurance services for factory buildings and employees - air travel agent services used for international travel of expatriate employees in relation to business activities.
Whether the appellant is eligible to Cenvat Credit on these impugned services up to 31.03.2011 under the un-amended definition of ‘input services’ as provided in Rule 2(l) of Cenvat Credit Rules? - HELD THAT:- Cenvat Credit on construction of the factory building has been denied only on account of lack of nexus between the construction services and the manufacturing of the goods. In this regard, it is to be noted that the construction relates to the setting up of the factory which in turn, is directly used for manufacturing and is directly covers under the inclusive part of the definition of ‘input service’. Moreover, during the relevant period, construction service was included in the definition of ‘input service’ and it is only after 01.04.2011 that it has been specifically excluded from it.
Reference made to the decision of the Hon’ble Punjab & Haryana High Court in the case of CCE vs. Bellsonica Auto Components India P Ltd [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT], wherein the Hon’ble Punjab & Haryana High Court has held 'The Tribunal rightly did not agree with the Commissioner’s findings that the services in question had been used for brining into existence an immovable property and not for the manufacture of the final product. The said services cannot be said to be remotely connected to the final product as observed by the Commissioner.'
Outdoor catering service for the employees - HELD THAT:- This service is also covered under the definition of ‘input service’ prior to 01.04.2011 because the outdoor catering service is an activity relating to appellant’s business and hence, is included in ‘means’ clause of Rule 2(l) and moreover, under the Factories Act, 1948 also, it is a statutory obligation. Further, as regards reversal of recovered amount by the appellant, the appellant is liable to pay interest on that portion, which will be calculated by the original authority and the appellant would be liable to pay the same.
Cenvat Credit on insurance services - HELD THAT:- The learned Commissioner has allowed 50% of the Cenvat Credit availed in relation to insurance of the building, but has denied the Cenvat Credit on insurance of the employees amounting to Rs.1,21,261/-. The insurance policies procured for group health insurance of the employees, are also included in ‘means’ clause of Rule 2(l) as the health insurance of the employees is an activity relating to business and it has been held in the cases relied upon by the learned Consultant for the appellant that this activity is an ‘input service’.
Cenvat Credit on air travel agent service - HELD THAT:- The said service was used for international travel of expats for visiting their home country as well as for purchasing plants & machineries, tools & dies and attending technical training at Japan office of the appellant which is used in relation to manufacture of final product. During the relevant time, Rule 2(l) of the Cenvat Credit Rules explicitly covers input services used by the manufacturer directly or indirectly in relation to manufacture or clearance of final products as held in the cases relied upon by the learned Consultant for the appellant.
Conclusion - The services directly or indirectly related to manufacturing activities or statutory business obligations qualify as input services under the Cenvat Credit Rules.
Appeal allowed.
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2025 (2) TMI 518
Refund/Rebate claim - denial of refund on the ground that appellants exported goods u/r 19 of Central Excise Rules, 2002 under Bond, since the finished product is chargeable to NIL rate of duty for export, CENVAT credit is not admissible in terms of Rule 6(6)(vi) of CENVAT Credit Rules, 2004 - HELD THAT:- The issue is squarely covered by the judgment in the case of M/s Repro India Ltd. [2007 (12) TMI 209 - BOMBAY HIGH COURT] and M/s Drish Shoes Ltd. [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT], wherein it was held that CENVAT credit is admissible even if the raw material is utilized in the manufacture and export of exempted goods.
Hon’ble Apex Court in COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VERSUS M/S DRISH SHOES LTD. [2016 (7) TMI 1415 - SC ORDER] the judgment of Hon’ble High Court of Himachal Pradesh in the case of M/s Drish Shoes. The principle adopted by the Hon’ble Courts was that goods are to be exported and not the taxes. Learned Authorized Representative for the appellant-Revenue submits that, learned Commissioner should not have relied upon M/s Drish Shoes Ltd. as the SLP filed by the Revenue against the order of the Hon’ble High Court was pending before the Hon’ble Apex Court. Hon’ble Apex Court did not stay the operation of the Hon’ble High Court’s order and therefore to that extent, there is no infirmity in the order passed by the learned Commissioner.
Conclusion - CENVAT credit is admissible even if the raw material is utilized in the manufacture and export of exempted goods. The refund is allowed.
The appeal filed by the Revenue is dismissed.
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2025 (2) TMI 517
Reversal of CENVAT Credit - fraudulent availment of CENVAT credit - lapse of credit in terms of provisions of Rule11(3) of the CC Rules - HELD THAT:- In terms of Rule 11(3) of CENVAT Credit Rules, 2004, the credit lying with the assessee as on the date on which the final products have been declared exempt shall lapse.
The records of the case do not reveal whether the balance that is sought to be held to have lapsed as on 01.03.2010 was after the reversal made in terms of the OIO dated 22.04.2013 or otherwise. It is also not clear as to how the impugned order holds that the amount of Rs.1,09,76,108/- was reversed. The Show Cause Notice dated 06.04.2011 was about fraudulent availment of CENVAT credit and in case the appellant has reversed the demand confirmed vide Order dated 22.04.2013, it is not understood as to how the credit of Rs.1,54,84,494/- is available as on 27.10.2010 i.e. as on the date of issue of Notification No. 10/2010 dated 27.02.2010.
Both the impugned Show Cause Notice dated 27.08.2012 and the other Show Cause Notice dated 06.04.2011 have been issued well beyond 01.03.2010. Revenue, in fact, had an opportunity to take up both issues in a single Show Cause Notice. Revenue instead of taking a holistic view has confounded the issue further by issuing multiple Show Cause Notices giving rise to the confusion.
Conclusion - It is necessary in the interest of justice that the issue, as far as the allowing of adjustment/ reversal of CENVAT credit of Rs.1,09,76,108/- is concerned, should travel back to the Original Authority to verify as to whether the respondents have reversed the above credit in terms of the Orderin- Original dated 22.04.2013 and if so, what was the actual balance lying in credit as on the date of Notification i.e 27.02.2010. Such credit actually lying in balance as on 01.03.2010 shall lapse.
Appeal allowed by way of remand.
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2025 (2) TMI 516
CENVAT credit on certain items purchased by them and exported - interpretation and application of Rule 2(k) of the CENVAT Credit Rules, 2004, and Rule 16 regarding the definition of "input" - HELD THAT:- The unmissable reading of the Rule 2(k) is that the any item to be qualified as an input for the CENVAT Credit Rules should be used in or in relation to the manufacture. It is not the case of the respondent that the items in question are used in the factory for manufacture. They are purchased by the respondents and exported.
It is not the case of the respondents that the items impugned should be treated as bought-out items and the value of the same thereof has been included in the assessable value of goods either exported or cleared in the domestic market. From the facts of the case, it appears that the respondents have simply procured the goods, brought to the factory and exported these goods along with their manufactured products. For this reason, the credit is not admissible to the respondents. The respondents could have claimed rebate of excise duties paid on these items instead of availing CENVAT credit on the same, though they are not used in or in relation to the manufacture of the goods exported by them. However, the same is not the subject matter of the impugned case.
Conclusion - From the facts of the case, it appears that the respondents have simply procured the goods, brought to the factory and exported these goods along with their manufactured products. For this reason, the credit is not admissible to the respondents.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 515
CENVAT Credit on the input service - banking charges/commission paid in relation to obtaining bank guarantee related to VAT refund in respect of purchase of raw material, being set off of the sales tax on account of such final products being exported abroad - extended period of limitation - penalty - HELD THAT:- It is an undisputed fact of the case that applicable service tax has been paid on the input services and the Department had no objection for the payment of such service tax, by the input service provider i.e. Bank. There is also no dispute that the appellants are eligible to avail CENVAT Credit of such service tax. The dispute therefore remains to be examined is for consideration of the fact that whether the disputed services are used in or in relation to the manufacture of final products as provided under clause (ii) of the definition of ‘input service’ under Rule 2(l) ibid. The services which are in dispute are banking commission/charges.
Prima facie, when the service tax has been duly paid on the input services which are in relation to the VAT setoff on raw materials used for manufacture of final products, then taking of CENVAT Credit cannot be objected to inasmuch as Rule 3 of CENVAT Credit Rules, 2004 specifically state that a provider of output service to avail such credit of tax paid on input service. The setoff of VAT arising on account of final products being exported does not nullify that the raw materials have been used in manufacture of final products. When these raw materials have been used as inputs, the attendant services of obtaining bank guarantee for claiming VAT refund eligible on account of raw materials having been used for manufacture of final products had arisen, and this does not bring any new ground for making the input service tax as ineligible for taking CENVAT credit.
The bank charges/commission paid for obtaining bank guarantee is in connection with raw materials purchased which are used for manufacture of final products. Thus, to this extent, such input services availed by the appellants satisfies the first ‘means’ part of the definition of ‘input service’ as per Rule 2(l) ibid. Further, the second ‘inclusion’ part of the definition also specifically provide for services used in relation to ‘procurement of inputs, legal services, financing, accounting, sales promotion, outward transportation upto the place of removal etc.’ for being covered in the ‘inclusion’ part of the definition - Inasmuch as the disputed input services as above are covered under the ‘means’ and ‘inclusion’ part of the definition of ‘input service’ under Rule 2(l) ibid and are not covered by ‘exclusion’ part of the definition, it is found that there is no legal basis for denial of CENVAT Credit on these services.
The grounds for rejection of CENVAT Credit on input services in the order of the adjudicating authority which was upheld by the learned Commissioner (Appeals) is that the input services have not been specifically used by the appellants in or in relation to the manufacture of final products. From the facts of the present case, it clearly transpires that all services that are having a relation with raw materials have been used, either directly or indirectly in manufacture of final products, and only upon such final products having been exported, the VAT setoff was given, and therefore the bank commission/charges for obtaining bank guarantee is with respect to such usage of raw materials in the final products and not per se directly relating to its exports - the grounds on which the input service credit was disallowed in the original order, which was upheld by the impugned order, have no legal basis and accordingly the impugned order is liable to be dismissed as being not legally sustainable.
Extended period of limitation - penalty - HELD THAT:- There are no recording of any findings on other submissions made by both sides, in respect of invocation of extended period and imposition of penalty. Further, as rightly held in a number of decisions by the higher judicial forum, in respect of issues concerning interpretation of law, extended period of limitation cannot be invoked and penalty for evasion or for violation of law cannot be imposed. Therefore, in the present case, the adjudged demands having been held as not sustainable on merits, the imposition of penalty against the appellants by invoking extended period of demand is also not legally sustainable.
Conclusion - The services indirectly related to the manufacturing process, such as those facilitating VAT refunds on raw materials, qualify as 'input services' under the CENVAT Credit Rules.
The impugned order dated 03.12.2020 is set aside - Appeal allowed.
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2025 (2) TMI 514
Valuation of Excise duty - specifications, drawings and designs supplied by Maruti to the appellant when sending requests for quotations (RFQ) - ‘additional consideration for sale‘ of the goods or not - HELD THAT:- It is undisputed that if they form ‘additional consideration for sale‘, then their value must be included in the assessable value as per section 4(1) (b) of the Central Excise Act,1944 [Excise Act] and Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [Valuation Rules] and if they do not form ‘additional consideration for sale‘, then they cannot be included and the assessable value will be the transaction value itself as per section 4(1) (a) of the Excise Act.
The question which arises is as to what is ‘consideration‘ and this term is not defined either in the Excise Act or in the Sale of Goods Act but is defined in the Indian Contract Act, 1872 [Contract Act] the Act which covers all types of contracts including those of sale. Since every transaction of sale or purchase, is also a contract- whether explicit or implicit- it is appropriate to examine the term ‘consideration‘ under the Contract Act in the absence of any other definition of this term under the Sale of Goods Act or the Excise Act. Section 3 of the Sale of Goods Act makes it explicit that the provisions of the Contract Act would apply to sales.
For something to be ‘consideration‘, it must be ‘something done‘ or ‘something abstained from doing‘ at the desire of the promisor. This something could be done or abstained from doing either by the promise himself or by someone else but it must be at the desire of the promisor - It also needs to be noted that consideration could be in cash or some other valuable or simply something done or abstained from doing under the Contract Act but under Sale of Goods Act, only price can be the consideration. Under the Central Excise Act, consideration has to be for ‘cash, deferred payment or some other valuable consideration”.
For something to be an additional consideration for sale as per Section 4(1) (b) of the Central Excise Act and Rule 6 of the Valuation Rules, it has to be 'consideration' in the first place which, as defined under the Indian Contract Act, has to flow to the promisor from the promisee or anyone else at the desire of the promisor. Before the proposal of the appellant and its acceptance by Maruti, there was no promise, no promisor and no promisee. The specifications or drawings and designs supplied while inviting bids- regardless of its value- cannot be called 'consideration' but can only be called articulation of the needs of Maruti. They were also not provided at the desire of the promisor(the appellant) but by Maruti (the promisee) on its own accord to elicit proposals (quotations).
In Denso India Private Limited vs. Additional Director General (Adjudication) [2024 (3) TMI 686 - CESTAT NEW DELHI], the Tribunal decided in favor of the appellants on an identical issue, concluding that the notional cost of drawings and designs supplied free of cost by Maruti to the vendors cannot be included in the assessable value for central excise duty purposes.
Conclusion - The specifications, drawings, and designs provided by Maruti to the appellant do not constitute additional consideration for sale under the Central Excise Act and Valuation Rules.
The impugned order cannot be sustained - Appeal allowed.
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2025 (2) TMI 478
Valuation of Excise duty - inclusion of notional cost of the drawings and designs provided by Maruti to the appellant in the assessable value - additional consideration for sale or not - HELD THAT:- It is undisputed that if they form ‘additional consideration for sale‘, then their value must be included in the assessable value as per section 4(1) (b) of the Central Excise Act,1944 [Excise Act] and Rule 6 of the Central Excise Valuation (Determinationof Price of Excisable Goods) Rules, 2000 [Valuation Rules] and if they do not form ‘additional consideration for sale‘, then they cannot be included and the assessable value will be the transaction value itself as per section 4(1) (a) of the Excise Act.
For something to be ‘consideration‘, it must be ‘something done‘ or ‘something abstained from doing‘ at the desire of the promisor. This something could be done or abstained from doing either by the promisee himself or by someone else but it must be at the desire of the promisor - the consideration could be in cash or some other valuable or simply something done or abstained from doing under the Contract Act but under Sale of Goods Act, only price can be the consideration. Under the Central Excise Act,consideration has to be for ‘cash, deferred payment or some other valuable consideration”. Thus, the scope of the consideration under the three Acts varies somewhat, but what does not vary is that it has to be at the desire of the promisor done either by the promisee or by someone else.
The question, however, is whether these specifications, drawings and designs of value are ‘consideration‘ in the transactions between Maruti and the appellant. As discussed, for something to be a consideration, it must be at provided at the desire of the promisor by either ‘the promisee‘ or someone else - For a promise to come into existence, there must be a proposal (or offer) from the seller and its acceptance by the buyer. Until the proposal is made and accepted, there is no promise. Once the offer is made and accepted, the promise makes the seller the promisor and the buyer the promisee. Before the offer and its acceptance, there is neither any promise nor any promisor-promisee relationship between them as they were only prospective seller and prospective buyer. When the appellant submitted its quotations and Maruti accepted them, Maruti became the promisee and the appellant the promisor.
In a batch of appeals decided by this Tribunal in Denso India Private Limited vs. Additional Director General (Adjudication) [2024 (3) TMI 686 - CESTAT NEW DELHI], appeals in respect of other vendors of Maruti were decided in favour of the appellants on an identical issue.
Conclusion - The specifications and designs provided by Maruti were not to be included in the assessable value for excise duty purposes.
The impugned order cannot be sustained - Appeal allowed.
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2025 (2) TMI 477
Clandestine production and removal of sponge iron - shortage of stock - undervaluation - input / output ratio - it is alleged that by consuming 160198 MT of Iron Ore Fe of 63% the Appellant “should have” manufactured “estimated production” of 95927 MT of Sponge Iron whereas the Appellant has produced 84385 MT of Sponge Iron which is short by 11542 MT - Penalty on Managing Director.
HELD THAT:- There is nothing to indicate that the Revenue has made independent study of the working of the appellant’s plant to take some sample outputs to study the pattern of input / output ratio. As per the data of Purchase of Iron Ore Fe Content, Grade-wise Coal purchased, Input / output ratio declared by the appellant in their Annual Returns, reproduced in the previous paragraphs by way Table, the year-wise details show that the input / output ratio ranges between 1 : 1.92 in 2008-09 to 1 : 1.87 during the period April 2009 to February 2010. The contents of the Table are all declared figures and are verifiable. There is nothing to indicate that due consideration was given for these submissions by the Adjudicating authority before coming to his conclusions. His conclusions seem to be flowing directly from the input/output ratio adopted by the Dept at the time of issuing the Show Cause Notice.
The appellant has filed the Annual Returns showing their input / output ratio for the years 2008-09 and 2009-10, which has not been rebutted by the Revenue by taking up sample production lots. The Revenue has relied solely on the so called expert opinion alone. It is observed from the above decisions as well as the decisions relied within these cases, mere expert opinion on its own, without any cogent, corroborative evidence has no value and does not carry the Revenue further.
Whether the clandestine clearance stands proved by the Revenue? - HELD THAT:- The entire focus of the Revenue in this case has been on proving the clandestine manufacture based on the input/output ratio as given by expert third party. There are no effort has been made by the Revenue on this front - Removal of 11542 MT of sponge iron would require movement hundreds of vehicles. No private records have been seized showing any cash transactions. No statements have been recorded from the purported buyers of the sponge iron. Thus, there are no iota of evidence being gathered by the Revenue to fortify their allegation towards clandestine removal.
The Revenue has not brought in any evidence to show as to how this undervaluation would have resulted in any commercial benefit to the appellant. Since the both units share a common balance sheet at the end of the Financial Year and the Excise Duty paid by the appellant is available as eligible Cenvat Credit at the end of the receiving unit, the situation is that of Revenue neutral. Hence, the confirmed demand of Rs.1,42,845/- set aside.
Time limitation - HELD THAT:- The Revenue has not brought in any evidene to the effect that the appellants have indulged in suppression with an intent to evade. Therefore, the confirmed demand in respect of extended period is hit by time bar provisions. Accordingly, the order to this extent set aside even on account of time bar.
Penalty on Managing Director - HELD THAT:- Since the confirmed demand is not sustainable on merits and on account of limitations, the penalty imposed on the Managing Director also does not sustain. Hence, the penalty imposed on him do not sustain.
Conclusion - i) The demands based on theoretical input/output ratios without corroborative evidence are unsustainable. ii) The lack of evidence for clandestine manufacture and removal led to the dismissal of the demand. iii) The demand was also barred by the limitation period as there was no suppression of facts by the appellant. iv) The penalty on the Managing Director was set aside due to the unsustainability of the primary demand.
The Appeals stand allowed on merits and on account of time bar.
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2025 (2) TMI 476
Invocation of Extended period of limitation - wrongful availment of CENVAT Credit - HELD THAT:- The fact that the alleged wrong availment was discovered during audit only means that the officer responsible to scrutinise the returns had not done his job. Otherwise, what was discovered by the audit could have as well been discovered by the officer. Thus the sole ground on which the extended period of limitation has been invoked is effectively that the assessing officer had not done his job. If the assessing officer did not do his job, it does not mean that the assessee has suppressed anything willfully or mis-stated.
The demand and penalty cannot be sustained on the ground of limitation itself. There is no need to examine the merits of the case as the entire demand is time barred.
Conclusion - The assessing officer's failure to scrutinize the returns properly did not constitute willful suppression by the appellant.
Appeal allowed.
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2025 (2) TMI 416
Clandestine removal - appellant has consumed electricity in excess than the production what has been accounted - suppression of total manufactured quantity - demand raised by the Revenue for the period December 2012 to September 2013 - HELD THAT:- The Department has been issuing periodical notices on the appellant based on the same allegation that the electrical consumption shows that the appellant should have manufactured more ingots. All the proceedings are on the basis of Dr. Batra’s Report on output ratio based on electrical consumption. The earlier eight Show Cause Notices are for the period 2002-03 to 2010. All the Show Cause Notices were initially decided by the adjudicating authority against the party and the demands were confirmed. The appellants had filed their appeal before the Tribunal.
Conclusion - The allegations of suppressing manufacture were not substantiated, as the reliance on Dr. Batra's report was deemed unreliable based on previous precedents.
The Tribunal had remanded the matter to the adjudicating authority to go through all the documentary evidence placed before him and to pass a considered decision - Appeal allowed.
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2025 (2) TMI 415
CENVAT Credit - whether the appellant has received MS ingots? - HELD THAT:- It is understood from the ruling by Hon’ble Allahabad High Court in the case of CCE vs. Juhi Alloys Ltd. [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT] that the manufacturer has to take reasonable steps to ensure that the goods received by it are duty paid. The copies of certain invoices submitted by the appellant on 16.01.2025 indicate the central excise duty paid nature of the inputs and all the entries required in an invoice issued by first stage dealer are entered in the same.
The appellant had taken required care in respect of receipt of inputs from M/s. Shreyas Enterprises. Therefore, in view of the ruling by Hon’ble Allahabad High Court, the appellant is entitled for cenvat credit disputed in the proceedings.
The impugned order set aside - appeal allowed.
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2025 (2) TMI 374
Condonation of delay in filing SLP - Refund of excise duty paid under protest against demand created on alleged manufacture and clearance of Zarda Scented Tobacco - applicability of principles of Unjust Enrichment if the Central Excise Duty has been paid under Compounded Levy Scheme, made applicable in terms of Section 3-A of the Central Excise Act, 1944 - it was held by High Court that 'Once the entire goods cleared by the assessee were only Branded Chewing Tobacco cleared at the M.R.P. rate, the presumption of passing on the disputed duty liability (on the Zarda Scented Tobacco) never arose.'
HELD THAT:- There is a delay of 129 days in filing the Special Leave Petition which has not been satisfactorily explained.
The Special Leave Petition is accordingly dismissed on the ground of limitation.
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2025 (2) TMI 373
Interest on the refund of the Cenvat credit that was reversed following the issuance of SCN - refund amount should be treated as a revenue deposit or not - HELD THAT:- Apparently and admittedly, there is no written protest ever raised by the appellant for reversing the said amount of credit.
It is also an apparent fact that initially the entire amount was held to have been wrongly availed credit. However, this Tribunal vide final order dated 04.07.2011 has partly allowed the availment of Cenvat credit and ordered reversal of the remaining directing the Commissioner (Appeals) to re-quantifying the amount of reversal of Cenvat credit. In view of those directions, the amount of the eligible Cenvat credit to the appellant was quantified. However, the Cenvat credit of such amount, for which the refund claim was filed was held to be ineligible Cenvat credit and thus was ordered to be reversed by the appellant and got reversed also. The said amounts stand appropriated by the adjudication order - Also for the reason that the amount of credit reversed was the same amount as was proposed to be reversed vide the six show cause notices. This reversal to my opinion amounts to appropriation. Appropriation is the act of setting aside money for a specific purpose. The reversal of this amount by the appellant on his own post issuance of show cause notice proposing the said reversal is therefore nothing but the appropriation of the amount towards duty.
The bare perusal of the provision reveals that the liability of interest on delayed refunds vis-à-vis amount of duty arises only when the amount is not refunded within three months from the date of receipt of the application/claim. Since admittedly the refund claim was sanctioned within three months from the date of respective application, the appellant is held not entitled to claim interest on the amount of refund.
Though the Hon’ble Madras High Court in the case M/s Pricol Ltd [2015 (3) TMI 735 - MADRAS HIGH COURT] has held that a consistent view is being taken by the courts that any amount which is deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under protest but as already observed above, there is no evidence of the reversal of Cenval credit to have been made under protest rather the same is held to be an act appropriation on part of the appellant i.e. reversing the utilized amount of Cenvat credit for the reason that the appellant was alleged to not to be entitled for the said credit. In the given circumstances, the entire case laws as relied upon by the appellant is held not applicable to the present case.
Conclusion - In the absence of evidence, the amount is treated as appropriated duty, not eligible for interest under Section 11BB if refunded within the statutory period.
All the four appeals are hereby dismissed.
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2025 (2) TMI 372
Penalty on co-noticees when the main party's case is settled under the SVLDR Scheme, 2019 - HELD THAT:- This Court finds that in the matter of Prakash Steelage Ltd [2024 (11) TMI 468 - CESTAT AHMEDABAD], the matter went in favor of the appellants after various decisions were considered.
It was held in the case that 'the penalties imposed on the co-noticees in a case where the main noticee against whom the demand is confirmed, the case is settled under SVLDRS then in respect of other co-noticees penalty will not sustain even if they have not filed a declaration under SVLDRS-2019'.
Conclusion - The penalties imposed on co-noticees should be set aside if the main party's case is settled under the SVLDR Scheme, 2019.
The appeal is liable to be accepted. Accordingly, appeal is allowed.
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2025 (2) TMI 371
Denial of CENVAT Credit - appellant did not provide the required documents at the time of investigation itself - suppression of facts or not - time limitation - HELD THAT:- In this case, it is not disputed by the learned Authorized Representative that for the period April 2015 to March 2017 appellant is filing their ER-1 returns which is evident from the show cause notice itself. If there is minor discrepancy in the documents for availment of Cenvat credit it cannot be alleged that appellant has willfully suppressed the fact with intent to evade payment of duty.
For the period April 2017 to June 2017 appellant did not file their ER-1 returns, therefore, for the said period extended period of limitation is rightly invoked by the adjudicating authority.
Conclusion - i) If there is minor discrepancy in the documents for availment of Cenvat credit it cannot be alleged that appellant has willfully suppressed the fact with intent to evade payment of duty. ii) The demand pertaining to extended period of limitation except for the period April 2017 to June 2017 is not sustainable. Therefore, the appellant is liable to reverse the ineligible Cenvat credit for the period April 2015 to June 2017 along with interest.
Appeal disposed off.
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2025 (2) TMI 370
Process amounting to manufacture or not - process undertaken by the appellant on the received gas - recovery with interest and penalty - HELD THAT:- The issue involved in the present case is identical as was involved in the earlier appeal of the appellant decided by this Tribunal in M/S. SURYA AIR PRODUCTS PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, CHANDIGARH [2018 (5) TMI 1450 - CESTAT CHANDIGARH]. The decision of this Tribunal for the earlier period has been upheld by the Hon’ble Apex Court in COMMISSIONER OF CENTRAL EXCISE AND S.T. CHANDIGARH VERSUS M/S. SURYA AIR PRODUCTS PVT. LTD. [2024 (7) TMI 1312 - SC ORDER] where it was held that 'In the instant case, the process involved is that the gas received by the appellant through the pipeline has some accumulation of moisture and in order to remove the same from the gas, the compressor has an inbuilt system of drying the moisture. The treatment employed by the respondent-herein is oil filtration for the removal of moisture from gas by drying the inbuilt system of compressing gas into the cylinders. The said process, in our view, does not amount to a manufacturing process.'
Conclusion - The appellant's process of preparing the gas cylinders for sale did not amount to manufacturing under the Central Excise Tariff Act.
The impugned order is not sustainable in law and is set aside - appeal allowed.
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2025 (2) TMI 314
CENVAT Credit - input services under Rule 2(l) of the Cenvat Credit Rules, 2004 - call centre services - extended period of limitation - levy of interest and penalty as well - HELD THAT:- 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.
The issue of Cenvat Credit on invoices of Authorized Service Station for the services provided during the warranty period has already been dealt by the Tribunal in the Appellant’s case M/S L.G. ELECTRONICS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & CGST, GHAZIABAD [2024 (8) TMI 787 - CESTAT ALLAHABAD] where it was held that 'CESTAT has constantly been taking view in respect of admissibility of CENVAT credit in on warranty services provided through third party – authorized service centres.'
Extended period of 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.
Levy of penalty - HELD THAT:- 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. The Appellant has already stated that they have not contravened any provisions of law as they did not avail any credit in contravention of any provisions of law.
Levy of interest - HELD THAT:- 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. Therefore, the impugned order confirming recovery thereof, is liable to be set aside.
Conclusion - i) The services related to sales promotion and brand building have a direct nexus with manufacturing and are eligible for Cenvat credit. The demand, interest, and penalties imposed on the Appellant set aside. ii) The order of Learned Member (Judicial) is agreed by order of Learned Member (Technical).
Appeal allowed.
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2025 (2) TMI 259
Rejection of an application for rectification of mistake due to a delay in filing, under Section 35C(2) of the Central Excise Act, 1944 - failure to follow the principles laid down by the Supreme Court in the case of SUNITADEVI SINGHANIA HOSPITAL TRUST v/s UNION OF INDIA [2008 (11) TMI 249 - SUPREME COURT].
HELD THAT:- The Hon’ble Apex Court in the case of Commissioner of Customs and Central Excise versus Hongo India Private Limited and another [2009 (3) TMI 31 - SUPREME COURT], while interpreting the provisions of Sections 35, 35B, 35EE, 35G and 35 H of the Central Excise Act, 1944, held that the language used in the provisions was clear that the Legislature intended the Appellate Authority to entertain appeal by condoning delay up to 30 days and as per unamended provision of Section 35H, sufficient time of 180 days was prescribed for filing an appeal and revision, and therefore, it was held that the Section 5 of Limitation Act, 1963 excluded in absence of laws condoning the delay by showing sufficient cause after prescribed period.
There is no clause permitting the Tribunal to condone the delay. It is pertinent to note that Section 35C (2) has been amended with effect from 11.05.2002 vide Section 140 (i) of Act of 20 of 2002 to reduce the time limit from four years to six months for rectification of the mistake in the order of the Appellate Tribunal. Thus, the Legislature in his wisdom has fixed the time period of six months to rectify any mistake apparent on record in the order of the Tribunal within a period of six months only, and as such the Tribunal has no power to extend the period prescribed beyond six months to entertain any application for rectification of mistake.
Conclusion - The statutory time limits are binding and cannot be extended by the Tribunal unless explicitly provided by law. The Tribunal acted within its legal bounds by rejecting the rectification application due to the delay.
Appeal dismissed.
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