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Central Excise - Case Laws
Showing 161 to 180 of 81317 Records
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2024 (10) TMI 896
Levy of penalty u/s 11AC of the Central Excise Act, 1944 - non-inclusion of amortized value of the moulding machines supplied free of cost by M/s. Hanil to the appellants - HELD THAT:- Entire amount of duty was paid on 31.08.2012 within three days of the visit of the officers which was on 28.08.2012 and applicable interest was paid on 10.09.2012 whereas the Show Cause Notice was issued only subsequent to payment of interest and duty which was on 28.12.2012.
The provisions of Section 11A(2) of the Central Excise Act, 1944 clearly mandates that when the assessee has paid the duty along with interest and informs the Central Excise officer concerned, no notice shall be served in respect of such duty paid and no penalty is leviable under the provisions of the Act.
Even otherwise, there are no justification to attribute suppression on the part of the appellant with an intent to evade payment of tax. The Ld. Lower Appellate Authority has also observed that it happened due to the ignorance of law on the part of the appellant.
As the appellant has accepted the need to include the amortized cost of the capital goods supplied free of cost in the value of finished products supplied to M/s. Hanil in terms of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, appropriation of the demand of duty and interest is not interfered with. However, the impugned Order-in-Appeal No. 236/2015 (CXA-II) dated 25.08.2015 cannot be sustained only on the issue of imposition of penalty under 11AC of Central Excise 1944.
The appeal is allowed.
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2024 (10) TMI 895
Liability of appellant to pay service tax under reverse charge mechanism in terms of Section 66A of FA - intellectual property service received from M/s. Monogram Licensing International Inc.USA when the service provider located in abroad having office in India - HELD THAT:- There is no dispute in the fact that the service provider M/s. Monogram Licensing International Inc. though located in UAS but at the same time they have their establishment office at Bangalore, in this position, it is necessary to record to Section 66A and Rule 2(1) D4 under which the assessee is require to pay service tax under reverse charge mechanism.
The service recipient is liable to pay service tax only in a case where the service provider located outside India does not have any establishment in India. In the present case admittedly the service provider M/s Monogram Licensing International Inc. has office at Bangalore and the agreement itself has been executed in Bangalore by the signature of Chief Financial Officer of M/s. Monogram Licensing International Inc. Bangalore. In this fact in terms of Section 66 A, the appellant is not liable to pay service tax under reverse charge mechanism. Without prejudice, it is also found that the appellant’s claim that there is revenue neutrality as if at all the service tax is paid, the same is available as Cenvat credit. Therefore, no malafide intention can be attributed to the appellant.
The demand is not sustainable for the extended period - the impugned order is set aside - appeal is allowed.
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2024 (10) TMI 894
Recovery of refund claim - allegation of non-manufacturing activities and manipulation of records - appellant did not have the capacity of deterpenation/fractionation of either the Crude Pipertia Oil or Crude Mentha Oil (Shivalik) or any Mint Oil and so no manufacturing process took place in the manufacturing unit of the appellant in respect of the goods cleared as Fractionated/ Deterpenated/ Distilled Pipertia Oil and Fractionated/ Deterpenated/ Distilled Menthe Oil (Shivalik)/Spearmint Oil or Terpene - extended period of limitation - denial of right of cross-examination - violation of principles of natural justice - HELD THAT:- The Commissioner found that since the departmental officers had verified the facts which had been declared by the appellant in the statutory records and the test reports also indicated that the goods would be Crude Mint Oils, the genuineness of test report conducted after receipt of the goods from the appellant, cannot be doubted and so the request for cross examination of departmental officers and other persons should not be granted. The Commissioner also observed that the case against the appellant is not only on the basis of statements of employees of the appellant, but also on circumstantial test reports and, therefore, denying the right of cross examination would not be violative of principle of natural justice.
These observations made by the Commissioner in the impugned order are clearly contrary to the principles enunciated by the Allahabad High Court in Parmarth Iron [2010 (11) TMI 109 - ALLAHABAD HIGH COURT] and the Punjab and Haryana High Court in Jindal Drugs [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT]. In the first instance, under section 9D of the Central Excise Act it is clear that a statement made during investigation/enquiry before a central excise officer cannot be relied upon unless it is first admitted and for this the person who made the statement has to be summoned and examined as a witness in adjudication proceedings. Failure to do so would mean that the adjudicating authority has relied upon an irrelevant material and, therefore, the order would be vitiated. The question of cross examination would arise only after examination of the person who makes statement before the central excise officer.
The Commissioner has placed reliance upon the statements without following the procedure prescribed under section 9D of the Central Excise Act. The order passed by the Commissioner deserves to be set aside for this reason also - The penalties imposed upon the Partner and Managing Director of the appellant cannot also, for the same reasons, be sustained.
The impugned order dated 17.05.2010 passed by the Commissioner so far as it concerns the three appellants deserves to be set aside and is set aside - appeal allowed.
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2024 (10) TMI 893
Applicability of Rule 6 of the Cenvat Credit Rules, 2004 - Zinc Ash and Zinc Skimming - HELD THAT:- This Tribunal in the case of Mahesh Chemicals Allied Industries [2024 (8) TMI 309 - CESTAT CHANDIGARH] has considered the same issue in details and after considering the same, this Tribunal has allowed the appeal of the appellant-assessee. It is pertinent to reproduce the relevant findings of the Tribunal in the case of Mahesh Chemicals Allied Industries, where it was held that 'Bagasse is non-excisable to which the CENVAT Credit Rules have no application, and held that the Circular dated 25.04.2016 is unsustainable in law.'
The impugned orders are not sustainable in law and are liable to be set aside - Appeal allowed.
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2024 (10) TMI 892
Clandestine removal - Time limitation for issuance of SCN - issuance of show cause notice much belatedly on 28.9.2020 after invoking the extended period despite starting the investigation in the month of May, 2016 itself - suppression of facts or not - discharge of burden of establishing beyond reasonable doubt the clandestine manufacture and removal of alleged assembled T.V. sets from the warehouse/godown at Bhiwandi.
HELD THAT:- It is the case of the department and also the finding of the learned Commissioner that the case is booked by the department on the basis of the statements as well as on the basis of manufacturing process of the appellant and recovery of certain documents from the godown, which collectively established that the appellant assembled ‘parts of TV sets’ at their godown at Bhiwandi that amounts to manufacture and liable to Central Excise duty. Since the statements recorded cannot be relied, the purported manufacturing process which has also been mentioned in those statements also meet the same fate. It is failed to find from record about any manufacturing process being witnessed by the department during search in the godown. Mere finding some table alongwith walls having electricity socket and few TV sets or its parts cannot be considered as corroborative evidence.
From the allegations and arguments, the department tried to pitch it to the extent that the appellant was dealing only in cash payment in order to avoid the identity of its customers. But the ledger account of the appellant establishes other way round. Most of the payments were received through banking channel and the account numbers of the buyers were also mentioned in the ledger. On the sale invoices issued by the appellant, name and address of the buyer alongwith VAT TIN were clearly mentioned from which the bank details and the whereabouts of the said buyers were ascertainable. What the department did, instead of getting the details from the records provided by the appellants by way of ledger, sale invoice etc. they tried to get them through Google search on internet. Therefore there are no force in the submission of the department that in order to clandestinely removing the TV sets incomplete address or incomplete details of the buyers were provided by the appellant.
A case of clandestine removal cannot be proved merely on the basis of probabilities. Revenue did not produce any clinching corroborative evidence to discharge its obligation to prove clandestine removal. Their case is mainly based upon conjecture and surmises. The department failed to establish that the appellant received spare parts etc. clandestinely or some other corroborative evidence to support clandestine removal of complete TV sets from the godown.
A consistent view has been taken by this Tribunal time and again that the proceedings before the Settlement Commission are different from the adjudication proceedings. In proceedings before the Settlement Commission there was no requirement to adjudicate any allegations raised in the show cause notice whereas in adjudicating proceedings the authority concerned has to adjudicate all the issues/allegations raised in the show cause notice - Once the issue has been settled by the Settlement Commission on an application filed by an assessee, the adjudicating authority in different proceedings for different show cause notice concerning same assessee cannot base its adjudication on the findings recorded by the Settlement Commission. Therefore, the Adjudicating Authority is not justified.
As the department has failed to establish any case against the appellant, the duty demand alongwith interest and respective penalties as mentioned in the show cause notice in issue herein cannot survive.
Invocation of extended period of limitation - HELD THAT:- It is no doubt true that when the facts were within the knowledge of the department then the department cannot take the plea of suppression or misdeclaration etc. only to invoke extended period for issuing the show cause notice after 4-5 years. What is gathered from the show cause notice herein that the facts about alleged misdeclaration or suppression etc. were within the knowledge of the department in the year 2016 itself when DRI started investigation in the said year by recording statements etc and informed the department herein - there is no dispute that the fact about alleged mis-declaration was within the knowledge of the department in the year 2016 itself when DRI initiated investigation and show cause notice therein was also issued to the appellant by DRI on 15.7.2016. As per case records, the basis of the instant show cause notice is the information received from DRI in the year 2016 itself but still the instant show cause notice came to be issued much belatedly in the year, 2020 after invoking the extended period which is not invokable.
Mere recovery of certain parts or TV sets or cartons in the instant case is not sufficient to prove clandestine manufacture/assembling or removal. Clinching evidence is required to be produced by the department to substantiate the allegations levelled against the appellants beyond any reasonable doubt which, in the facts of the present case, the department has failed to prove. Neither any evidence of manufacturing of finished goods i.e. TV sets nor its onward transportation or its buyers have been produced on record by the department. Statements, if any, can only provide the missing links to corroborate facts and they cannot, of themselves, establish facts or the whole claim of alleged events. As the duty demand itself has been set aside, there is no question of any interest, and/or penalties etc. On the ground of limitation also the show cause notice cannot sustain.
The show cause notice is not sustainable and the adjudication order impugned herein is therefore set aside - Appeal allowed.
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2024 (10) TMI 891
Levy of penalty under Rule 26(2) of the Central Excise Rules, 2002 - CENVAT credit availed on the basis of fake CENVAT invoices issued by the units - HELD THAT:- This issue is no more res integra and the matter has attained finality by the decision of the Tribunal in the case of Principal Appellant and suppliers of the appellant in the case of M/s Neeru Enterprises [2019 (4) TMI 432 - CESTAT CHANDIGARH] wherein it has been held that Principal Appellant was receiving Menthol, Menthol Flakes and De-Mentholized Oil in its premises as raw materials from it suppliers i.e. J&K manufacturers and was consequentially manufacturing the finished goods and has rightly availed the CENVAT credit.
Further, it is found that the demand for penalty would not arise if the demand against the Principal Appellant is not sustainable and in the present case, the demand against the Principal Appellant is itself set aside by this Tribunal holding that the impugned goods were actually received by the Principal Appellant supplied by the appellant and other J&K manufacturers. Further, the penalty under Rule 26(2) has been imposed whereas during the relevant period, the said Rule did not exist and the same came into existence w.e.f. 11.05.2007.
It is found that once the penalty against the main appellant has been dropped, the penalty against the present appellant is not sustainable and moreover, the said Rule 26(2) was not in existence during the relevant period.
The impugned order is set aside - Appeal allowed.
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2024 (10) TMI 890
CENVAT Credit availed on input services used exclusively in the manufacture of dutiable goods - Activity amounting to manufacture or not - packing and labelling of parts of motor vehicles and safety headgears - whether the CENVAT Credit, availed on the input services used exclusively in the manufacture of the dutiable goods, was required to be included in the numerator for apportioning the common credit between the exempted service (trading) and dutiable goods? - levy of interest and penalty.
HELD THAT:- This issue is no more res integra as it has been held that the CENVAT Credit, which pertains to input services exclusively used in dutiable goods, is not required to be included in the “total CENVAT Credit” for apportionment between exempted services and dutiable goods. It has been held that for apportionment of CENVAT Credit, only such credit which was availed on input service used commonly in exempted service and dutiable goods has to be taken into consideration.
In order to bring parity with the underlying objective of Rule 6, Rule 6(3A) of the Credit Rules was amended vide Notification No. 13/2016-CE (NT) dated 01.03.2016, effective from 01.04.2016, by substituting Rule 6(3A) (b)(ii) of the Credit Rules, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal.
It is observed that such amendment in Rule 6(3A) by virtue of substitution was clarified by the Board vide TRU Circular No. 334/8/2016-TRU dated 29.02.2016, to apply retrospectively. The clarification clearly mentioned that the provisions of Rule 6 providing for reversal of Credit in respect of input services used w.r.t. exempted goods/services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit.
The modality adopted by the Appellant for reversal of credit on proportionate basis is in accordance with the provisions of Rule 6(3A). Hence, the impugned order by upholding the demand on incorrect understanding of provision is erroneous and not sustainable - the impugned order passed by the Ld. Commissioner (Appeals) is not sustainable and is liable to be set aside.
Interest and penalty - HELD THAT:- Since the demand of Cenvat Credit itself is not sustainable, penalty is not imposable and consequently, no interest is also recoverable.
The impugned order is not sustainable and is accordingly set aside - Appeal allowed.
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2024 (10) TMI 884
Valuation - inclusion of cost of ‘type test’, charged by the appellant from some of their customers who have difficulty in carrying out such ascertainment at their premises on ‘transformers’ manufactured by appellant, in the assessable value even though the tests are carried out before clearance - section 4 of Central Excise Act, 1944 - HELD THAT:- There is no doubt that the ‘type test’ is carried out before the goods leave the factory but, at the same time, it is an optional exercise at the instance of such customer, as lack such facilities at their respective premises. Duty, being leviable on manufacture of goods, arises and upon ‘transformers’ coming into existence but chargeable only upon clearance. The contention of the lower authorities is that the goods do not come into existence until after the ‘type test’ is concluded. This premise is clearly unacceptable inasmuch as the clearance to other customers are of ‘transformers’ on which such tests have not been carried out. Consequently, duty liability devolves upon manufacture of ‘transformers’ even before ‘type test’ is carried out.
It is clearly evident from rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 that the cost of transportation of goods from ‘place of removal’, as well as the other cost attributable to services, are not liable to be included in the value of goods manufactured for levy of duties of central excise.
There is no justification for collection of duties of central excise on the consideration realised for an activity which has been subjected to levy under the Finance Act, 1994 - there is no merit in the impugned order which is set aside - Appeal allowed.
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2024 (10) TMI 816
SSI Exemption - clubbing of the value of clearances of PP/HM Sheets and Bags - cross-examination not allowed - violation of principles of natural justice - whether the decision of the Hon'ble Supreme Court in ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2015 (10) TMI 442 - SUPREME COURT], can be applied to the facts of the present case, particularly regarding remitting back the case to the respondents?
HELD THAT:- In the present case, not only the statement of accountant itself is clear but also of the respective petitioners.
The necessity for cross-examining the customer of the respective petitioner is not required as in a quasi judicial proceedings before the respondents, the respondents are merely governed only by the principles of preponderance of probability and are not governed by strict rules of evidence. Unless, the statements of the persons who have given statements against the petitioners are solely relied for confirming the demand, question of cross-examination of any of the persons who have given statements against the petitioners does not arises only where demand is solely based on such statement, the Department has to allow cross-examination or in the alternative eschew such statements.
The impugned orders prima facie indicate that the respondents have merely relied on the statement of buyers of the respective petitioners. They have merely corroborated the records maintained by the respective petitioners that the buyers have purchased PP bags from the respective petitioners. Therefore, there is no merits in the challenge to the impugned orders on the ground that no cross-examination was allowed in terms of the decision of the Hon'ble Supreme Court in Andaman Timber Industries case.
Petition dismissed.
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2024 (10) TMI 815
Process amounting to manufacture or not - Recovery of CENVAT Credit with interest allegedly taken erroneously without undertaking any manufacturing process alongwith direction for payment of equal penalty under Rule 14 & 15(2) of the CENVAT Credit Rules, 2004 read with Section 11A(5), 11AA and 11AC of the Central Excise Act, 1944 - HELD THAT:- It has to be taken on record that w.e.f. 01.03.2003 certain goods undergoing packing, repacking, labelling, relabeling were to be considered as manufacture, even if it is not brought on record as to if the alleged product is goods specified in third schedule of the Central Excise Tariff Act and even if it is accepted that the process undertaken by the Appellant before submitting the products to clearance was not to be considered as manufacture, still Appellant had taken the stand even before the Adjudicating Authority that in such an event duty was refundable to it, which is admittedly much higher than the CENVAT Credit availed during the said period that was held by the Respondent-Department as inadmissible.
Without going into the intricacy of the process of manufacture or the interpretation of provision of law dealing with such manufacturing process, in view of the settled position of law that has been reiterated by the Hon'ble Bombay High Court in the case of Ajinkya Enterprise [2012 (7) TMI 141 - BOMBAY HIGH COURT] that when duty is accepted by the Department against clearance of a manufactured product, CENVAT Credit availed by the manufacturer can’t be denied to it.
The order passed by the Commissioner of Central Excise (Appeals), Mumbai-II is hereby set aside with consequential relief of refund of credit, that was reversed by the Appellant, with applicable interest as per law and the Respondent-Department is directed to pay the same within two months of receipt of this order - Appeal allowed.
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2024 (10) TMI 814
Valuation of Centray Excise duty - whether the trade discount of Rs.01.7 per kg. or Rs.0.26 per kg. offered by the appellant to Navi Mumbai Municipal Transport qualifies to be additional consideration flowing from purchaser to the appellant in view of the fact that the appellant has established their dispensing unit in the land belonging to the said purchaser? - HELD THAT:- Hon’ble Supreme Court in COMMISSIONER VERSUS MAHANAGAR GAS LTD. [2017 (11) TMI 1813 - SC ORDER] that when there is no evidence of flow of additional consideration, the assessable value arrived at after allowing trade discount is as per the provisions of Section 4(1)(a) of Central Excise Act, 1944. In the present case, for use of land appellant is separately paying lease rent. Therefore, there is no additional consideration flowing to the appellant from the purchaser of the goods.
Following the ruling by Hon’ble Supreme Court in the case of Commissioner vs. Mahanagar Gas Ltd. it is held that the discount offered by the appellant to Navi Mumbai Municipal Transport cannot be treated as additional consideration and cannot be added to arrive at assessable value.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 813
CENVAT Credit - invoice though addressed to them but the address of job work is given and the goods were used at the job worker premises for the manufacture of goods to be used by the principal manufacturer - only allegation is that the inputs used in the job worker premises and the address of job worker is mentioned in the invoices - HELD THAT:- It is found that only because the invoices bear the address of the job worker where the name of the appellant is correctly mentioned, Cenvat credit cannot be denied. Since goods have to be processed by the job worker obviously the address of the job worker has to be there on the invoice as consignee, despite this the job worker admittedly carries out the job work for the principal only, therefore, there is absolutely nothing wrong in the invoice and the appellant are eligible for the Cenvat credit.
It is found that in some of the invoice even the name of the job worker is appearing but even if in such cases job worker is not the buyer of the goods but only consignee to process the inputs on behalf of the principal manufacturer i.e. the appellant. Therefore, in such case also Cenvat credit is admissible to the appellant. However, the factual aspect of receipt of inputs at the job worker premises and use thereof needs to be verified by the adjudicating authority.
Cenvat credit on courier service is admissible to the appellant - the appeal is partly allowed in respect of courier service and in other services the appeal is party remanded to the adjudicating authority.
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2024 (10) TMI 812
Interpretation of statute - Rule 6 (3) and Rule 6 (3A) of Cenvat Credit Rules, 2004 - computation of reversal on total Cenvat credit or only on common credit - HELD THAT:- The issue in hand is no more res-integra as for the purpose of the correct calculation of the proportionate Cenvat credit for reversal under Rule 6 (3) in terms of Rule 6 (3A) of Cenvat Credit Rules, 2004 the total Cenvat credit means only the total Cenvat credit of common input and input service which is used for dutiable as well as exempted goods. As per the submission of the appellant they have correctly calculated and reversed the credit.
However, the revenue is at liberty to verify the correctness of the credit reversed by the appellant.
The impugned order is set aside - Appeal allowed.
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2024 (10) TMI 811
Recovery of short paid central excise duty - non-inclusion in the assessable value by the appellant - recovery with interest and penalty - HELD THAT:- Both the authorities below assumed in respect of some invoices of services that the same are attributed to the manufacturing of the excisable goods. Hence, included the same in the value and on which the duty was demanded.
It is prima facie found that there are some of invoices which are even not connected with the supply of manufactured goods whereas those activities are independent service simpliciter. Therefore, at least in respect of those invoices no inclusion can be made in the assessable value of the goods manufactured and cleared on payment of duty. Similarly, there are certain invoices which relates to post-manufacturing and clearance of the goods i.e. related to overall assembly and installation of the plant at site which is not connected with the manufacturing of the appellant. Therefore, the same is also not includable in the assessable value. However, the adjudicating authority has not verified these vital facts before passing a de-novo order.
The impugned order is set aside - matter remanded to the adjudicating authority for passing a fresh order, after compliance of principles of natural justice - appeal allowed by way of remand.
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2024 (10) TMI 810
Refund of excise duty - duty paid over and above 6% on the product All Star Pen cleared as free of cost physician sample - duty paid at the rate of 6% on the product All Star Pen cleared as free of cost physician sample - principles of natural justice - HELD THAT:- Firstly, the appellant have not sold the physician sample, as the same was cleared free of cost so not only the duty even the principle amount towards the cost of physician sample has not been passed on to any other persons Moreover, the appellant have shown the amount of duty as receivable in their books of account and also submitted CA certificate to this effect. Therefore, taking a stock of all these undisputed fact, it can be conveniently concluded that the appellant have not passed on the incidence of duty paid in access for which the refund is sought for by the appellant. Accordingly, the refund of Rs.58,59,456/- is not hit by the mischief of unjust enrichment.
Initially the appellant have filed a refund claim of duty paid at the rate of 6% on the ground that the physician sample is eligible for exemption from whole of the duty. However, as of now the issue of rate of duty i.e. 6% in terms of Notification No. 12/2012-CE dated 17.03.2012 has been finally decided by this Tribunal in the appellant’s own case SANOFI INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, BHARUCH [2024 (3) TMI 978 - CESTAT AHMEDABAD] and also by the revisionary authority order No.40-41/2023-CX(WZ)/ASRA/MUMBAI dated 07.02.2023. Therefore, now as regard the issue of rate of duty is settled at 6% and attained finality. Therefore, the appellant is not eligible for refund as they have correctly paid the duty @ 6%.
Appeal disposed off.
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2024 (10) TMI 809
CENVAT Credit - Crude Mentha Oil - denial of request for cross examination - SCN adjudicated only on the basis of assumptions and presumptions or not - extended period of limitation - HELD THAT:- Since the departmental officers had verified the facts which had been declared by the appellant in the statutory records and the test reports also indicated that the goods would be Crude Mint Oils, the genuineness of test report conducted after receipt of the goods from Amarnath Industries, cannot be doubted and so the request for cross examination of departmental officers and other persons should not be granted. The Commissioner also observed that the case against the appellant is not only on the basis of statements of employees of Amarnath Industries, but also on circumstantial test reports and, therefore, denying the right of cross examination would not be violative of principle of natural justice.
In the first instance, under section 9D of the Central Excise Act it is clear that a statement made during investigation/enquiry before a central excise officer cannot be relied upon unless it is first admitted and for this the person who made the statement has to be summoned and examined as a witness in adjudication proceedings. Failure to do so would mean that the adjudicating authority has relied upon an irrelevant material and, therefore, the order would be vitiated. The question of cross examination would arise only after examination of the person who makes statement before the central excise officer.
The Commissioner has placed reliance upon the statements without following the procedure prescribed under section 9D of the Central Excise Act. The order passed by the Commissioner deserves to be set aside for this reason also - The penalties imposed upon the Managing Director of the appellant cannot also, for the same reasons, be sustained.
The impugned order dated 17.05.2010 passed by the Commissioner so far as it concerns the appellant deserves to be set aside and is set aside - Appeal allowed.
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2024 (10) TMI 808
Denial of CENVAT Credit - non-manufacture of goods by Amarnath Industries - appellant cleared the raw material i.e., Crude Mentha Oil, Crude Piperita Oils, Crude Spearmint Oils as it is without subjecting the same to any manufacturing process - irregular availment of benefit of Notification dated 14.11.2002 during the period 29.04.2005 to 04.06.2002 - Whether the final products stated to be supplied to the appellant and to various other buyers were raw-material supplied to them as such under the guise of final products during the above period - denial of cross-examination - violation of priciples of natural justice?
HELD THAT:- The Commissioner found that since the departmental officers had verified the facts which had been declared by the appellant in the statutory records and the test reports also indicated that the goods would be Crude Mint Oils, the genuineness of test report conducted after receipt of the goods from Amarnath Industries, cannot be doubted and so the request for cross examination of departmental officers and other persons should not be granted. The Commissioner also observed that the case against the appellant is not only on the basis of statements of employees of Amarnath Industries, but also on circumstantial test reports and, therefore, denying the right of cross examination would not be violative of principle of natural justice.
In the first instance, under section 9D of the Central Excise Act it is clear that a statement made during investigation/enquiry before a central excise officer cannot be relied upon unless it is first admitted and for this the person who made the statement has to be summoned and examined as a witness in adjudication proceedings. Failure to do so would mean that the adjudicating authority has relied upon an irrelevant material and, therefore, the order would be vitiated. The question of cross examination would arise only after examination of the person who makes statement before the central excise officer.
The Commissioner has placed reliance upon the statements without following the procedure prescribed under section 9D of the Central Excise Act. The order passed by the Commissioner deserves to be set aside for this reason also - The penalties imposed upon the Managing Director of the appellant cannot also, for the same reasons, be sustained.
The impugned order dated 17.05.2010 passed by the Commissioner so far as it concerns the two appellants deserves to be set aside and is set aside - appeal allowed.
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2024 (10) TMI 807
CENVAT Credit - input services - outward Goods Transport Agency Services - place of removal - HELD THAT:- The issue is no more res integra as the same has been finally decided by the Larger Bench vide M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE, TRICHY [2024 (7) TMI 680 - CESTAT CHENNAI] wherein it was held 'in a case where clearances of goods are against FOR contract basis, the authority needs to ascertain the ‘place of removal’ by applying the judgments of the Supreme Court in Emco and Roofit Industries, the decision of the Karnataka High Court in Bharat Fritz Werner, and the Circular dated 08.06.2018 of the Board to determine the admissibility of CENVAT credit on the GTA Service upto the place of removal.'
From the appeal records, it is evident that in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT], the Hon’ble Apex Court had held that credit of service tax paid for outward transportation of goods is not eligible.
These appeals are allowed by way of remand to the Lower Adjudicating Authority who is directed to verify the documents and ascertain the place of removal. The appellant would be eligible for the CENVAT credit, in case, the Buyer’s premises is the place of removal.
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2024 (10) TMI 806
Wrongful availment of CENVAT credit on input services relating to construction of co-generative power plant in their factory during period from September 2010 to March 2012 - HELD THAT:- The learned Commissioner had not considered the documents placed before him in support of their claim that civil construction work had been completed prior to 31.03.2011. These documents and are required to be specifically scrutinised by the learned Commissioner and also the objection raised by the learned AR for the Revenue about the admissibility of cenvat credit on the invoices raised after 01.04.2011 in view of Point of Taxation Rules, also needs to be examined. Thus, the matter is remanded to the adjudicating authority to address all the issues raised at the time of de novo adjudication.
Appeal allowed by way of remand.
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2024 (10) TMI 805
Eligibility for exemption under N/N. 30/2004-CE - Clearing Texturized Yarn under chapter 54 of CETA - Knitted Fabrics under chapter 60 of the CETA - assesse’s contention is that they are exempted from payment of duty under Notification No.30/2004-CE dated 09.07.2004 on the clearances of texturised yarn and knitted fabrics manufactured out of POY, which was not procured from outside, does not fall under the ambit of the said notification - Extended period of limitation.
HELD THAT:- N/N. 30/2004-CE dated 09.07.2004 as amended vide N/N. 10/2005 dated 01.03.2005 exempts all filament yarn procured from outside and subjected to any process by a manufacturer who does not have the facilities in his factory (including plant and equipment) for manufacture of filament yarns of chapter 54, from payment of whole of Central Excise Duty. Further, benefit of Notification is available to goods of Chapter 54 and 60 of Central Excise Tariff if credit of duty on inputs or capital goods has not been taken under the provisions of the Cenvat Credit Rules, 2002/2004.
In the present matter Appellant claimed the all the manufacturing areas are to be treated as separate entity and we find support in claim of the Appellant. M/s. SPPL obtained Central Excise Registration dated 14.05.2004 for manufacture of POY falling under Chapter sub-heading No. 5402 42 and texturized yarn under chapter heading No. 540232. It is noticed that appellant vide their letter dated 21.02.2014 filed the application for amendment in their Central Excise Registration certificate they had submitted the new factory ground plan, in addition they had also filed online Application in Form A-1 on 21.02.2004.
The Knitted Fabric falls under Chapter 60 and as per above entry it does not have any other condition except that the assessee should not avail the Cenvat credit on the input. In the case of knitted fabric, even though the unit No.1 availed the Cenvat credit but the excise duty on the POY was paid and such duty paid goods was subsequently used by unit No.2 & 3 but no Cenvat credit was availed on the POY - Accordingly, in the present case knitted fabric is clearly exempted as no Cenvat credit was availed on its inputs in terms of notification No. 30/2004-C.E. dated 09.07.2004 (Sl.15). Therefore on this alternate finding the knitted fabric is undisputedly exempted.
It is clear that even in the same factory if the Cenvat credit is availed on the initial input and used in the manufacture of intermediate product on which excise duty is paid and subsequently no Cenvat credit is availed on the said intermediate goods, the final product manufactured out of the said duty paid intermediate product shall be eligible for exemption carrying condition of non availment of Cenvat credit on input. This view is based on the fact that the final product manufactured is not out of cenvatted input, hence the condition of the notification clearly stands fulfilled. Therefore in the present case knitted fabric is eligible for exemption. Accordingly the duty demand on knitted fabric is not sustainable on this ground also.
Extended period of limitation - HELD THAT:- Claiming the exemption notification which was in the knowledge of the Revenue, the suppression of fact or mala fide on the part of the appellant cannot be attributed. Further the issue involved is clearly an interpretational issue of exemption notification. Therefore, in the peculiar facts as noted above there is no suppression of fact or mala fide intention on part of the appellant, therefore, the invocation of extended period is illegal and incorrect. Accordingly, the demand for the longer period is not sustainable on the ground of time bar also. The demand is set aside on merit as well as on limitation.
The appeals filed by the assesse-appellants are allowed.
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