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Central Excise - Case Laws
Showing 161 to 180 of 81787 Records
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2025 (2) TMI 258
Levy of Central Excise duty - appellant retained 50% of the sales tax/VAT collected from its customers - invocation of extended period of limitation.
Whether the amount which was paid to the appellant as sales tax by its customers but retained by the appellant on the strength of state government's deferment scheme, merits inclusion in the transaction value for computing central excise duty under Section 4 of the Central Excise Act, 1944 or not? - HELD THAT:- This issue is no more res integra as the Tribunal in the case of M/S HONDA MOTORCYCLES & SCOOTERS INDIA PVT. LTD. VERSUS CCE, DELHI-III [2016 (9) TMI 533 - CESTAT CHANDIGARH] has considered the issue of retention of 50% of the amount under tax concession scheme allowed by the Haryana State Government and has held 'the impugned order is correct in upholding the inclusion of that portion of Sales Tax/VAT in the assessable value collected by the appellants but not paid or payable to the State Government followed by the various decision of Hon'ble Supreme Court.'
Extended period of limitation - HELD THAT:- The learned Commissioner confirmed the demand by invoking the extended period, but the department had not established anything on record to show that the appellant has suppressed the material facts with intent to evade the payment of duty. Further, it is found that the issue involved in the present appeal relates to interpretation of the law and the Rules and finally, the Hon‟ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-III VERSUS M/S. MARUTI SUZUKI INDIA LTD. [2014 (9) TMI 229 - SUPREME COURT] has settled the position of law, therefore, invoking extended period is not justified in the present case.
Conclusion - i) The demand by invoking extended period of limitation is set aside. ii) The demand for the normal period is confirmed along with interest. iii) The appellant is entitled to benefit of cum-duty. iv) No penalty is imposable on the appellant.
Appeal disposed off.
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2025 (2) TMI 257
Benefit of the exemption N/N. 6/2006-CE dated 01.03.2006 for supplies made to mega power projects against International Competitive Bidding - Invocation of Extended period of limitation - HELD HAT:- Before considering the merits of the case, it is necessary to examine the grounds on which extended period of limitation was invoked - The Assistant Commissioner had not examined the question of limitation because he found in favour of the appellant on merits. The Commissioner (Appeals) did not record any findings on the question of limitation.
Extended period of limitation - HELD THAT:- The extended period of limitation was invoked only on the ground that the appellant, by way of willful mis-statement and wrong availment of the said notification by way of mis-representation of facts, which came to the knowledge only during the audit, invoked extended period of limitation. It is a well-settled principal that extended period of limitation cannot be invoked unless one of the five elements necessary to invoke it viz., fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty is established. In this case there are no details, let alone evidence in the SCN, of either willful mis-statement or mis-representation of facts.
There was no ground to invoke extended period of limitation. The entire period of demand from June 2010 to October 2010 was beyond the normal period of limitation and was time-barred. Therefore, it is not necessary to examine the merits of the case.
Appeal allowed.
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2025 (2) TMI 256
Classification of goods - Add-on Cards - to be classified under Chapter sub-heading 8471.00 attracting Central Excise Duty @ 15% or under Chapter sub-heading 8473.00 attracting Central Excise Duty @20%? - HELD THAT:- The issue regarding the classification of Add-on Cards is no more res integra in view of the decision passed by the Tribunal, Mumbai in the case of Commissioner of Central Excise, Mumbai-II Vs. Virtual Computers Pvt. Ltd. [2012 (7) TMI 232 - CESTAT, MUMBAI] holding that Mother Boards and Add-on Cards are classifiable under Chapter Heading 8473 of the Central Excise Tariff Act, 1985.
The Tribunal, Mumbai has held that 'The add-on card and motherboard cannot be considered as automatic data processing machines. The same are parts and accessories suitable for use with the machine falling under Heading 84.71 of the Tariff. In view of the above, as the goods in question are parts and accessories of the data processing machine falling under Heading 84.71 of the Tariff, therefore being parts and accessories are classifiable under Heading 8473 of the Tariff.'
The appeal is rejected upholding the classification of Add-on Cards under Chapter Heading 8473 of the Central Excise Tariff Act, 1985. As such demand of duty is confirmed. No interest is payable as the provision for payment of interest in terms of Section 11AB of the Central Excise Act, 1944 is applicable from 28.09.1996.
Conclusion - The classification of Add-on cars under Chapter Heading 8473 upheld.
The appeal is rejected but for the modification to the extent of setting aside the penalty imposed.
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2025 (2) TMI 255
Rejection of refund claim - rejection on the ground that the items Gemcitabine Hydrochloride and Doxorubicin Hydrochloride are not the drugs specified in the list - 3 & 4 of the N/N. 21/2002-Cus dated 01.03.2002, which forms the base for claiming the exemption under N/N. 04/2006-CE dated 1/3/2006 - appellant has passed the duty component claimed as refund to the customers or not - principles of unjust enrichment - HELD THAT:- Notification No. 4/2006-CE dated 01.03.2006 at S.No. 47 grants exemption to various drugs or medicines including their salt and esters, specified in List 3 or 4 appended to the Notification 21/02-Cus dated 01.03.2002. It is also found that in the appellant’s own case the Ld. Commissioner during the relevant period has held that the appellant is entitled to the exemption provided under the Notification as the same is extendable to the hydrochlorides of the drugs or medicines prescribed under list 3 and 4 of the Customs Notification vide Order in Original No. V(30)15/CE/ADJ/81/2007/296 dated 14.01.2016.
The pharmaceutical substances are prepared as hydrochlorides so that they may be quickly released in the gastrointestinal tract which body usually absorbs within 15-30 minutes; therefore, exemption granted to various formulations under the notifications also includes their salts, esters, and not including of Hydrochlorides under Notification will make the Notification redundant and this aspect has also been indicated in the various Pharmacoepia - the denial of exemption to the appellant amount to discrimination because the other manufacturer who are manufacturing the identical goods are availing the exemption which has been sought to be denied to the appellant which is not permitted in law.
Principles of unjust enrichment - HELD THAT:- The appellant has procured the bulk drug on payment of duty which was borne by them and has not been passed on to any customer and in order to establish this fact, the appellant has produced the copies of balance sheet, wherein it has been recorded that the amount of duty paid on bulk drug as "Receivable" under Current Asset and not included the same in the cost of the injections manufactured by the appellant.
Conclusion - i) The exemption under Notification No. 04/2006-CE extends to hydrochlorides of specified drugs, consistent with legislative intent. ii) The appellant successfully demonstrated that the duty was not passed on to customers, satisfying the test of unjust enrichment.
Appeal allowed.
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2025 (2) TMI 254
Entitlement to the duty exemption under N/N. 10/97-CE dated 01.03.1997 for the goods supplied to the Aeronautical Development Agency (ADA) - HELD THAT:- It is an admitted fact that the goods were supplied by the appellant without payment of duty, since the institution to whom the goods were supplied are exempted from payment of duty under N/N. 10/1997-CE and they have also produced valid certificates from the competent authority as required under N/N. 10/1997-CE in support of their claim.
Further, it is found that as held by this Tribunal in appellant’s own case [2016 (8) TMI 438 - CESTAT BANGALORE], the items supplied by the appellant to 'Aeronautical Development Agency (ADA)' a non-Commercial Research Institution under the administrative control of the Department of Defence Research & Development of Government of India, Ministry of Defence are eligible for the benefit of exemption under the N/N. 10/1997-CE dated 01.03.1997 as they have fulfilled the conditions for claiming the exemption benefit.
Conclusion - The appellant are eligible for the benefit of exemption under the N/N. 10/1997-CE dated 01.03.1997 as they have fulfilled the conditions for claiming the exemption benefit.
Appeal allowed.
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2025 (2) TMI 210
Calculation of Central 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 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.
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.
Conclusion - The notional cost of specifications provided by MSIL is not includable in the assessable value of the final products.
Appeal allowed.
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2025 (2) TMI 209
Demand of differential duty of excise short paid on the goods sold - DSRM and DSRMPL are related parties under Section 4(3)(b)(i) of the Central Excise Act, 1944 or not - inter-connected undertakings - applicability of Rules 8, 9, and 10 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Extended period of limitation - HELD THAT:- On a plain reading of the said Rule 10, it would be clear that the provisions of Rule 10 would govern transactions between undertakings which were “inter-connected undertaking” and in terms of Rule 10(a) ibid, the inter-connected undertakings should be so connected that they are also related in terms of sub-clause (ii) or (iii) or (iv) of Section 4(3)(b) of CEA to attract determination of the value in the manner prescribed in rule 9. DSRM had contended that from the shareholding patterns it would be amply clear that they are not holding and subsidiary companies and given that they are not covered under the aforementioned sub-clauses, the provisions of Rule 10(a) ibid would not be applicable and that the only recourse left to be taken is the valuation of their goods cleared to DSRMPL under Rule 10(b) ibid which in other words means that the value shall be determined as if they are not related persons for the purpose of sub-section (1) of Section 4.
While the contention of DSRM that from the shareholding patterns it would be evident that DSRM and DSRMPL are not holding and subsidiary companies, is not seen controverted in the OIO, it is seen that the adjudicating authority has brushed aside the contention of the appellant that the value has to be determined in accordance with Rule 10 of the valuation rules stating that it is unsustainable since DSRM had adopted the CAS-4 valuation for paying differential duty during 2009-10 - since it is an admitted fact that DSRM and DSRML are treated as related only on the ground of being inter-connected undertakings as stated in sub-clause (i) of Section 4(3)(b), the legal premise based on Rule 9 and Rule 8 that has been invoked in the SCN to foist the requirement of adherence to CAS-4 valuation by DSRM thus stands demolished.
Extended period of limitation - HELD THAT:- Admittedly the appellant has adhered to the instructions of the Department as communicated to the appellant vide letter C. No. III/1-318/2010-IA dated 13.09.2010 in appointing a qualified Cost Accountant and adopting CAS-4 valuation. Even thereafter, consequent to the visits of the audit department as and when the appellant has been communicated the CAS-4 valuation which is to be adopted according to the Department, the appellant has implicitly complied with the same. That the appellant, despite having views to the contrary as was communicated by the appellant to the department, had chosen to buy peace by adhering to the CAS-4 valuation provided by the Department, shows that there were interpretational issues involved. Given these circumstances, the demand is also barred by limitation.
Conclusion - i) The interconnected undertakings under Section 4(3)(b)(i) are not automatically subject to valuation under Rules 8 or 9 unless further related as specified in sub-clauses (ii), (iii), or (iv). ii) The demand is also barred by limitation.
Appeal allowed.
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2025 (2) TMI 208
CENVAT Credit - maintenance of separate records for inputs used in the manufacture of dutiable and exempted goods or not - HELD THAT:- Though it is settled law that the appellate authority should not reverse the identical finding of fact recorded by the two subordinate authorities viz adjudicating authority and first appellate authority, still to determine the correctness of the claim made by the appellant, the records produced by the appellant are verified on sample basis for the month of December 2013 in the presence of counsel of Appellant during the hearing on 12.09.2024. On next date of hearing i.e. on 03.10.2024, the counsel for appellant failed to provide any explanation and sought adjournment.
Appellant didn’t filed any submissions even after being allowed time to explain the discrepancies noted during the hearing on 12.09.2023. Thus I have reason to conclude that the appellant has no submission to make in this regards.
From perusal of the said documents it is evident that appellant has taken CENVAT credit against the documents in respect of which he claims that no credit was taken. The submission of the appellant in this respect is not supported by the said documents and is totally perverse, and appellant has failed to provide any explanation for the same.
Conclusion - The requirement for maintaining separate records under Rule 6(2) of the Cenvat Credit Rules, 2004 affirmed. The application of Rule 6(3)(i) for non-compliance upheld, resulting in a demand for payment based on the value of exempted goods.
There are no reason to interfere with the impugned order - appeal dismissed.
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2025 (2) TMI 181
CENVAT Credit on capital goods - gas plant located at Duliajan belonging to the appellant, which supplies gas for manufacturing polymers at Lepetkata forms part of the manufacturing unit at Lepetkata so as to enable appellant to claim Cenvat Credit on capital goods installed at Duliajan or not - HELD THAT:- The present case is not a case of transportation of final product but transfer of raw material to the main unit by an ancillary unit for the purpose of manufacturing the final product.
The substantial question of law framed in this excise appeal is required to be answered in the affirmative and it is, accordingly, held that the appellant Company is entitled to avail CENVAT Credit on capital goods (both domestic and imported) installed at Duliajan Unit.
Appeal disposed off.
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2025 (2) TMI 180
Appropriation of excess paid duty amount towards the short payment of excise duty along with interest amount - duty incidence has already been passed on to their buyers or not - principles of unjust enrichment - lack of personal hearing - principles of natural justice - HELD THAT:- The present appeal stands squarely covered against them as decided by the First Appellate Authority following the decision of the Apex Court in their own case COMMISSIONER OF CENTRAL EXCISE, MADRAS VERSUS M/S ADDISON & CO. LTD. [2016 (8) TMI 1071 - SUPREME COURT] where the claim was rejected.
The finalization of the provisional assessment did not violate the principles of natural justice.
Conclusion - The Apex Court's decision applied to the present facts, finding no grounds to deviate from the established precedent. The appellant contended a lack of personal hearing, which is a critical component of natural justice, but the appellant's claims were not sufficient to overturn the findings of the Original Authority.
Appeal dismissed.
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2025 (2) TMI 179
Applicability of section 11B of the Central Excise Act, 1944 relating to claim for refund of duty - applicable in a matter where adjustment is claimed by an assessee of excess amount of duty paid against future duty liability in terms of rule 96ZO of the Central Excise Rules 2002 [Rules] or not - HELD THAT:- The adjustment made of the excise duty made in the month of March 2000 was denied to the appellant by the order dated 25.09.2001 for the reason that the appellant should have applied for refund of the excess amount of duty paid under section 11B of the Central Excise Act as the excess duty was paid by the appellant under section 3 of the Central Excise Act.
In the present appeal, the scheme framed under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules is also a compounded levy scheme. It provides for a mechanism where duty liability can be adjusted - The law laid down by the Supreme Court in Hans Steel Rolling [2011 (3) TMI 2 - SUPREME COURT] for applicability of section 11A of the Central Excise Act would also be applicable to the provisions of section 11B of the Central Excise Act. It has, therefore, to be held that the provisions of section 11B of the Central Excise Act would not be applicable to cases where excess duty paid is adjusted against future duty liability in terms of the provisions of the compounded levy scheme contained in the notification dated 01.08.1997 issued under section 3A of the Central Excise Act and rule 96ZO of the Central Excise Rules.
The appellant had not paid duty under section 3 of the Central Excise Act for the month of August 1997, as admittedly the duty of Rs. 750 per metric tonne was paid under rule 96ZO of the Central Excise Rules and it is only because subsequently the said rule was made applicable from 01.09.1997 and not 01.08.1997 that the appellant became entitled to adjustment of excess central excise duty paid for the month of August 1997.
Conclusion - Section 11B of the Central Excise Act would not be applicable to matters covered by section 3A of the Central Excise Act as the provisions of the said section and the rules framed thereunder are self-contained and do not admit of applicability of section 11B of the Central Excise Act.
The appeal may now be placed before the Division Bench of the Tribunal for deciding the appeal on merits.
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2025 (2) TMI 142
Appropriation of amount deposited during investigation towards penalty, towards the amount of duty confirmed in the impugned order - levy of penalty u/r 26 of the Central Excise Rules, 2002, read with Section 174(2) of the CGST Act, 2017 - HELD THAT:- It is undisputed that the amount of Rs. 61,06,692/- was deposited by Balaji under the head “other receipts” as representing towards the penalty. Although no penalty was imposed on them, it was deposited apparently towards the anticipated penalty. Thereafter, once the impugned order was passed, the appellant adjusted this amount against the 25% penalty to be deposited within 30 days. Thus, it fulfilled the condition to avail the benefit of reduced penalty of 25%. If this amount is adjusted towards the deposit of duty, naturally it cannot also be accounted towards penalty and in which case the sum paid as penalty within 30 days would be only of Rs. 72,14,714/- which is much lower than the 25% of the confirmed duty.
Conclusion - The impugned order is correct in not adjusting the amount deposited as penalty before the SCN was issued towards duty. This amount has already been adjusted by Balaji while paying the 25% penalty.
Appeal dismissed.
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2025 (2) TMI 141
Denial of Cenvat Credit on various input services - canteen services - hospitality charges - real estate agent commissions - construction services - levy of interest and penalty - Extended period of limitation.
Denial of CENVAT Credit - HELD THAT:- It is found that definition of ‘input services’ for the period until 01.04.2011 as provided under Rule 2(l) of the Cenvat Credit Rules, 2004 clearly provides that the input services include services used by the manufacturer, directly or indirectly, in the manufacturing process. The said definition has been widely interpreted by various courts to include all services used in relation to the manufacture of final products.
It is found that each of the input services involved in the present case has been held to be ‘input service’ by various decisions cited above, wherein it has been held that the services such as Outdoor Catering/Canteen Services, Hospitality Charges & Commission Charges by Real Estate Agent, Construction Services used by the appellant for design & installation of the factory premises are held as ‘input services’ and the Cenvat Credit cannot be denied with regard to these services.
Invocation of extended period of limitation - HELD THAT:- It is found that it was an interpretational issue and the appellant had a bona fide belief that they were entitled to Cenvat Credit on the input services which were used for the purpose of carrying the business for manufacturing. Further, the department has not established any of the ingredients such as fraud, collusion, wilful misstatement or suppression of facts or contravention of any of the provisions of the Act or Rules with intent to evade the payment of tax, which are required for the purpose of invocation of extended period. Further, it is found that only during the audit of the appellant, it was discovered the appellant has taken the Cenvat Credit on these impugned services, which also shows that there is no intention to evade payment of tax; therefore, the entire demand is also barred by time.
Interest - penalty - HELD THAT:- The question of interest and penalty does not arise when the demand itself is not sustainable.
The impugned order set aside - appeal allowed on merits as well as on limitation.
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2025 (2) TMI 140
100% EOU - levy of Customs Duty on sale of capital goods by a 100% Export Oriented Unit (EOU) to an overseas buyer, without physical removal from the EOU premises - deemed debonding or removal of goods or not - import of moulds from M/s. Ampa Industries in the year 2007 without payment of customs duties based on exemption contained in N/N. 52/2003-Cus dated 31.3.2003 - Extended period of Limitation - penalty.
Whether the sale of capital goods being used within an EOU to TVS Indonesia, without physical removal can be treated as deemed debonding / removal of the goods from the EOU on which duty has to be paid? - HELD THAT:- The ownership of the capital goods is not a criterion to avail duty exemption on imports on the said goods. If the appellant could have imported the capital goods on loan basis and still enjoyed the concession there is nothing in the Customs Act or subordinate provisions which require him to pay duty just because he sold the capital goods to the buyer of his products, without physically removing the goods from the Unit.
Further sale would not amount to removal of goods / debonding unless such a provision is made in law. A deeming provision should be express and cannot be assumed. No such deeming provision has been alluded to by revenue in this case. In a normal situation it is the occurrence of the taxable event that creates or attracts the liability to tax.
As held by the Hon’ble Supreme court in the case of KIRAN SPINNING MILLS VERSUS COLLECTOR OF CUSTOMS [1999 (8) TMI 82 - SUPREME COURT] the taxable event with respect to warehoused goods occurs when the goods are physically removed from the warehouse. This shows that ownership of the goods is irrelevant for an EOU to undertake its authorized operations.
In JK. COTTON SPINNING AND WEAVING MILLS LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [1987 (10) TMI 51 - SUPREME COURT], the hon’ble Apex Court held that, “there can be no doubt that the word 'removal contemplated shifting of a thing from one place to another. In other words, it contemplates physical movement of goods from one place to another.” In this case there is no shifting of the goods nor is there a deeming provision for sale or change of title to amount to removal, accordingly, sale of capital goods without physical removal from the EOU cannot be treated as deemed removal of the goods.
The provision requires that goods imported duty free under the said Notification shall be removed from such bonded premises only after payment of duty. There has been no physical movement of goods outside he EOU and hence no removal / clearance of the impugned capital goods took place. This being so no duty was required to be paid. As per the legal position, no demand survives.
Extended period of Limitation - penalty - HELD THAT:- The Central Excise authorities had duly verified and found correct the duty payable by the Appellant while exiting the EOU Scheme and a ‘No Objection Certificate’ granted. Hence it is deemed that the department was aware of the transaction, unless they had shown otherwise by way of fraud etc, which is not the case here. Hence the extended period of limitation under Section 28(4) of Customs Act, 1962 could not have been invoked nor can the goods be held liable for confiscation. No penalty could be imposed on the Appellant.
Conclusion - i) The ownership of the capital goods is not a criterion to avail duty exemption on imports," and "sale would not amount to removal of goods / debonding unless such a provision is made in law. ii) There has been no physical movement of goods outside he EOU and hence no removal / clearance of the impugned capital goods took place. This being so no duty was required to be paid. As per the legal position, no demand survives. iii) The appellant had exited the 100% EOU Scheme with proper authorization and verification by the Central Excise authorities, negating any grounds for invoking the extended period of limitation or imposing penalties.
The demand fails on merits and the impugned order is hence set aside - Appeal allowed.
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2025 (2) TMI 139
100% EOU - recovery of Customs Duty with interest and penalty - duty foregone on raw materials and inputs used in the manufacture of goods cleared in the Domestic Tariff Area (DTA) at nil rate of duty - whether the benefit of N/N. 12/2012-Cus (S No 431) and 12/2012-CE (S No 272) can be extended to the respondent?
HELD THAT:- From perusal of entry at S No 431, of the custom notification, ii is evident that exemption has been granted to all parts, components, accessories and sub parts of these, for the manufacture of mobile handsets, battery chargers, PC connectivity cables, Memory cards and hands-free headphones of mobile handsets. The phrase used in the said entry is “for the manufacture of” and not “of”. Thus anything which goes into the manufacture of these items would be eligible to exemption under the said entry of this notification. It is settled position in law that the exemption notification need to be construed strictly as per the words and phrase used in the notification. From the phrase used we are of the view that this phrase would cover all the items that are consumed directly or indirectly for the manufacture of these items.
Similar expressions were used while defining the “Capital Goods” as per Rule 57 Q of the Central Excise Rules, 1994 and Hon’ble Supreme Court has in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [2001 (7) TMI 118 - SUPREME COURT] interpreted the said phrase to be very wide to cover all things used in the factory of production to be covered by the said definition. It was held by Supreme Court that 'The aforesaid definition of ‘Capital goods’ is very wide. Capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances. Any of these goods if used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product would be ‘Capital goods’, and, therefore, qualify for availing Modvat credit. Per clause (b), the components, spare parts and accessories of the goods mentioned in clause (a) used for the purposes enumerated therein would also be ‘Capital goods’ and qualify for Modvat credit entitlement. Clause (c) makes moulds and dies, generating sets and weigh bridges used in the factory of the manufacturers as capital goods and thus qualify for availing Modvat credit.'
It is found that the controversy sought to be raised in the present case as to whether these goods qualify as “component” part or accessory, etc., is totally irrelevant for determining the issue of admissibility of these notifications. The benefit of these notifications will be available in respect of all goods used for manufacture/ production of mobile parts and battery chargers.
Conclusion - The exemption notifications should be interpreted liberally to include all items used in the manufacturing process, not just identifiable components and parts. The benefit of these notifications will be available in respect of all goods used for manufacture/production of mobile parts and battery chargers.
Appeal of Revenue dismissed.
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2025 (2) TMI 101
100% EOU - classification and duty exemption of imported drugs under N/N. 12/2012-Cus. dated 17 March, 2012, Serial No. 147(A) - difference between bulk drugs and drugs - HELD THAT:- The issue has been dealt with in para 5.2 of the decision in the matter of AUROBINDO PHARMA LTD. VERSUS COMMISSIONER OF C.EX., HYDERABAD-I [2009 (3) TMI 810 - CESTAT, BANGALORE] by the advocate, where it was held that 'the term "drug" has to be considered to include bulk drug and formulation as per Drugs (Prices Control) Order, 1995 and hence, both the items being bulk drugs are entitled for the benefit of the Notification.'
In view of the ratio, that there is no difference between bulk drugs and drugs and term drugs include the bulk drags also. This Court find that the issue is no more res integra.
Conclusion - Imported drugs is eligible for duty exemption under N/N. 12/2012-Cus. dated 17 March, 2012, Serial No. 147(A).
Appeal allowed.
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2025 (2) TMI 100
Implications of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS-2019) on penalties imposed on co-noticees - primary noticee has settled their duty demand under the scheme - HELD THAT:- This Court is bound by the Division Bench decision in PRAKASH STEELAGE LTD., DHARA ENGINEERING WORKS, SAMRUDDHI STEELS, KASHIPAREKH BROS AND AESH STEELS VERSUS C.C.E. & S.T. BHARUCH [2024 (11) TMI 468 - CESTAT AHMEDABAD] where it was held that 'it is settled that once the duty demand case is settled under SVLDRS-2019, as per Scheme itself, there is a waiver of penalties on the main assessee against whom the demand was confirmed as well as on other conoticees.'
Conclusion - 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.
Appeal allowed.
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2025 (2) TMI 74
Adjustment of excess duty paid by the Appellant against the demand for differential duty - applicability of doctrine of unjust enrichment to reject the claim for a refund of the excess duty paid upon the finalization of provisional assessment? - HELD THAT:- Sub-rule 6 ibid safeguards the right of the assessee to claim refund in case any amount is found paid in excess. However, this right is subject to the applicability of principle of unjust enrichment. Rule 7 nowhere talks about adjustment of excess duty paid towards the duty short paid. The view held by the Larger Bench in the Excel Rubber Limited case [2011 (3) TMI 527 - CESTAT, NEW DELHI (LB)] relied in the impugned order is that before grant of adjustment, the authority finalizing the provisional assessment will have to ascertain whether such excess amount is to be actually refunded or is liable either wholly or partly to be credited to the Consumer Welfare Fund and only thereafter make an order of adjustment to the extent the amount found to be actually refundable.
Hon’ble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. [2011 (10) TMI 201 - KARNATAKA HIGH COURT] where it was held that when there is provisional assessment, the same is applicable to the entirety of the goods and to arrive at final duty liability, adjustments of duty excess paid against short payment will have to be made.
Conclusion - In cases of provisional assessment, adjustments of excess duty paid against shortfalls should be made in a consolidated manner, and the doctrine of unjust enrichment does not apply when the duty incidence has not been passed on. The Appellant was entitled to adjust excess duty payments and was not subject to the doctrine of unjust enrichment.
Appeal allowed.
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2025 (2) TMI 73
Interpretation of statute - Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, in conjunction with Section 4 of the Central Excise Act, 1944 - inclusion in the assessable value, cost of specifications provided by the manufacturer of the final products manufactured by the appellant and cleared to the manufacturer along with interest and penalty - invocation of extended period of limitation - 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 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.
It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between mere specification and detailed engineering drawing as considered in the earlier decision in Mangalore Refinery & Petrochemicals Ltd. Vs. CC, Mangalore [2012 (9) TMI 712 - CESTAT, BANGALORE], where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now rule 10(1)(b)(iv) of the 2007 Customs Valuation Rules).
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.
Appeal allowed.
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2025 (2) TMI 8
100% EOU - Cenvat credit on various input services under the Cenvat Credit Rules, 2004 - applicability of time limitation - appellant could not make oral submissions and make effective representation before the authority - violation of principles of natural justice - HELD THAT:- From the facts of this appeal, it appears that input services viz., Rent a cab, Personal insurance, Air Travel Agent's services, Business Auxiliary Services, Commercial or Industrial Construction Services, Information Technology Software Services, etc. were not allowed by the Revenue for availment of Cenvat credit of the service tax paid on the ground that these were not related to the manufacture of their final products. These services appear to be activities forming part of the Appellant’s manufacturing business. However, the Appellant has not furnished any reply to the Show Cause Notice dated 04.09.2014 issued and not attended the personal hearing granted by the Original Adjudicating Authority.
The Appellant has reversed the credit voluntarily in respect of Rent-a-Cab service and also on personal insurance service which is not interfered with.
Conclusion - i) The definition of 'input service' prior to 01.04.2011 included activities related to business, requiring examination of eligibility based on this definition. ii) The burden of proof regarding Cenvat credit eligibility lies with the claimant. iii) Interest and penalties are not applicable if Cenvat credit is merely taken and not utilized, subject to verification.
The impugned Order-in-Original passed by the Commissioner of Central Excise, Puducherry cannot be sustained and so ordered to be set aside by way of remand. The Appellant is directed to produce all the relevant documents on the basis of which they have taken the Cenvat credit on various input services. It need not be reiterated that while adjudicating the issue of eligibility of the Cenvat credit on various input services as above strict observance of the principles of natural justice have to be complied with - appeal allowed by way of remand.
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