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Central Excise - Case Laws
Showing 21 to 40 of 81787 Records
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2025 (3) TMI 1134
Refund of unutilized CENVAT credit - closure of factory - rejection of refund on the ground that there was no export clearance made by the appellant - HELD THAT:- Since the appellant does not export the goods refund of CENVAT credit shall be allowed as he does not fullfill the conditions above. Further due to the absence of exports ‘the ratio of export turnover to the total turnover’ cannot be determined.
The Honorable Supreme Court UNION OF INDIA & ORS. VERSUS VKC FOOTSTEPS INDIA PVT LTD. [2021 (9) TMI 626 - SUPREME COURT] held that, refund is not a constitutional right but a statutory right and therefore, the legislature, in its wisdom, and through statute, can decide how the refund is to be granted.
The judgment of the Hon’ble Bombay High court in GAURI PLASTICULTURE [2019 (6) TMI 820 - BOMBAY HIGH COURT], discusses the legal issues and the judgments cited by the appellant, comprehensively. It thus merits to be followed. Thus, it is concluded that rule 5 of CCR read with N/N. 05/2006-CE(N.T.), as it then stood, i.e. prior to 01.04.2011, does not permit the refund of credit which is not on account of the export of goods. Section 11B(2)(c) of CEA is to be read with the rules or notification issued under the Act, and would hence necessarily involve Rule 5 of CCR and N/N. 05/2006-CE(N.T.). The refund claim of the appellant has thus been correctly rejected in the impugned order.
Conclusion - The legal framework, as interpreted by the relevant precedents, did not support the appellant's claim for a refund of unutilized CENVAT credit in the absence of export activities.
Appeal dismissed.
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2025 (3) TMI 1133
Process amounting to manufacure or not - activities of cutting / slitting of H.R. Coils, etc. - applicability of C.B.E.C. Circular No. 811/08/2005-CX. dated 02.03.2005 - procedure laid down in Rule 3(4) (b) of the CENVAT Credit Rules, 2004 followed or not - non-imposition of penalty under the provisions of Rule 15(1) of CENVAT Credit Rules, 2004 - Extended period of limitation - suppression of facts or not.
Process amounting to manufacture - HELD THAT:- The Respondent are engaged in cutting/slitting of H.R.Coils and conversion of the same to M.S. Plates. The said process does not amount to manufacture. Since the process does not amount to manufacture, the Respondent took recourse of Rule 16 of the Central Excise Rules, 2002, i.e. they used to bring the H.R. Coils under Rule 16(1) of the said rules and availed CENVAT Credit in terms of the said rules. After the conversion i.e., cutting/slitting of the goods, the resultant products, i.e. M.S. Plates were removed by debiting an amount as prescribed under Rule 16(2) of the said rules. This procedure adopted by them was known to the Department as the said procedure was advised by the jurisdictional Assistant Commissioner.
Extended period of limitation - suppression of facts or not - HELD THAT:- There is no suppression of facts with intention to evade the duty established against the Respondent in this case. Hence, the ld. adjudicating authority has rightly held that the extended period is not invocable in this case and dropped the demand raised in the notices by invoking extended period of limitation.
Non-imposition of penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 - HELD THAT:- In the instant case, the Respondent has paid an amount equal to the credit taken while clearing the goods after processing. The Department has accepted the equal amount of credit paid by the Respondent under Rule 16(2) of the Central Excise Rules, 2002.
In a catena of decisions it has been held that though the process does not amount to manufacture, credit on inputs cannot be denied as the manufacturer paid duty on the final products.
The Respondent has rightly availed credit on the inputs and paid an amount equal to the credit taken at the time of clearance of the goods as provided under Rule 16(2) of the Central Excise Rules, 2002. Thus, we observe that the allegation of irregular availment of credit against the Respondent does not survive. Once, the credit availed by the Respondent is found to be regular, there is no irregularity in utilising the same to discharge the payment as per Rule 16(2) of the Central Excise Rules. Since the availment of credit and subsequent utilisation of the same for paying the amount as per Rule 16(2) of the Central Excise Rules,2002 are found to be regular, no penalty imposable on the Respondent. Consequently, there are no infirmity in the impugned order passed by the Ld. adjudicating authority.
Conclusion - The duty paid by the appellants has been accepted by the department which is admittedly more than the CENVAT credit availed by the appellants. The appellants are not required to reverse the credit.
Appeal of Revenue dismissed.
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2025 (3) TMI 1098
Clandestine manufacture and removal - MS ingots - recovery of incriminating records, seizure of one pen drive, one computer and a hard disk and various other incriminating documents - existence of corroborative evidence or not - admissibility of the printed material under Section 36B of CEA - Mandatory complaince with Section 9D by the Adjudicating Authority or not - non-compliance with the mandate of Section 9D(2) be raised at the Appellate Stage when not raised before the Adjudicating Authority - electronic evidence collected admissible given the absence of certificate issued under Section 36B(4) or not - HELD THAT:- Both S.14 and S.9D of the CE Act are pari-materia with S.108 and S.138B of the Customs Act respectively and therefore judicial pronouncements in respect of these provisions of Customs Act, 1962 would also hold good for the pari-materia provisions of Central Excise Act, 1944.
A three judge bench of the Honourable Supreme Court, in K. I. Pavunny v Asst.Collr.(H.Q).,C.Ex.Collectorate, Cochin, [1997 (2) TMI 97 - SUPREME COURT], had an occasion to consider whether the confessional statement of the appellant therein, given to the Customs officers under Section 108 of the Customs Act, 1962 (for short, the `Act’), though retracted at a later stage, is admissible in evidence and could form basis for conviction and whether retracted confessional statement requires corroboration on material particulars from independent evidence.
The Supreme Court in Ram Bihari Yadav vs. State of Bihar [1998 (4) TMI 578 - SUPREME COURT] itself has observed that more often than not, the expressions 'relevancy and admissibility' are used as synonyms but their legal implications are distinct and different from for more often than not facts which are relevant are not admissible; so also facts which are admissible may not be relevant, for example questions permitted to put in cross examination to test the veracity or impeach the credit of witnesses, though not relevant are admissible. The probative value of the evidence is the weight to be given to it which has to be judged having regards to the fact and circumstances of each case.
Since the adjudicating authority has not followed the mandate of Section 9D (2) in the instant case and had not given an opportunity to the affected party to make submissions post intimation of his intent to rely on such materials duly stating the reasons why he intends to arrive at the said opinion. We are therefore of the considered view that the adjudicating authority has grossly erred in placing reliance on the statements recorded under Section 14 without following the mandate of Section 9D of the CEA. The reliance placed by the adjudicating authority on all these untested statements cannot sustain. This has rendered the case of clandestine removal made against the appellants wholly unsustainable on this ground alone.
Whether the electronic evidence collected during investigation in this case, is admissible given the absence of certificate issued under Section 36B? - HELD THAT:- Given that the Adjudicating Authority, despite noticing the protestations of the appellants regarding noncompliance of Section 36B (4), and even after the law was laid down in P.V. Anvar’s case [2014 (9) TMI 1007 - SUPREME COURT], yet chose not to cure the same, we refrain from embarking on this course of remand as it would tantamount to affording a second opportunity that was undeserved, not to mention the prolongation of the litigation, which the appellants do not deserve. Moreso, since it is conscious that there are balance the rights of the parties before us, and such conscious non-compliance by the adjudicating authority has to be considered adversely to the detriment of the Revenue and the benefit thereof should then enure to the appellants.
The ‘standard of proof’ denotes the level of conviction or the ‘decisional threshold’ that enables the court to decide whether the party who shoulders the burden of proof has discharged the same. In customs and excise matters, where the assessee can be visited with financial penal consequences, Courts have always tried to apply a qualified preponderance of probabilities standard - The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility.” Thus, while the general standards of proof for civil cases are the preponderance of probability and the standards for criminal cases are beyond reasonable doubt, these standards have also been eschewed in favour of “clear and convincing evidence” when the allegations are of more serious nature and also attract heavy financial consequences.
Having detailed some of the lacunae and shortcomings in the investigation supra as well as the standard of proof required to be adduced by Revenue in clandestine removal matters as aforementioned, we shall now deal with the evidence relied upon qua each of the demands confirmed in the impugned order and examine whether the evidence relied upon meet the standard of “clear and convincing evidence”, to establish the case of clandestine removal and to establish the availment of cenvat credit without actual receipt of inputs.
The Department has not let in any evidence in the form of unaccounted procurement of the other raw materials required for manufacture of MS Ingots, evidence of their procurement, evidence of the quantum of fuel/ electricity, labour etc., used, the examination or test evaluation of the production capability and capacity of the Appellant’s factory etc.
There are no quarrel with the proposition of the Authorised representative in his contention that as per Section 61 of the erstwhile Evidence Act, 1872 it is necessary that the contents of a document has to be proved either by primary or secondary evidence and that the evidence of the contents contained in a document is hearsay evidence unless the writer thereof is examined before the court and further that as per section 67 of the erstwhile Evidence Act, 1872, the signature or handwriting of the person alleged to have signed the whole or part of the documents has to be proved. These contentions are precisely in tandem with our findings supra on the manner in which the adjudicating authority has to evaluate the statement under Section 14 for its relevance as per the mandate of Section 9D(2). However, the reliance placed by the authorised representative on Section 36A (1) and 36A(2) are misplaced in that these presumptions would apply only in a proceedings before the Court, being rebuttable presumptions. However, unlike Section 9D (2) or Section 36B which deems a document to be admissible in any proceedings under the Act when accompanied with the certificate mandated under Section36B(4), Section 36A does not permit the presumption to be drawn in adjudicatory proceedings under the Act and is confined only to Court proceedings.
There is no justification available, either in the show cause notice, or in the impugned order, to explain the absence of statements of most relevant persons or the reasons for delay in conducting follow up searches. The transporters, who actually transported the goods, have also not been questioned. In short, the investigation has failed to establish the allegations raised in the show cause notice and the findings of the adjudicating authority are also decidedly untenable in the light of discussions regarding the lack of demonstrable, reliable and corroborative evidence.
Conclusion - The finding of the adjudicating authority that the main appellant has indulged in clandestine manufacture and clearances of MS ingots during period February 2010 to February 2012 and the consequent demand of duty made is untenable; the demand of cenvat credit availed for the period February 2010 to May 2010 by the main appellant terming it ineligible, is incorrect; the demand made on M/s. SKSRM for clearances of TMT Rods alleged to have been cleared without payment of duty and allegedly made out of MS ingots procured from the main appellant without payment of duty, as confirmed in the impugned Order in Original, is untenable and consequently the penalties imposed on the appellants are unsustainable.
Appeal allowed.
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2025 (3) TMI 1059
100% EOU - duty not paid properly on DTA clearances - it is alleged that the appellant needs to pay CVD on Tariff Rate and not on Effective Rate as per Notification No.01/2011 dated 01.03.2011 - liability to pay interest and penalty thereon - HELD THAT:- A 100% EOU must meet the following conditions : (i) that the unit must be a 100% EOU as defined under Chapter 6 of the Foreign Trade Policy (FTP); (ii) the unit must have obtained the necessary permissions and approvals from the relevant authorities. In this regard, Notification No. 52/2003-Central Excise (NT) outlines the concessional Excise Duty rates applicable to EOUs. Further, clearance of goods into Domestic Tariff Area under Paragraph 6.8 of the Export and Import Policy shall be allowed only when the unit has achieved positive Net Foreign Exchange Earning.
Further, the DTA clearances of finished goods covered under GST, EOUs are required to pay CGST/SGST/UTGST/ IGST, as the case may be, besides payment of whole of the Duty of Customs specified under the First Schedule to the Customs Tariff Act, 1975 (BCD) availed as exemptions on inputs used in manufacture of such finished goods. In respect of DTA clearances of finished goods covered under Fourth Schedule of the Central Excise Act, 1944, the EOUs would be required to pay Central Excise Duty equal to the aggregate of Duties of Customs in terms of proviso to Section 3(1) of the Central Excise Act, the effective rate of such duties being covered by Notification No. 23/2003 – CE, which has also been amended by Notification No.16/2017 – CE dated 30.06.2017. In other words, the excisable goods are liable to effective excise duty as it existed before GST.
It is clear that the EOUs are generally eligible for a concessional rate of excise duty on goods cleared to the DTA, with rates determined based on the effective rate of CVD applicable to similar imports.
Conclusion - The appellants were entitled to discharge CVD on the effective rate of duty as envisaged under N/N.01/2011-CE dated 01.03.2011.
Appeal allowed.
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2025 (3) TMI 1058
SSI Exemption - clubbing of clearances of three firms - M/s. Meena Fire Works Industries, M/s. Meena Fire Works, and M/s. Meena Sparklers should be treated as a single manufacturer under section 2(f) of the Central Excise Act, read with para 2(v) of Notification No.8/2003-CE. or not - denial of cross-examination of the investigating officer by the adjudicator - demand with penalty - delay in adjudication.
HELD THAT:- As per condition (v) and (vii) of para 2 of the exemption notification No.8/2003-CE dated 01-03-2003, there ought to be a manufacturer who has a factory or factories, the clearances of which are to be taken in aggregate for determining the exemption in the event of a manufacturer having clearances from more than one factory. Therefore, for the purposes of clubbing of clearances it is an imperative prerequisite that one unit is identified or determined as the principal entity to which the clearances from the other units or factories then get clubbed and the proposal for demand is then required to be raised on the said principal entity. Evidently, the attempt of the Department here is to deny the benefit of exemption notification individually to the three units, as the Department is of the view that the three brothers have indulged in subterfuge of maintaining separate units while exercising financial and managerial control over all the three.
This Tribunal in Amit Talwar v CCE, Delhi-I [2018 (5) TMI 667 - CESTAT NEW DELHI] has held that it is well-settled that demand cannot be made jointly and severally.
The lack of clarity in determining the ‘manufacturer’ from whom the demand of duty in the event of clubbing of clearances ought to be made and non-identification of any such principal entity and instead embarking on proposing a demand on a department mooted ‘group of persons comprising of the three brothers’ / ‘group of firms’ comprising of the three firms, neither of which proposal has any legal basis in the provisions of Central Excise Act, 1944 or the Rules made thereunder, indicates the indelible taint of non-application of mind that permeates the entire proceedings right from conceptualisation of the demand in the SCN to the confirmation of the demand in the impugned order in original. Such an attempt of foisting a fictional financial entity onto the appellants and pegging a demand thereon, is devoid of any legal backing and vitiates the proceedings in toto.
Since the lacunae of lack of clarity in demand exists in the demand proposal in the SCN as well as its confirmation in the impugned OIO, it is a fundamental flaw that cannot be cured and the impugned order in original is liable to be set aside on this count alone.
Request of the counsel for the appellant for cross examination of the investigating officer and the officers before whom the statements were recorded was denied stating it will delay the adjudication proceedings - HELD THAT:- In the impugned proceedings, the Adjudicating Authority has not observed the mandate of Section 9D while admitting in evidence the statements given under Section 14 of the Central Excise Act, 1944 and has not deposed the deponents who had given such statements and where deposed and cross-examined has not stated any reason why the statements as originally deposed alone is to be relied on or in other words, the adjudicating authority has not given any reason for discarding the deposition made during cross-examination, such as that he is treating the witness as hostile or that the contradiction/inconsistencies are minor enough to be discarded.
The request of the appellant for cross examination of the Investigating Officer, after having given up his request for cross examination of the other Departmental Officer sought, cannot be said to be unreasonable. The denial of cross-examination of the investigating officer by the adjudicator is a violation of the appellant’s right in this regard as held by the Honourable High Court of Allahabad in CCE, Allahabad v. Govind Mills Ltd. [2013 (8) TMI 649 - ALLAHABAD HIGH COURT] and CCE Meerut I v R.A. Castings Pvt Ltd [2010 (9) TMI 669 - ALLAHABAD HIGH COURT].
Also, the appellant’s contentions on quantification of the duty demand have not been controverted by the Adjudicating Authority. Admittedly even the long note books relied for quantifying the alleged unaccounted removal contains entries only for the period from April 2007 to September 2009. Admittedly for the period from October 2009 to March 2010 there was no evidence available pertaining to unaccounted clearances and the show cause notice had proceeded to quantify the same adopting the average value of the preceding year’s clearances, that is clearance from October 2007 to March 2008 and October 2008 to March 2009 to arrive at an average value of clearances per day and then to presumptively quantify the unaccounted clearance for the period October 2009 to March 2010, as is evident from the remarks in the column in the worksheet at Annexure C(i) and para 15.3 of the SCN at page 84-85. Similarly, for the period 2010-11 and 2011-12 the show cause notice has not even an iota of evidence to rely on for determining the quantification of the alleged clandestine removals.
In the instant case the evidence adduced is woefully inadequate, much less ‘clear and convincing evidence’. Apart from the reliance placed on the statements, which is determined as inadmissible, the information found in the long and small note books and other records at best would prima facie create a strong doubt about the unaccounted manufacture and clearance of fireworks and sparklers - mere indication of credit entries is of no avail without any explanation as to the nature of such credits. The SCN alleges that the appellants had deposited Rs.17,00,000/- in TMB and such entries were touted as indication of profit earned out of illicit transactions. The appellant in its reply at para 18.8 has categorically rebutted the same stating that no such deposit was made and in evidence enclosed letter dated 24.03.2012 of the Manager of the said Bank and contended that such wrong averments were made to prejudice the mind of the adjudicating authority. In fact, the adjudicating authority has not controverted the categorical rebuttals of these entries which the appellant has stated is misplaced. The reconciliation statement in respect of the bank accounts provided along with the reply to substantiate their defence was also not controverted by the adjudicating authority.
Delay in adjudication - HELD THAT:- The decision of this Tribunal in Kopertek Metals Pvt Ltd [2024 (12) TMI 269 - CESTAT NEW DELHI], which turns on the peculiar facts and circumstances of that case, cannot be construed as laying down a blanket proposition that any delay in adjudication beyond the time limit prescribed under sub-section 11 of Section 11A of the Central Excise Act would automatically result in the impugned order being vitiated for non-adherence to the time limit stipulated, dehors an examination of the facts and circumstances or insurmountable exigences which made it impracticable for the adjudication to take place, as has been held by the Delhi High Court in Swatch Group [2023 (8) TMI 864 - DELHI HIGH COURT].
Conclusion - i) The finding of the Adjudicating Authority that M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers are to be treated as one single manufacturer manufacturing and clearing fireworks from their factories in terms of section 2(f) of Central Excise Act read with para 2(v) of the Notification No.8/2003-CE dated 01.03.2003 as amended, is wholly untenable and cannot sustain. ii) The finding of the Adjudicating Authority that the value of clearances of fireworks including sparklers manufactured and cleared from M/s. Meena Fire Works Industries, M/s. Meena Fire Works and M/s. Meena Sparklers during the period 2007-08 to 2011-12 should be clubbed together in terms of para 2(v) of the Notification No.8/2003-CE dated 01.03.2003 as amended to determine the aggregate value of clearances for demanding duty from the said three firms, is wholly untenable and cannot sustain.
Appeal allowed.
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2025 (3) TMI 1057
Process amounting to manufacture or not - activities undertaken at the Central warehouse, where the activity of packing, re-packing and labelling was carried out by the appellant - demand of excise duty on re-packed spare parts on the ground that these goods were parts of motor vehicles (automobiles) and these parts were covered under Sl. No.100 of the Third Schedule to the Central Excise Tariff Act, 1985 - HELD THAT:- The issue involved in this appeal was decided by the Larger Bench of the Tribunal in ACTION CONSTRUCTION EQUIPMENT LTD. [2023 (6) TMI 1320 - CESTAT MUMBAI (LB)]. The present appeal is also covered by such order of the Larger Bench.
On careful reading of the decision given by the Larger Bench of the Tribunal on the disputed issues, it is found that the amendment carried out w.e.f. 29.04.2010 makes it abundantly clear that a legislature did not intend to tax the parts, components and assemblies of earthmoving equipment etc. under the Head “Automobiles”; therefore, to this extent, the adjudged demands for the period prior to 29.04.2010 cannot be sustained.
Further, it is a fact on record that Third Schedule to the Central Excise Tariff Act, 1985 was retrospectively amended vide Finance Act, 2011 read with Finance Act, 2012, with effect from 29.4.2010. Accordingly, from 29.4.2010, the appellant started discharging the excise duty on activity of packing / re-packing and affixing MRP undertaken on spare parts at warehouse, on the basis of MRP-based assessment. This was also confirmed by the jurisdictional Commissioner of Central Excise, Nagpur vide their letter dated 07.01.2014 submitting therewith the verification report dated 30.12.2013 received from the Assistant Commissioner of Central Excise Division-II, Nagpur that the appellant is discharging the Central Excise duty on MRP basis.
In finally answering the issues on which reference was made to Larger Bench, on account of difference of opinion between two Co-ordinate Benches of the Tribunal and based on the direction given by the Hon’ble Supreme Court, it was held 'The amendment made in the Third Schedule to the Central Excise Tariff Act by Finance Act, 2011 w.e.f. 29.04.2010 by adding serial no. 100A to the Third Schedule is prospective in nature.'
Thus, on the basis of the decision given by the Larger Bench, it is concluded that the adjudged demands for the period October, 2006 to 28.04.2010 is not sustainable.
Conclusion - i) The term "automobile" should be interpreted based on common parlance and dictionary definitions rather than definitions from other statutes. ii) The activities undertaken by the appellant did not amount to "manufacture" for the relevant period, and the classification of the parts as "automobiles" was not applicable. Therefore, the excise duty demands were not legally sustainable.
Appeal allowed.
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2025 (3) TMI 964
Condonation of inordinate delay of 546 days in filing the appeal - sufficient cause for delay or not - HELD THAT:- It is not in dispute that the appellant’s appeal before the CESTAT was dismissed on merits on 27-7-2016 and it is also not in dispute that appeal under Section 35G of the Act of 1944 was preferred by the appellant only on 23-6-2018, whereas the appeal has to be preferred within 180 days from the date of communication of the order to the aggrieved party. As such, it is filed with an inordinate delay in filing the appeal i.e. 546 days and the reason assigned in the application is only and only that Tax Case No.59/2011 was pending before this Court in which the question of law involved in this appeal is also required to be adjudicated and once it has been adjudicated by this Court in Tax Case No. 59/2011 on 13-9-2017, the appeal came to be filed.
In this regard, the legal position pertaining to the question whether while considering the plea for condonation of delay, the Court can look into the merits of the matter, is well settled and recently it has been held so by their Lordships of the Supreme Court in the matter of H. Guruswamy and others v. A. Krishnaiah since deceased by LRs [2025 (1) TMI 1524 - SUPREME COURT] in which it has been held that while considering the plea for condonation of delay, the court must not start with the merits of the main matter, and observed as 'While considering the plea for condonation of delay, the court must not start with the merits of the main matter. The court owes a duty to first ascertain the bona fides of the explanation offered by the party seeking condonation. It is only if the sufficient cause assigned by the litigant and the opposition of the other side is equally balanced that the court may bring into aid the merits of the matter for the purpose of condoning the delay.'
The appellant was required to prefer appeal immediately after the impugned order dated 27-7-2016 was communicated to him. Even after the judgment in Tax Case No. 59/2011 was passed on 13-9-2017, he took more than nine months’ time to file appeal. Therefore, no cause much less sufficient cause has been shown for delay in filing the appeal.
Conclusion - The appellant has shown sufficient cause for condoning the delay of 546 days in filing the appeal, the delay cannot be condoned.
Appeal dismissed.
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2025 (3) TMI 963
Dismissal of appeal on the ground of being time barred - HELD THAT:- A careful perusal of Section 35 (1) of the Central Excise Act would show that the Central Excise Officer is required to communicate the order to the person aggrieved for the purpose of providing a remedy to the person adversely affected by the order and thereby limitation would commence from the date of communication. However, the word “communication” used in Section 35 (1) has not been defined in the Central Excise Act or the rules made thereunder, therefore, the same deserves to be interpreted by applying the rule of contextual interpretation and keeping in view the language of the relevant provisions.
In the matter of Kubic Darusz v. Union of India and others [1990 (1) TMI 78 - SUPREME COURT], their Lordships of the Supreme Court while dealing with communication of grounds of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act), held that “communicate” is a strong word. It requires that sufficient knowledge of the basic facts constituting the grounds should be imparted effectively and fully to the detenu in writing in a language which he understands, so as to enable him to make a purposeful and effective representation.
A careful perusal of Section 37C (1) of the Central Excise Act would show that any decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be served, also by speed post with proof of delivery to the person for whom it is intended or his authorised agent, if any; if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof, to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended; and if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice. Sub-section (2) of Section 37C provides that every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post.
Section 37C of the Central Excise Act, which provides the manner of serving the copy of decision or order, it is quite vivid that the purpose of communicating the order to the person aggrieved, in this case, the appellant herein / assessee, is for the purpose of enabling him to prefer an appeal against the adjudicating order before the Commissioner (Appeals), as only 60 days time has been provided from the date of communication to prefer appeal and the Commissioner (Appeals) is empowered only to condone the delay of further 30 days and thereby, after 90 days from the date of communication, no further jurisdiction has been conferred to the Commissioner (Appeals) to condone the delay. There is complete exclusion of Section 5 of the Limitation Act as held by the Supreme Court in Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT].
As per showing of the appellant, once he is communicated with the copy of adjudication order by e-mail on 27-7-2018, he would be justified in preferring appeal on 25-9-2018 before the Commissioner (Appeals), which is within the period of limitation of 60 days from the date of communication of the order, as the appellant was actually communicated with the order on 27-7-2018. As such, the Commissioner (Appeals) has committed grave legal error in holding the appeal to be barred by limitation and that it has been filed beyond the period of 60 days from the date of communication of the order. The CESTAT has also committed legal error in perpetuating the illegality committed by the Commissioner (Appeals) by dismissing the appeal holding it to be barred by limitation by affirming the order passed by the Commissioner (Appeals).
Conclusion - The limitation period for filing an appeal under Section 35(1) of the Central Excise Act begins from the actual or constructive communication of the order to the aggrieved party. The requirement for proof of delivery under Section 37C is essential for establishing the commencement of the limitation period.
The substantial question of law is answered in favour of the assessee and against the Revenue. The matter is remitted to the Commissioner (Appeals) for adjudicating the appeal on its own merit in accordance with law, expeditiously, as the appeal is old one and required to be decided expeditiously.
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2025 (3) TMI 962
Levy of Excise duty - sale of Ziking (slag), a by-product of the manufacture of Silico Manganese - clearance of Ziking has been ascertained on the basis of documents available in the laptop and pendrive recovered from Shri Mahesh Paswan - admissible evidence or not - alleged shortage of stock of Silico Manganese - it is the contention of the appellants that the stock taking was done on eye estimation basis - Penalty.
Levy of Excise duty - sale of Ziking (slag), a by-product of the manufacture of Silico Manganese - HELD THAT:- In this case, the fact which is not in dispute is that this Ziking (slag) emerges during the course of manufacture of the final product, which may be a low grade Silico Manganese. However, it is a fact on record that Ziking (slag) is a by-product and not the final product manufactured by the appellant. In these circumstances, reliance placed on Monnet Ispat and Energy Ltd. [2016 (8) TMI 543 - CESTAT NEW DELHI] where it was held that 'It is an admitted fact that Silico Manganese slag and Ferro Chrome slag emerge involuntarily during the course of manufacture of the final product. Since, the appellant had no intention to manufacture slag, the same, in my opinion, should not be considered as excisable goods. Since the slag seized to the excisable goods, the question of dutibility or exemption does not arise. Therefore, the embargo created in Rule 6(3) of the Cenvat Credit Rules, 2004 for payment of amount equal to 5%, 6% or 10% of the value of exempted goods has no application in the circumstances of the present case.'
It is found that the issue as to whether a by-product is liable to duty has been examined by the Tribunal at Bangalore in the case of Haryana Steel and Power [2015 (11) TMI 771 - CESTAT BANGALORE] wherein it was held 'amendment in Section 2(d) will not change the scenario inasmuch as the manufacture of waste, refuse, scrap, etc., cannot be considered to be manufactured items in terms of Section 2(f) of the Central Excise Act.'
Since Ziking (slag) is a by-product which emerges during the course of manufacture of the final product, the same is not liable to duty - Further, the said clearance of Ziking has been ascertained on the basis of documents available in the laptop and pendrive recovered from Shri Mahesh Paswan, which are not admissible as evidence, on the basis of which substantial demand has also been dropped by the ld. adjudicating authority - demand not sustainable.
Alleged shortage of stock of Silico Manganese - HELD THAT:- It is found that for such a huge quantity, not much time was spent during physical verification of the stock and stock taking was done only on eye estimation basis. Merely on eye estimates, shortage of stock cannot be alleged. In view of this, on the said shortage, the demand of duty is not sustainable against the appellants - the impugned order qua confirmation of demands of duty of Rs.23, 52, 292/- on sale of Ziking (slag) and Rs.6, 42, 584/- on account of alleged shortage of goods set aside.
Penalty - HELD THAT:- As no demand is sustainable against the appellant, no penalty is imposable on the appellants.
Conclusion - i) Since Ziking (slag) is a by-product which emerges during the course of manufacture of the final product, the same is not liable to duty. ii) Merely on eye estimates, shortage of stock cannot be alleged. iii) As no demand is sustainable against the appellant, no penalty is imposable on the appellants.
Appeal allowed.
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2025 (3) TMI 961
Prayer to remand the issue to be heard on merits by the Lower Appellate Authority - Valid service of notice or not - non-intimating the vacation of the registered premises to the department - HELD THAT:- The Appellant has only pleaded to remand the matter to the lower appellate authority for deciding the case on merits. The Ld. Counsel has relied upon the decision of the Hon’ble Supreme Court in the case of Saral Wire Craft Pvt. Ltd. Vs. Commissioner of Customs, Central Excise and Service Tax and Others [2015 (7) TMI 894 - SUPREME COURT] wherein it was held that the order served on an unauthorized person has inevitably led to miscarriage of justice and the specific language of Section 37C(a) of the Act requires that an order must be tendered on the concerned person or his authorized agent, in other words, on no other person to ensure efficaciousness.
In the present case, the Order-in-Original No. 23/2016 (AC) dated 15.11.2016 passed by the Assistant Commissioner of Customs, Central Excise and Service Tax, Salem against which the party has belatedly filed the appeal and which was sent to the earlier leased factory was received by the appellant only on 26.10.2017 and the appellant has filed the above appeal without any further loss of time on 17.11.2017. As such, the appeal has been filed in time as there is no compliance with the provisions of Section 37C of the Act and as there is evidence that the copy of the order was served on some other person or servant working in erstwhile company wherein the name was not even mentioned cannot be treated as service of the order.
Considering that the Appellant had vacated the premises before the issuance of the Order-in-Original dated 15.11.2016, it is considered appropriate to direct the lower authority to decide the Appellants’ appeal on merits. The order to be passed shall be a reasoned order dealing with all submissions of Appellant in strict compliance of the principles of natural justice. It is clarified that this order would not absolve the petitioner from its liability to pay taxes, if any.
Conclusion - The service of the Order-in-Original is invalid, and the appeal was not time-barred. The matter is remanded to the lower appellate authority to be decided on merits, ensuring compliance with principles of natural justice.
The prayer of the Appellant to remand the issue to be heard on merits by the Lower Appellate Authority is allowed.
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2025 (3) TMI 960
Extension of benefit of exemption N/N. 67/1995-CE dated 16.03.1995 as amended for captive consumption of molasses used in manufacture of Ethyl Alcohol/ Rectified spirit - HELD THAT:- The issue is no longer res integra. Hon’ble Supreme Court in the matter of Dharani Sugars & Chemicals Ltd. [2022 (3) TMI 274 - SC ORDER] and Tribunal in appellant’s own case vide Final order No. 20879 – 20886/2023 dated 25.08.2023 [2023 (8) TMI 1318 - CESTAT BANGALORE] has set aside the demand, holding that rectified spirit which is not used for human consumption is nothing but ethyl alcohol and is finding place in tariff item No. 2207 20 00.
Conclusion - Ethyl Alcohol and Rectified Spirit are excisable goods under Tariff Item No. 2207 20 00, and the exemption notification applies accordingly.
Appeal allowed.
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2025 (3) TMI 959
Levy of Central Excise Duty on the subsidy received from the Government of India in relation to sale of their product Urea, which is being sold as per the regulated price declared by the Government of India - HELD THAT:- The issue regarding leviability of Central Excise Duty on subsidy amount given by the Government to the fertiliser company is clearly explained by the Board vide Circular No.983/7/2014-CX, wherein, inter alia, it was clarified that in respect of fertiliser for which subsidy is provided by the Government, Excise Duty will be chargeable on the MRP and not on the subsidy component provided by the Government.
It is also noted that this clarification was issued in view of department issuing SCNs relying on the judgment of Hon’ble Supreme Court in the case of CCE, Mumbai Vs Fiat India Pvt. Ltd. [2012 (8) TMI 791 - SUPREME COURT]. In the SCN, the Adjudicating Authority also relied on the same judgment for drawing her conclusion that subsidy is in the nature of additional consideration, therefore, liable to Central Excise Duty. Therefore, it is obvious that the Government has clarified the leviability of Central Excise Duty in respect of subsidy provided by the Government to the fertiliser company.
Even a plain reading of the statutory provisions of section 4 would indicate that when price is not the sole consideration, recourse can be taken to Valuation Rules i.e., Rule 6, to add the additional consideration. However, this additional consideration must flow from the buyer to the seller either directly or indirectly. In this case, Government of India is not the buyer and therefore, the subsidy given by the Government of India cannot be considered as additional consideration flowing from buyer to the seller directly or indirectly. Therefore, the subsidy is not leviable to Central Excise Duty.
Conclusion - i) Subsidies provided by the Government for fertilizers, as per policy measures, do not constitute additional consideration for the purpose of excise duty valuation. ii) The transaction value should not include amounts not received from the buyer or on behalf of the buyer.
Appeal allowed.
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2025 (3) TMI 958
Calculation of Central Excise Duty - inclusion of freight charges in the transaction value for charging Central Excise Duty - suppression of facts or not - levy of penalty.
Inclusion of freight charges in the transaction value for charging Central Excise Duty - HELD THAT:- There is some ambiguity as regards nature of Purchase Orders (P.O.) which throw some light whether the sale was meant for ex-works or it was on FOR basis. It is obvious that in view of the judgments cited by the learned AR in the case of sale on FOR basis, both the judgments, Roofit Industries [2015 (4) TMI 857 - SUPREME COURT] and Ispat Industries Ltd [2015 (10) TMI 613 - SUPREME COURT], held that such amounts are required to be added to the assessable value. However, if the sale was ex-works then relying on the judgment of Ispat Industries Ltd, the same would not be included.
It is a matter of fact, which has not been brought out clearly in the impugned order and therefore, it needs to be remanded back to the Original Adjudicating Authority, who shall examine all the relevant documents to be provided by the appellant to come to the conclusion whether sale is exworks or ex-factory and thereafter, based on the other observations in the earlier para, decide whether the amounts of freight and insurance can be added to the transaction value or otherwise. Since both types of sale could be there, he would have to redetermine the demand amount.
Imposition of penalty under Rule 25(1) of Central Excise Rules read with section 11AC(c) of the Central Excise Act - element of fraud or collusion or any wilful misstatement or suppression of facts exists or not - HELD THAT:- There is no positive evidence on record suggesting that the appellants have deliberately chose not to pay Excise Duty on freight charges and suppressed any information with intent to evade the payment of duty. Therefore, the penalty invoked in terms of section 11AC(c) of the Act is not sustainable.
Conclusion - i) The matter required further factual determination and the case remanded for re-examination by the Original Adjudicating Authority. ii) Penalty invoked in terms of section 11AC(c) of the Act is not sustainable.
Appeal allowed by way of remand.
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2025 (3) TMI 957
Benefit of the Small Scale Industry (SSI) exemption under N/N. 8/2003-CE - applicability of amendment to Notification No.8/2003- CE dated 01.03.2003 vide Notification No.47/200-CE dated 01.09.2008 - extended period of limitation - HELD THAT:- As per the SSI Notification as amended, packing materials namely printed cartons of paper or paper board, metal containers, high density polyethylene woven sacks, adhesive tapes, stickers, pilfer proof caps, crown corks, metal labels, bearing brand name/trade name of another are exempted. Since the Adjudication authority has held that the goods manufactured by the Appellant are falling under the above category, there is no reason or justification to deny the very same benefit as per the Notification No. 24/2009-CE(NT) dated 21.10.2009, for the period from 01.04.2006 to 31.08.2008.
There is a strong force in the contention raised by the Appellant that the Adjudication authority has invoked the extended period of limitation without considering the facts and circumstances in the present matter. There is no allegation of suppression of facts and demand was confirmed only on the ground that appellant has not paid excise duty for the relevant period. Moreover, longer period cannot be invoked when issue involved is interpretation of the complex provision of law as held in the matter of M/s NRC Ltd Vs. CCE, Thane-I [2006 (12) TMI 12 - CESTAT, MUMBAI]. Further the Hon’ble Supreme Court in the matter of M/s Cosmic Dye Chemicals Vs. CCE, Mumbai [1994 (9) TMI 86 - SUPREME COURT] held that intention to evade duty must be proved for invoking the proviso to Section 11A for extended period of limitation.
Conclusion - i) The appellant's goods, specifically packing materials, were eligible for SSI exemption under the amended Notification No. 8/2003-CE. This exemption applied for the entire period in question, from April 2006 to August 2009, as clarified by subsequent notifications. ii) The extended period of limitation could not be applied without evidence of intentional evasion of duty.
The entire demand is unsustainable on merit as well as on limitation - Appeal allowed.
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2025 (3) TMI 956
Process amounting to manufacture or not - activities undertaken at the Central warehouse, where the activity of packing, re-packing and labelling was carried out by the appellant - demand of excise duty on re-packed spare parts on the ground that these goods were parts of motor vehicles (automobiles) and these parts were covered under Sl. No.100 of the Third Schedule to the Central Excise Tariff Act, 1985 - HELD THAT:- The issue involved in this appeal was decided by the Larger Bench of the Tribunal in M/s. Action Construction Equipment Ltd, Shri P.K. Bansal, Shri Vijay Agarwal, Commissioner of Central Excise, M/s. JCB India Ltd., Tata Hitachi Construction Machinery Co. [2023 (6) TMI 1320 - CESTAT MUMBAI (LB)]. The present appeal is also covered by such order of the Larger Bench.
On careful reading of the decision given by the Larger Bench of the Tribunal on the disputed issues, it is found that the amendment carried out w.e.f. 29.04.2010 makes it abundantly clear that a legislature did not intend to tax the parts, components and assemblies of earthmoving equipment etc. under the Head “Automobiles”; therefore, to this extent, the adjudged demands for the period prior to 29.04.2010 cannot be sustained.
Further, it is noted that the respondents-assessee have paid Central Excise duty for the period post 29.04.2010, and such duties paid have also been appropriated by the Department vide Order-in-Original dated 13.07.2012. Thus, there is no dispute in this regard for the period post 29.04.2010, which is required to be examined in this case. Moreover, Larger Bench has deliberated on the issue whether the earthmoving equipment etc. can be considered as automobiles in the case of respondent-JCB India Ltd. itself.
In finally answering the issues on which reference was made to Larger Bench, on account of difference of opinion between two Co-ordinate Benches of the Tribunal and based on the direction given by the Hon’ble Supreme Court, it was held 'The amendment made in the Third Schedule to the Central Excise Tariff Act by Finance Act, 2011 w.e.f. 29.04.2010 by adding serial no. 100A to the Third Schedule is prospective in nature.'
Thus, on the basis of the decision given by the Larger Bench, it is concluded that the adjudged demands for the period October, 2006 to 28.04.2010 is not sustainable.
Conclusion - i) The term "automobile" should be interpreted based on common parlance and dictionary definitions rather than definitions from other statutes. ii) The activities undertaken by the appellant did not amount to "manufacture" for the relevant period, and the classification of the parts as "automobiles" was not applicable. Therefore, the excise duty demands were not legally sustainable.
Appeal allowed.
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2025 (3) TMI 955
Appropriate valuation method for the clearance of excisable goods by the appellant - inter-connected undertaking - applicability of Rule 8 & 9 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000 or under Rule 10 ibid? - HELD THAT:- Section 40A of the Income Tax Act, 1961 deals with ‘Expenses or payments not deductible in certain circumstances’. This sub-section (1) to Section 40 ibid provides the powers for the Assessing officer of income-tax, when he determines that any expenditure is excessive or unreasonable and beyond the legitimate needs of the business or profession of the assessee, then he may disallow such deduction. The name of the persons on whom such expenditure had been incurred need to be mentioned at sub-section 40A(2)(b) ibid. There is no provision under which mentioning the names of a legal person(s) under the Income Tax Act, would enable such persons to be automatically treated as ‘related person’ under the Central Excise law. In the absence of specific determination of the relationship between the appellant and the inter-connected undertaking, being related to each other in terms of Section 4(3) of the Central Excise Act, 1944, there are no merits in the impugned order insofar as it has treated the transaction between these two, as related party transaction without following the due process of law laid down under Central Excise statute. Therefore, there do not exist sufficient grounds to claim that the valuation of impugned goods shall be done on the basis of Rule 8 & 9 ibid, as held in the impugned orders.
The interconnected undertakings are also related person. However, as per Rule 9 of Central Excise Valuation Rules, 2000, it is clear that Rule 9 ibid shall apply only when the goods are sold through person as specified under sub-clause (ii), (iii) or (iv) of clause (b) of Section 4 of the Act. Further, proviso of Rule 9 also suggests that merely because buyer is interconnected undertaking that alone is not sufficient for holding as related person. It is nowhere discussed in the impugned order or any evidence produced by the authorities below to state that the appellant and their interconnected undertaking are related in terms of the above provisions of the Central Excise statute. Therefore, on this ground alone the impugned order is liable to be set aside and it does not stand the scrutiny of law.
In the case of Gajra Gears Private Limited [2015 (2) TMI 1090 - CESTAT NEW DELHI], the Co-ordinate Bench of the Tribunal has held that valuation of goods between inter-connected undertaking shall be determined as prescribed under Rule 10.
It is further found that in the case of Commissioner of Central Excise, Nagpur Vs. Ramsons Casting Private Limited [2016 (12) TMI 908 - CESTAT MUMBAI], the Co-ordinate Bench of the Tribunal has held that in the absence of evidence, even if two companies are operated as ‘interconnected undertakings’, they cannot be treated as ‘related person’ for valuation purpose and the transaction value cannot be rejected.
Conclusion - The valuation should be conducted under Rule 10, not Rule 8 & 9, as the appellant and M/s Ujjawal Ispat Private Limited were not related persons under the relevant legal framework.
The impugned order is set aside and the appeal is allowed.
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2025 (3) TMI 954
Non-reversal of CENVAT Credit on Furnace Oil used in the manufacture of both dutiable as well as exempted goods - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- With regard to applicability of the provisions of Rule 57CC ibid and Rule 6 of the Rules of 2001/2002/2004, it is found that the issue was highly contentious and there were divergent views expressed by the different judicial forums. Finally, the dispute was resolved by the Hon'ble Supreme Court in the case of Gujarat Narmada Valley Fertilizers Co. Ltd. [2019 (12) TMI 430 - SUPREME COURT] where it was held that 'What is clear is that the exception to sub-rule (1) which is contained in sub-rule (2) itself contains an exception, namely, inputs intended to be used as fuel. This being the case, the moment it is found that inputs are intended to be used as fuel, such inputs go outside the ken of sub-rule (2) of Rule 6. When this happens, the exception contained in sub-rule (2) does not come into effect at all as a result of which sub-rule (1) must be applied on its own terms.'
On careful reading of the said relied upon judgment, it is found that the Hon'ble Supreme Court have distinguished the contents in both the Rules i.e. sub-rule (1) and sub-rule (2) of Rule 6 ibid. Since sub-rule (2) of Rule 6 ibid has not dealt with the input i.e., ‘fuel’, in order to maintain separate records by the assessee, it was held that as per the provisions of sub-rule (1) of Rule 6 ibid, the assessee is required to reverse the CENVAT Credit availed on fuel used in or in relation to manufacture of the exempted goods. It is an admitted fact on record that the appellants had reversed the CENVAT Credit on pro-rata basis in respect of the Furnace Oil used for manufacture of the exempted final product.
The appellants have contended that non-reversal of CENVAT Credit, involving the extended period of limitation, was owing to the reason that there was no element of suppression of facts, mis-statement etc., with intent to evade the government revenue. In this context, learned Advocate appearing submitted that with regard to Rule 57CC ibid and Rule 6 ibid, the issues were highly contentious and there were divergent views expressed by different judicial forums. Thus, he contended that the charges of suppression, mis-statement etc., cannot be levelled against the appellants, justifying invocation of extended period of limitation, prescribed under Rule 57(1) ibid and Rule 14 ibid, read with Section 11A of the Central Excise Act, 1944 - The submissions made by the learned Advocate for the appellants agreed upon, that the charges of suppression, mis-statement etc., cannot be fastened on the appellants inasmuch as they had maintained proper records to demonstrate the actual quantity of Furnace Oil used in the manufacture of the exempted goods and the said particulars were also furnished by them before the jurisdictional Central Excise authorities under the cover of their letter dated 05.05.2000.
The demand, if any, should be calculated with respect to the normal period prescribed under Section 11A ibid.
Since the appellants had averred that in the letter dated 24.08.2012, they had intimated the jurisdictional Central Excise authorities regarding reversal of MODVAT/ CENVAT Credit availed by them, the matter should be remanded to the original authority for the limited purpose of verification of records to ascertain the accuracy of the submissions made by the appellants regarding reversal of MODVAT/CENVAT Credit by them.
Conclusion - The appellants had sufficiently reversed the CENVAT Credit on a pro-rata basis and maintained proper records. Matter remanded to the original authority for the limited purpose of verification of records to ascertain the accuracy of the submissions made by the appellants regarding reversal of MODVAT/CENVAT Credit by them.
Appeal disposed off by way of remand.
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2025 (3) TMI 953
Calculation of Exicse duty - inclusion of freight and insurance charges in the assessable value for the purpose of determining central excise duty when the sale is conducted on a "FOR basis" (Free on Road/Free at Destination) - HELD THAT:- It is an admitted fact that appellants were showing, ex-works price and freight and insurance charges separately on their invoices. However, it is also an admitted fact that as per purchase order, the delivery was “free at destination”. Therefore, even though they might be recovering these freight and insurance charges separately by way of reimbursement at a later date, it would not affect the terms of the purchase order which is apparent from plain reading of the purchase order. Further, merely because they have paid the VAT on ex-works value that in itself cannot become the basis for payment of central excise duty on the ex-works value. Therefore, in this case, as apparent from the terms and conditions and various submissions made, sale is on FOR basis.
Much emphasis has been laid on the judgment of Hon’ble Supreme Court in the case of Ispat Industries [2015 (10) TMI 613 - SUPREME COURT]. It is found that, in this case, the Hon’ble Court was dealing with a situation where the sale was ex-works and the issue was not concerning to FOR sale. Therefore, that case is distinguished on facts.
Conclusion - In FOR sales, the buyer's premises could be considered the place of removal, necessitating the inclusion of freight and insurance charges in the assessable value for excise duty purposes.
Appeal dismissed.
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2025 (3) TMI 899
Admissibility of benefit of N/N. 214/86-CE - activities conducted by the appellant qualify as "job work" or not - invocation of extended period of limitation - HELD THAT:- Admittedly appellant have used certain alloying elements when converting scrap into pure lead and leady alloys. The appellants, through an elaborate process, converted the used and defective batteries into scrap and thereafter, further converted it into pure lead and thereafter, again further converted it into lead alloys by using/adding certain elements like Antimony, Tin, Selenium, etc. It is also not in dispute that these three inputs are used by the appellant themselves and are not being supplied by the principal manufacturer.
The wordings of the notification has to be construed strictly, as has been held by the Hon’ble Supreme Court in the case of CC (Import) vs Dilip Kumar & Co. [2018 (7) TMI 1826 - SUPREME COURT (LB)]. On a plain reading of the explanation, which defines what constitutes ‘job work’, it would be obvious that all the inputs or semi finished goods are to be sent by the principal manufacturer and the activities are to be undertaken by the job worker, which may or may not amount to manufacture - Once, it is not considered as job work, there has to be payment of duty as there is no other notification available for exempting the same and the plea that ultimately the principal manufacturer would have paid the duty on the same would be of no consequence when the duty is required to be discharged at the stage where the said manufactured goods are cleared from the factory where they are manufactured.
Extended period of limitation - HELD THAT:- No substantive ground has been adduced by the appellant in support that there was a bonafide mistake or wrong understanding of the law - there is enough ground for the department to invoke extended period as there has been a deliberate suppression and misstatement of fact. Therefore, the extended period has been rightly invoked.
Penalty u/s 11AC and under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- Penalties are sustainable and upheld.
Conclusion - i) Substantial additions by a job worker disqualify activities from being considered job work under Notification No. 214/86-CE. ii) The demand for duty and the imposition of penalties upheld. iii) The extended period has been rightly invoked.
Appeal dismissed.
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2025 (3) TMI 898
Classification of quilt panel - can be classified under Central Excise Tariff Heading (CETH) 9404 90 19 as 'quilt' or should remain classified under CETH 5811 as 'quilted textile products'? - invocation of extended period of limitation - HELD THAT:- It is an admitted fact that the the 'quilt panel' manufactured by the Appellant are exclusively used for the manufacture of the final products 'coir mattress' and it is exempted from payment of customs duty. There is no evidence to show the marketability of the 'quilt panel' and it is also admitted fact that the 'quilt panel' manufactured by the Appellant are exclusively used for final product. Thus, considering the decision of this Tribunal in the matter of Collector of Central Excise, Jaipur Vs Meca Quilts Ltd [2000 (5) TMI 74 - CEGAT, COURT NO. IV, NEW DELHI], once the manufacturing is not complete, it cannot be considered as different marketable product, and no demand of duty can be confirmed.
Conclusion - i) The intermediate products used exclusively in the manufacture of exempted final products are not excisable if they lack marketability. ii) The extended period of limitation requires evidence of willful suppression or intent to evade duty.
Appeal allowed.
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