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Central Excise - Case Laws
Showing 201 to 220 of 81317 Records
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2024 (10) TMI 560
Refund of CENVAT Credit of CVD and SAD under GST regime for imports made prior to GST regime - Advance Authorisations Scheme - Non-fulfillment of export obligation within the prescribed time limit - refund was rejected only on the ground that the amount of CVD and SAD paid by the appellant after 01.07.2017 but for the period prior to 01.07.2017 is not eligible for Cenvat credit to the appellant - HELD THAT:- There is no dispute that the CVD and SAD was paid in respect to the imports made prior to GST regime i.e. before 01.07.2017 therefore any CVD and SAD was payable during the period prior 01.07.2017 was available as Cenvat credit. Merely because the payment was made after 01.07.2017 it will not lose the character of Cenvat credit in respect of such payment of CVD and SAD. Section 142 (3) and/or Section 142 (6) of the CGST Act, 2017 was created only to deal with the situation of the kind in the present case.
The appellant was clearly entitled for the Cenvat credit of CVD and SAD prior to 01.07.2017 but since the same was paid after 01.07.2017, they were not in a position to avail the Cenvat credit and utilize the same. Therefore the appellant is prima facie entitle for the refund of CVD and SAD being in the nature of Cenvat credit under Section 142 (3) and/or Section 142 (6) of the CGST Act, 2017.
All the impugned orders are set aside and appeals are allowed by way of remand to the adjudicating authority for processing the refund claim in accordance with law.
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2024 (10) TMI 504
Valuation of goods cleared to related entities - Seeking repudiation of the order of the first appellate authority in directing finalization of provisional assessment of M/s Dhariwal Industries Ltd on clearance of ‘Dhariwal Compound S&G’ - assessment of price of impugned goods being cleared to their related units - rule 8 of Central Excise Valuation (Determination of Value of Excisable Goods) Rules, 2000 - violation of principles of natural justice - HELD THAT:- It is apparent from the impugned order that the first appellate authority concluded that the original authority was required to proceed in accordance with rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and with the circular of Central Board of Excise & Customs (CBEC) supra. This was on a clear finding that transactions with unrelated persons did not exist for application in clearances to related person. It is seen from the order of the original authority that, despite having been furnished with costs sheet necessary for assessing the value as per rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, the original authority proceeded to determine otherwise for the year 2012-13. The principle of natural justice requires that any order to the detriment of an assessee must necessarily be preceded with a show cause notice to enable response to the reasons adduced for disallowance of their claim.
The original authority had proceeded on the assumption that transactions with unrelated persons existed and, therefore, sufficient reason to discard the CAS-4 statement furnished by the assessee. Impliedly, a favourable finalization was presumed by the assessee.
The interests of justice will be served by remanding the matter back to the original authority after upholding the setting aside of the order with the direction that the assessment be taken up for finalization after due notice to the assessee of non-entitlement for coverage under rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - appeal allowed by way of remand.
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2024 (10) TMI 503
Recovery of inadmissible CENVAT Credit on interest and penalty - input service or not - service tax paid on sales commission - Business Auxiliary Service - HELD THAT:- Undisputedly, the appellant who manufactures, inter alia, LPG gas stoves, entered into agreements / MOUs with various oil companies including BPCL would be sold through BPCL’s distributors and agreed to pay commission as stipulated in the said agreement. Since the commission paid to BPCL is leviable to service tax, appellant discharged service tax on the sales commission which they had later availed as credit being an input service.
On a plain reading of the definition of ‘input service’ , it is clear that advertisement or sales promotion service has been specifically included in the scope of the input service defined under Rule 2(l) of the CCR, 2004. Besides being a manufacturer of excisable goods, marketing expenses incurred till the date of delivery apparently sale of the goods as held by the Hon’ble Supreme Court in the case of UNION OF INDIA & ORS. ETC., ETC. VERSUS BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. [1983 (10) TMI 51 - SUPREME COURT] ought to be included in the assessable value of the goods for the purpose of payment of duty. Therefore, the commissions paid under the agreement / MOU for sale of their gas stoves through the distributors of BPCL definitely would fall within the scope of the definition of input service.
The service tax paid on the sales commissions is admissible as credit to the appellant. In the result, the impugned orders are set aside being devoid of merit - Appeal allowed.
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2024 (10) TMI 502
CENVAT Credit - input services used exclusively in the manufacture of the dutiable goods - required to be included in the numerator for apportioning the common credit between the exempted service (trading) and dutiable goods or not - Extended period of limitation - interest and penalty.
CENVAT Credit - HELD THAT:- This issue is no more res integra as it has been held that the CENVAT Credit, which pertains to input services exclusively used in dutiable goods, is not required to be included in the “total CENVAT Credit” for apportionment between exempted services and dutiable goods. It has been held that for apportionment of CENVAT Credit, only such credit which was availed on input service used commonly in exempted service and dutiable goods has to be taken into consideration.
In order to bring parity with the underlying objective of Rule 6, Rule 6(3A) of the Credit Rules was amended vide Notification No. 13/2016-CE (NT) dated 01.03.2016, effective from 01.04.2016, by substituting Rule 6(3A) (b)(ii) of the Credit Rules, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal - It is observed that such amendment in Rule 6(3A) by virtue of substitution was clarified by the Board vide TRU Circular No. 334/8/2016-TRU dated 29.02.2016, to apply retrospectively. The clarification clearly mentioned that the provisions of Rule 6 providing for reversal of Credit in respect of input services used w.r.t. exempted goods/services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit.
The modality adopted by the Appellant for reversal of credit on proportionate basis is in accordance with the provisions of Rule 6(3A). Hence, the impugned order by upholding the demand on incorrect understanding of provision is erroneous and not sustainable.
Extended period of limitation - HELD THAT:- There is no suppression of facts in the instant case. It is observed that the Appellant periodically intimated the department about their selection of option to reverse Cenvat credit under Rule 6(3A) of CCR. They have also intimated the department about the amount of credit reversed by them - Hence the department already had the knowledge of the said transactions. Moreover, mere fact that the dispute on eligibility of impugned credit is disputed by the department does not ipso facto mean the fact was suppressed - the extended period of limitation is not invokable.
Imposition of penalty - recovery of interest - HELD THAT:- Since the demand of Cenvat Credit itself is not sustainable, penalty is not imposable and consequently, no interest is also recoverable.
The impugned order is not sustainable and is accordingly set aside - Appeal allowed.
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2024 (10) TMI 501
Reversal of proportionate CENVAT Credit attributed to the trading goods - compliance with Rule 6 of CENVAT Credit Rules, 2004 regarding maintenance of separate accounts for dutiable and exempted goods - HELD THAT:- The demand of CENVAT Credit was raised which is equal to 6% of difference between the purchase price and sale price of trading goods in terms of Rule 6 (3). However, it is also not in dispute that the appellant have reversed the proportionate credit along with payment of interest. Therefore, after such reversal and payment of interest for the delayed period i.e. from the date of taking credit till the date of reversal of proportionate credit the demand equal to 6% under Rule 6 (3) shall not sustain as held in numerous Judgments.
Reliance can be placed in PI INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, SURAT-II [2023 (6) TMI 455 - CESTAT AHMEDABAD] and C.C.E. & S.T. -VADODARA-II VERSUS ALSTOM INDIA LIMITED [2022 (11) TMI 1070 - CESTAT AHMEDABAD] where it was held that 'the demand equal to 6% on the traded goods (exempted service) is not sustainable.'
The demand is not sustainable. Hence the impugned order is set aside - Appeal allowed.
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2024 (10) TMI 450
Interpretation of N/N. 115/86-CE dated 1.3.1986 - mandatory requirement or otherwise, for the assessee to maintain charge-wise register - eligibility for exemption - HELD THAT:- On perusal of the Notification, it refers to the granting of exemption from the excise duty on the vegetable products made from the indigenous cotton seed oil or any one or more of the other indigenous minor oil specified in the table annexed to the Notification or mixture of any one or more of such oil with any other oil, as stipulated therein on condition that such vegetable products for additional percentage point of increase in the use of the cotton seed oil in excess of 15% and in case of specified minor oil being 3% of the total oil used.
It emerges from the record that the appellant has used the cotton seed oil more than 15% per month. The Notification No. 115/86 came into effect from 1st March 1986 and the appellant has filed the refund claims for the months of March, April and May 1986 immediately after the Notification which are subject matter of these appeals and accordingly, filed the refund claims without understanding the process of calculation of percentage of usage of the cotton seed oil. However, the Assistant Commissioner of Central Excise, while sanctioning the refund, has applied the provisions of Explanation (3) and (4) of the Notification for the purpose of calculation of the use of cotton seed oil, which is found to be more than 15%, which entitles the appellant for the benefit of the Exemption Notification.
It is a trite law that exemption in a Notification cannot restrict the benefit of exemption. Explanation (3) and (4) which are invoked by the respondents authorities and confirmed by the appellate authority and the CESTAT only provide methodology of calculation of percentage as well as the percentage of usage of the cotton seed oil so as to see that such usage of cotton seed oil is more than in excess of 15% of the cotton seed oil used so as to grant the benefit of exemption of Rs.30 per ton of such vegetable products for additional percentage point of increase.
On bare perusal of the Notification, it is clear that there is no mandatory requirement to maintain the chargewise register as the Explanation (4) gives an option to the assessee for calculation either on the basis of the individual charge or on monthly basis. As the appellant has filed the refund claim per month, it goes without saying that the appellant has exercised the option on monthly basis and in absence of any specific requirement to file such option to claim the exemption under the said Notification. In such circumstances, the allegation that the appellant has failed to maintain individual charge for the usage of the cotton seed oil is without any basis.
The Tribunal has clearly erred in law in interpreting Notification No. 115/86-CE dated 1st March 1986 to read therein a mandatory requirement for the assessee to maintain charge-wise register, failure whereof would render the assessee not eligible to exemption - merely because the assessee has filed the refund claim on monthly basis without there being any individual charge basis, it is not mandatory for the appellant to maintain the charge-wise register to claim the benefit of the Exemption Notification No. 115/86 dated 1st March 1986.
Issue answered in favour of the assessee - Appeal allowed.
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2024 (10) TMI 449
Clandestine manufacture and clearance of goods - demand based on conjectures and surmises - lack of cogent evidence - violation of principles of natural justice - HELD THAT:- It is found that to build up its case, the Revenue has largely dwelt upon conjectures and surmises for instance the presumption that in a medium scale industry like that of the appellant “not a leaf moves without the nod from the higher authority”. However, such blanket statements lead nowhere to uphold clandestine manufacture and clearance of finished goods. It is also noted that the sale invoices clearly indicate that the sale of the goods was made ex-factory. The department has not repudiated the assssee’s contention that the delivery of the goods was taken by the broker of M/s. Industrial Associates (buyer) at the factory gate itself.
The reliance placed by the learned adjudicating authority to build up this case for mention by way of indication of wrong vehicle registration numbers on the invoices, was in the context of the recipient of the finished goods (page 56) and to make out by way of analogy a case of clandestine clearance and saddling the manufacturer with consequences thereof is completely uncalled for. This is more so when receipt of raw material, capability to manufacture and clearance of goods have not been doubted upon. As the department has not been able to establish the alleged clandestine movement of the finished goods and dispute the duty paid on the impugned goods, that are a subject matter of the present appeal, there can be no case for re-demanding the same along with interest. To hold such serious charges of clandestine clearance, no case can be made out merely on circumstantial evidence.
The appellants have sufficiently been able to establish that they received duty-paid material from their factory at Kodarma, which fact again is not disputed and manufactured finished goods therefrom which were sold from the factory gate. Goods procured from their sister unit were at times sold as such from their Durgapur unit but were largely used to produce finished goods by way of their own production at their Durgapur unit and finished goods so cleared upon payment of applicable rate of Central Excise duty and Cess. This sale is duly reflected in the returns filed for the relevant period with the department.
The fact that in as much as 28 cases out of 61 no discrepancy in recording of vehicle numbers have been noticed by the department, the fact of sale of goods being ex works and payments made through banking transactions, the receipt of raw material duly explained, the department not being able to substantiate the charge by way of any corroborative evidence, the department’s case stands on a weak footing having been built upon on presumptions and surmises.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 448
Levy of penalty - credit wrongly availed by the appellant but reversed along with interest when pointed out by Audit - intent to evade present or not - HELD THAT:- It is true that a legal procedure imposed by a statute requires the assessee to be not complacent and avail credit or discharge duty diligently. But to err is human. The presumption of innocence is a background assumption of our legal system. It is also true that deterrence is the main object behind the imposition of penalty which may be due to a breach of statutory duty like the wrong availing of credit or non-payment of tax under the Act. However, it is seen that the SCN and OIO have chosen to penalise the appellant not on the ground of a technical breach but that of duty evasion, when no such case is made out.
It is seen that Section 11A(6) states that in a case where duty is paid with interest before the issue of SCN penalty equivalent to 1% of such duty per month is to be calculated and paid from the month following the month in which duty was payable. The appellant has also in their prayer agreed to pay the same as was required to be done when they opted to reverse the credit and pay interest, before the issue of SCN.
While there has been a breach of statutory provisions in this case, there is nothing to show that there was an intention to evade payment of duty. This being so the wrong penal provisions have been invoked leading to a disproportionate penalty. The impugned order hence merits to be modified to that extend and the penalty limited to that payable as per section 11A(6) of the Central Excise Act, 1944.
The impugned order imposing equivalent statutory penalty is not proper. The impugned order is hence partly modified and the penalty is hence imposed in terms of sec. 11A(6) of the Central Excise Act, 1944 - Appeal allowed.
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2024 (10) TMI 447
Clandestine manufacture and removal - Gutka under the brand name GOA 1000 - incorrect mention of names of buyer in the invoices - contravention of Rule 11(2) of CER - denial of cross-examination of witnesses by the Commissioner - violation of principles of natural justice - penalties under Rule 25 and Rule 26 of the Central Excise Rules, 2002.
The case of Revenue is significantly based on the statements of various persons involved in one way or other with Yogesh, and Commissioner has given cross-examination of only 9 persons out of about 25 persons whose cross-examination was sought by Yogesh and out of 9 persons, cross-examination of only 2 deponents was conducted.
HELD THAT:- It is noticed that the goods by all these appellants are admittedly cleared on payment of duty. Non-mentioning name of buyers in the invoice is at best a procedural lapse in respect of the duty paid goods. In our view the goods which are alleged to have been removed by Yogesh without payment of duty can only be held liable for confiscation if it is established so, and not the goods in respect of which applicable duties are paid by these units as duty paid goods cannot be held liable to confiscation under Rule 25 of the Rules. It can be seen that Rule 25 is subject to non-payment of duty which is recoverable and subject to the provisions of section 11AC which is neither invoked or applicable in respect of goods cleared by the these units. It has been held in the following judgements that Rule 25 is subject to section 11AC and ingredients of Section 11AC have to be established first.
In the case of COMMISSIONER OF C. EX. & CUSTOMS VERSUS SAURASHTRA CEMENT LTD. [2010 (9) TMI 422 - GUJARAT HIGH COURT] the Hon’ble Gujarat High Court has interpreted provisions of Rule 25 and held that 'For the purpose of invoking Section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short-levied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any willful misstatement or suppression of facts. If these ingredients are not present, penalty under Section 11AC cannot be levied. Since Rule 25 can be invoked subject to the provisions of Section 11AC of the Act, as a natural corollary, the ingredients mentioned in Section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules.'
Since goods were cleared on payment of duty, the first condition of section 11AC which is non-payment of duty itself is not fulfilled and hence section 11AC is not invocable, consequently, goods are not liable to confiscation under Rule 25. In that view penalty under Rule 25(1) cannot be sustained on these appellants namely Balaji, Montage, Arihant and Sachin. Further, since the goods cleared by these units are not liable for confiscation under Rule 25, penalty under Rule 26 upon the partner/director/authorized person of these units namely Arun Joshi and Sushil kumar Upadhyay in the capacity of erstwhile partners of Balaji, Sunil Trivedi, partner of Balaji, Ramnivas Pareek authorized signatory of Balaji, Sunit Jain, partner of Arihant and Arvind Gupta, promoter/director of Montage of the above units are also liable to be set aside.
The impugned order is modified, as a result appeals of Montage, Balaji, Arihant and Sachin and their directors/partners/authorised persons namely Arun Joshi, Sushil Kumar Upadhyay, Sunil Trivedi, Ramnivas Pareek, and Sunit Jain are allowed and appeals of Yogesh and rest of the appellants are remanded.
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2024 (10) TMI 379
Availment of CENVAT credit on the goods which are not inputs and the same have been cleared as such - goods having relationship whatsoever with the manufacture of the appellant's final products or not - recovery with interest and penalty - extended period of limitation - levy of penalty - HELD THAT:- A manufacturer is permitted to avail credit of the duty paid on inputs, which are used in the manufacture of final product. In the instant case, it is noted that the appellant had availed credit on Aluminium Rod (Chapter 76), Aluminium Wire (Chapter 76) and PVC Compound (Chapter 39) during the Financial Year 2015-16, 2016-17 and 2017-18 (upto June, 2017). As the said goods were not inputs, the appellant was not eligible to avail the credit of the duty paid on such inputs - the impugned order has noted that Aluminium Wire, Aluminium Rods and PVC Compound was not declared as raw materials in Form B of the Central Excise Registration of the appellant - the appellant had incorrectly availed the credit of duty on goods which were not inputs for their final product.
The appellant should be given the opportunity to present all documentary evidences to substantiate their claim of having reversed the Cenvat Credit at the time of clearance of the Aluminium Rod, Aluminium Wire and PVC Compound at the time of clearance as such before the adjudicating authority, who will decide the matter afresh.
It is noted that the appellant has claimed that they have paid the interest liable for the period from the date of availment to the date of reversal. The impugned order has already appropriated the said interest amount. However, liberty is given to the appellant to produce documents and establish the correctness of the said interest amount paid and so appropriated.
The impugned order is set aside - appeal allowed by way of remand.
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2024 (10) TMI 378
Recovery of wrongly availed CENVAT credit of Service Tax paid on outward transportation charges from place of removal - recovery with interest and penalty - Department issued the Show Cause Notice on the basis of this data for this period on the basis of the data provided by them inclusive of credit taken against services other than GTA services vide their letter dated 23.03.2011 - HELD THAT:- The question whether this credit sought to be denied is in relation to services other than GTA services is a verifiable fact and needs to be verified from the records of the appellant. In respect of the amounts mentioned in column 5 of the table above matter needs to be remanded back to the original authority for rendering a finding after causing the verification of the records of the appellant.
Though Boards circular no. 97/8/2007-CX dated 23.08.2007, 988/12/2014-CX dated 20.10.2014 and 999/6/2015-CX dated 28.02.2015 were available at the time of adjudication of the show cause notices and when the matter was considered by the first appellate authority. However no findings have been recorded in the matter by referring to these circulars. Impugned order misdirects itself by recording that in terms of Rule 9 (5) burden to prove the admissibility of the Cenvat Credit was on the appellant and appellant failed to discharge the same. Such an approach was totally uncalled for and the appellant should have been asked produce the necessary documents for verification as per the above referred Board Circulars.
The matter needs to be remitted back to the original authority for consideration de novo of the issues involved in the light of Board Circulars and the documents which appellant will produce when called for.
The matter is remanded to the original authority for determination of the issue - appeal allowed by way of remand.
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2024 (10) TMI 325
SSI exemption under N/N. 8/2003-CE - use of brand name of others - factory is situated in a rural area - main contention of the learned counsel for the appellant is that the SSI exemption is available to them even if the goods are manufactured under the brand name as they are manufactured in a rural area and, therefore, are covered under Para 4(c) of the Notification - HELD THAT:- Para-4 of the notification denies the exemption in respect of specified goods bearing a brand name or trade name, whether they are registered or not of another person and further sets out the exceptions. The sub-clauses (a) to (e) of Para-4 enumerates various exceptions in which case even if the goods are bearing the brand name or trade name would be entitled to the exemption under the notification. Each clause is an independent clause which provides for specific exemption and, therefore, has to be dealt within the terms of the expressions used therein. Here, we are basically concerned with clause (b) and (c) of Para-4 as relied on by the Adjudicating Authority and the appellant respectively - The goods covered under clause (b) are not restricted to any particular area but only to the entitles specified therein whereas clause (c) restricts the exception only to rural area and hence, the two operates in different spheres and cannot be clubbed together for the purpose of interpretation.
Support drawn from the decision of the Apex Court in COMMISSIONER OF C. EX., TRICHY VERSUS RUKMANI PAKKWELL TRADERS [2004 (2) TMI 69 - SUPREME COURT], where the findings of the Tribunal that the exemption can be denied only if trade name or brand name is used in respect of the same goods, for which the trade mark is registered, were rejected observing that the Tribunal has done something, which is not permissible to be done in law.
Considering the different expression used in the clause (b) and (c) of para-4 of the Notification, the intention of the department in granting and restricting the exemption is evident and the law is settled that where the words used are simple and clear and there is no ambiguity, no further aid is required to interpret them. Secondly, the exemption notification has to be construed strictly within the four corners of the expression used in the notification - the appellant is entitled to avail the SSI exemption benefit under the provisions of Para-4(c) as their factory is located in a rural area and the benefit cannot be denied for the reason that they have been manufacturing the goods bearing the brand name i.e. “NOBLE”, “FITWELL” and “ZINDAL”, which belong to M/s.Nootan Polymers.
The appellant is entitled to avail the exemption under Para-4(c) of the notification, the impugned order deserves to be set aside - Appeal allowed.
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2024 (10) TMI 323
Compounded lavy scheme - Penalty u/r 26 of the Central Excise Rules 2002 - alleged contravention committed by SMFPPL of operating the Pan masala Packaging Machines differently from that declared by SMFPPL under Rule 6 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - based merely on statements of various persons - cross-examination of statements denied - violation of principles of natural justice - HELD THAT:- The entire case of the department is based merely on statements of various persons however, the cross-examination was denied by the Commissioner despite specific request to grant such cross-examination was made. Hence, no reliance can be placed on such statements as laid down in the following judgments that, as provided in Section 9D of the Central Excise Act 1944, a Statement of any person recorded under the said Act, shall be relevant in adjudication only when such person is examined in the adjudication proceedings.
The ground on which the Commissioner has imposed penalty on the Appellants does not satisfy the ingredients of Rule 26 of the Central Excise Rules 2002. It is an admitted fact that the Appellants were not made parties to Show Cause notice dated 9-9-2011, which proposed confiscation of the goods and imposition of penalty on SMFPPL. The Appellants were made party only to Show Cause Notice dated 31-8-2012 which demanded duty from SMFPPL by interpreting the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. This Show Cause Notice dated 31-8-2012 proposed imposition of penalty on the Appellants under Rule 26 of the Central Excise Rules 2002. As held by this Hon’ble Tribunal in Meenakshi Food Products (P) Ltd v CCE [2019 (7) TMI 904 - CESTAT AHMEDABAD], the said Rule 26 can apply only to a person who is involved in the clearance of goods by different ways enumerated under Rule 26, whereas in the present case, duty demand had been made on interpretation of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. There is no evidence and finding of the Appellants’ role in acquiring, possessing or being concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with exciseble goods with knowledge or reason to believe that the same were liable to confiscation under the Central Excise Act 1944 or the Central Excise Rules 2002. Therefore, imposition of penalty under Rule 26 is liable to be set aside - impugned Order imposing penalty upon the appellants, J M Joshi and Sachin J Joshi cannot be sustained. Therefore penalty imposed upon the appellants under Rule 26 is hereby set aside.
As regards, the appellant namely Vinayak Kashiram Sawant, the Director of SMFPPL, it appears from the records that he looked after Silvassa plant of SMFPPL, further Dilip Jani, Director of SMFPPL ,Gandhinagar has admitted that he was looking after production and clearance of goods at Gandhinagar factory. As such, it is found that he was not concerned with the activities of SMFPPL, Gandhinagar. In that view, penalty imposed upon him under Rule 26 is hereby set aside.
The appeals of JM Joshi, Sachin J Joshi and Vinayak Kashiram Sawant are allowed and appeal filed by Balraj Mourya is partly allowed.
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2024 (10) TMI 322
Classification of goods - mixtures of Melamine & Formaldehyde and Phenol & Formaldehyde - these products fall under Chapter 3909 or not - Applicability of area-based exemption under N/N. 50/2003-CE - HELD THAT:- This issue is no more res integra and this Bench of the Tribunal in the case of Samrat Plywood Ltd. cited [2024 (7) TMI 103 - CESTAT CHANDIGARH] decided the same issue involved in the present appeal, this Bench of the Tribunal in the case of Samrat Plywood Ltd. has considered this issue in detail and after considering the various judgments of the Tribunal has held that the mixture of aforesaid items used as glue/adhesive in the manufacture of laminates is classifiable under Chapter Heading 35.06 and not under Chapter 3909 and hence the exemption cannot be denied to them.
The impugned orders are not sustainable in law and therefore set aside - appeal allowed.
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2024 (10) TMI 321
Doctrine of merger - Jurisdiction - proper statutory authority to issue impugned order - Rule 6(2) of Pan Masala Rules, 2008 - Commissioner has not offered any comments on certain observations made in the earlier order made by his predecessor in respect of the same show cause notice - violation of principles of natural justice - HELD THAT:- In case of KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [2000 (7) TMI 67 - SUPREME COURT (LB)] Hon’ble Supreme Court has observed 'Once the superior court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, tribunal or the authority below.'
The observations made in the order set aside in appeal cannot be a ground for preferring the appeal - appeal dismissed.
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2024 (10) TMI 288
Clandestine removal - Confirmation of duty along with interest and imposition of penalty under section 11AC of the Central Excise Act, 1944 - imposition of personal penalty under Rule 26 - invocation of Extended period of limitation - HELD THAT:- There is no dispute about the authenticity of the records and who had maintained them. The only dispute is regarding how the shortage of WIP is interpreted. The appellant’s explanation is that it is due to dust of about 5% generated during the manufactured which it claims to have not accounted for and dumped on the roads because its sale value is low but this loss has already been taken into account in the WIP register and the shortage is after accounting for these losses. Since the raw material were already put through the process of manufacture the logical conclusion would be that the final goods were manufactured but lesser quantity was recorded in the final products register and duty was paid. The remaining quantity was not found in the factory. The shortage is also not of small quantity in the case of OUDH SUGAR MILLS LTD. VERSUS UNION OF INDIA [1962 (3) TMI 75 - SUPREME COURT] but in this case, of the 933 MT only 70 MT was found in stock.
There are no hesitation in upholding the decision of the impugned order that the appellant had removed the goods found short clandestinely and is liable to pay excise duty under section 11A invoking extended period of limitation along with interest and penalty under section 11AC.
Penalty on Shri Tekriwal - HELD THAT:- Rule 26 shows that the pre-requisite for imposing penalty under Rule 26 is confiscation of the goods and the person being concerned in any manner with such goods. In this case, the Commissioner dropped the proposal to confiscate the goods. Therefore, Rule 26 cannot apply.
Appeal disposed off.
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2024 (10) TMI 287
Wrongful availment of Cenvat Credit on various input services - C&F agents services - Rent of Bangalow - Rent of Office/Godown - Brokerage Charges and Maintenance & Repairs of Computers and Air Conditioners - extended period of limitation - Imposition of penalties, including Penalty under Rule 26(1) of the Central Excise Rules, 2002 imposed on Shri R.K. Gupta, appellant no.2.
Wrongful availment of Cenvat Credit on various input services - HELD THAT:- It is not in dispute that for the subsequent periods, two show cause notices dated 07.05.2015 and 08.06.2016 for the period 2014-15 and 2015-16 respectively on the basis of same audit objections, were decided by the ld. Commissioner on 27.07.2016 and Cenvat Credit of service tax paid on all the impugned services involved in the present case, was allowed. It is also found that the department has accepted the said order of the ld. Commissioner and has not filed any appeal against the said order, which is evident from the RTI reply provided by CPIO in respect of the status of the said order. Once the department has accepted the order of the ld. Commissioner for the subsequent period, then, in that case, the department cannot take contrary stands in proceedings on the same issue for the same assessee.
C&F agents services - HELD THAT:- The Commissioner for the subsequent periods, has discussed all the clauses of the Agreement between the appellant and C&F agents and has come to the conclusion that the services provided by the C&F agents to the appellant are ‘input services’ used in relation to the manufacture of the finished goods. This issue is decided in favour of the assessee.
Rent of Bangalow - HELD THAT:- This has been held as an input service as held in various cases.
Rent of Office/Godown - HELD THAT:- This has held to be input service in various decisions as well.
Brokerage Charges and Maintenance & Repairs of Computers and Air Conditioners - HELD THAT:- These services have also been held to be input services in various decisions.
Extended period of limitation - HELD THAT:- The demand is barred by time as the show cause notice was issued on 07.01.2011 for the period December 2005 to August 2010 without establishing the mala fide and suppression of facts on the part of the appellant as the appellant has been regularly filing the returns with full disclosure of the Cenvat Credit amount availed on the input services. Therefore, the invocation of extended period is bad in law as held in the case of GD Goenka Pvt Ltd [2023 (8) TMI 995 - CESTAT NEW DELHI].
Penalty under Rule 26(1) of the Central Excise Rules, 2002 imposed on Shri R.K. Gupta, appellant no.2 - HELD THAT:- The said penalty is not sustainable because the appellant no.2 was not dealing with the excisable goods.
The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed.
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2024 (10) TMI 219
Extinguishment of demand due to the non-filing of claims by the revenue during the Corporate Insolvency Resolution Process (CIRP) - HELD THAT:- The proceedings initiated against Ruchi Soya under the IBC are also a matter of record. Hence, from the aforementioned, it is clear that during the pendency of the appeal before the CESTAT, the proceedings under IBC against Ruchi Soya had commenced and also culminated with the acceptance of the modified resolution plan, consequent to which Patanjali has continued the business of Ruchi Soya, which is also forthcoming from the certificate dated 24.6.2022. It is further undisputed that the revenue has not made any claim before the IRP during CIRP process under the IBC - the revenue not having made any claim before the IRP during the CIRP process and the demand not having been part of the resolution plan, has stood extinguished and cannot be continued.
It is relevant to note that a Division Bench of the Gujarath High Court in the case of The Commissioner of Customs [2022 (8) TMI 1459 - GUJARAT HIGH COURT], while considering an appeal filed by the revenue in the case of Patanjali after noticing Section 32A of the IBC as well as the amended Section 31 of the IBC as also the judgment of the Hon’ble Supreme Court in the case of Ghanshyam Mishra [2021 (4) TMI 613 - SUPREME COURT] has held 'undisputed fact that the appellant has not lodged any claim in the capacity of the Operational Creditor before the Resolution Professional, this appeal is required to be disposed of as having become infructuous and abated with regard to any liability of any nature whatsoever having extinguished in view of the implementation of the Resolution Plan and change in management and control of the assessee in view of the provisions of section 31 and section 32A of the IBC.'
It is clear from Section 5 (26) of the IBC that the resolution plan is proposed by the applicant for continuing the business of the company as “a going concern”. It is forthcoming that under the Scheme of the IBC, Part II contemplates Insolvency Resolution and Liquidation for Corporate Persons. Chapter II in Part II contemplates Corporate Insolvency Resolution Process and Section 6 to Section 32A deals with the same. Chapter III in Part contemplates Liquidation Process and Section 33 to Section 54 deals with the same. Hence, it is clear that by a resolution process the company continues its business and only by a liquidation process, the business of the company would be wound up.
In the present case, the resolution plan in respect of the assessee having been accepted by the Tribunal, the question of the assessee being wound up does not arise. Hence, it is clear that Rule 22 of the 1982 Rules would not be attracted in a case where the resolution plan has been approved by the IBC. Hence, the Tribunal ex facie erred in holding that by virtue of Rule 22 of the 1982 Rules, the appeal would abate.
The substantial question of law is answered in favour of the assessee and against the revenue.
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2024 (10) TMI 218
Liability of respondent, M/s Afflatus International to pay service tax - manpower recruitment or supply agency - reverse charge mechanism - time limitation - Section 11B of the Central Excise Act, 1944 - HELD THAT:- The CESTAT has rested its decision on the consistent position struck by various High Courts on a payment of tax made under a mistake of fact or law. The High Courts have held that since there would be a complete lack of authority inhering in the appellant to demand a payment of tax, there would exist no justification for the amounts deposited being retained. It was further held in those decisions that consequently the period of limitation as otherwise raised in terms of Section 11B of the Act would be inapplicable.
There are no justification to take a contrary view. The appeal consequently fails and shall stand dismissed.
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2024 (10) TMI 217
Violation of circular No. 1058/07/2017-18 dated 16.05.2017 - proof of export under N/N. 45/2001-CE (NT) not accepted by the lower authority - requirement of quadruplicate copy of invoice for export - HELD THAT:- In the instant case the appellants have produced original and duplicate copies of invoice before the officer in charge of factory. However, they have failed to produce quadruplicate copy of invoice. From the procedure prescribed for export it is seen that the original, duplicate and quadruplicate copies of invoice all travelled the same route. The Duplicate copy of invoice always remains in the custody of revenue and is never in custody of exporter. The original and quadruplicate remain in the custody of exporter for most of the time. In this background this felt that duplicate copy of endorsed invoice is the most full proof evidence of export of goods and production of quadruplicate copy of invoice is only a supporting proof. In case the appellant has failed to produce quadruplicate copy of invoice, the revenue could have verified the facts from the port of export directly. There was no necessity of rejecting the proof of export on this account.
The production of original and duplicate copies of duly endorsed invoice is a sufficient proof of export. The board circular dated 16.08.2017 relied by the appellant points out that in view of the indo Bhutan agreement trade, commerce and transit, the payments can be received in Indian Rupees and there is no necessity of producing any certificate for receipt of payment in freely convertible currency as required under Notification No.45/1-CE (NT). In the background there is no necessity of producing any bank certificate regarding receipt of payment in freely convertible currency. Consequently, this ground also does not survive.
It is seen that the hydro electric Project for which goods has been exported entirely funded by India through norms with the facilities for payment in Indian rupees. In this circumstances the amendment although made on 16 August, 2017 i.e. after the export shall be deemed to be clarificatory in the nature.
Appeal allowed.
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