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Central Excise - Case Laws
Showing 221 to 240 of 81317 Records
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2024 (10) TMI 216
SSI Exemption - entire case is based on the determination of the rights to use brand name between the appellant and Prince Care Pharma Private Limited - penalty - HELD THAT:- It could appear that registration of the such deeds is not necessary when the facts are not in dispute. This issue has also been examined by Tribunal in the case of Que Pharma Pvt Ltd wherein relying on the decision of Hon’ble High Court of Madhya Pradesh in case of JEPIKA PAINTS VERSUS UNION OF INDIA [2008 (1) TMI 359 - HIGH COURT MADHYA PRADESH] benefit of small scale exemption has been extended in case of an unregistered assignment deed.
Merely because deed of assignment of brand name was not registered cannot be held that the appellant did not own the brand name. Consequently, benefit of small scale exemption cannot be denied.
The penalty imposed on Shri Sureshbhai Jivrajbhai Sakariya is also set aside and appeal is allowed - Appeal allowed.
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2024 (10) TMI 215
Seeking relief from the demand/recovery of duty and interest - provision made under the head “Inventory Procedure and Control” for non-moving items as well as obsolete goods without paying an amount equivalent to the CENVAT credit taken in respect of the capital goods - contravention of Rule 3(5B) of the CENVAT Credit Rules 2004 - HELD THAT:- As per Rule 3(5B) of the CENVAT Credit Rules 2004, as amended with effect from 01/03/2011, input or capital goods before being put to use, on which CENVAT credit has been taken is written off fully or partially or where any provision to write off fully or partially has been made in the books of account then the manufacturer or service provider, as the case may be, shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods.
Since the impugned period pertains to the period prior to 31/03/2012 there was no power to recover an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods provided for by law. This being so the order for recovery of CENVAT Credit along with interest during the impugned period was not correct and merits to be set aside.
A Division Bench of this tribunal in Ericsson India Pvt Ltd. [2019 (3) TMI 776 - CESTAT NEW DELHI] held that 'for reversal of cenvat credit on partial writing down of value of inputs, the provision was introduced only first time by amendment of Rule 3(5B) of Cenvat Credit Rules, with effect from 01.03.2011. Further, there was no provision prior to 01 March 2013 for recovery of cenvat credit and interest thereon under Rule 3(5B) etc. which was made applicable with effect from 01.3.2013 only, by virtue of Notification No. 3 of 2013-CE(NT) dated 01.03.2013. The notification provides that if the manufacturer of goods or the provider of output service fails to pay the amount payable under sub-rule (5), (5A) and (5B), it shall be recovered, in the manner as provided in Rule 14, for recovery of CENVAT credit wrongly taken.'
The impugned order merits to be set aside and is so ordered. The appellant is eligible for consequential relief if any as per law - Appeal disposed off.
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2024 (10) TMI 214
Compounded levy scheme - whether at the relevant time when the orders-in-original were passed in absence of any saving clause and omission of Section 3A of the Central Excise Act, 1944 read with Rule 96 ZO, ZP and ZQ of the Central Excise Rules, 1944 whether the orders-in-original passed by the adjudicating authority holding that the appellants are liable to pay duty as per the compound levy scheme? - HELD THAT:- In absence of the aforesaid provision and any saving clause the adjudicating authority had no statutory power to decide any matter related to compounded levy scheme in terms of Section 3A of Central Excise Act, 1944 and under the provision of Rules, 96ZO, ZP and ZQ of Central Excise Rules, 1944 for the reason that it is not only the issuance of show cause notices but entire proceedings such as adjudication of such show cause notices has to be governed by statutory provision and the said proceeding was envisaged under Rule, 96 ZO, ZP and ZQ. Once the said Rule was omitted w.e.f. 01.03.2001 thereafter, no provision exist by which the adjudication authority has any power to adjudicate the matter related to the compounded levy scheme in terms of Section 3A of the Central Excise Act, 1944. Therefore, the orders passed by the adjudicating authority are non-est and having no support of any authority of law. On this ground, the entire proceedings of show cause notices and adjudication there of gets vitiated.
It is settled that in absence of any saving clause while omitting the provision of Section 3A of Central Excise Act, 1944and Rules, 96 ZO, ZP and ZQ of the Central Excise Rules, 1944 adjudication order passed after 01.03.2001, the adjudication proceeding is not legal and correct, consequently no demand can be confirmed.
Since the Orders-in-original, itself are without authority of law, demand confirmed under the said orders-in-original cannot be sustained. Therefore, the impugned orders are not sustainable - Appeal allowed.
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2024 (10) TMI 145
CENVAT Credit - denial on the ground that the the Excise Duty collected from their buyers is required to be recovered under Section 11D of the Central Excise Act, 1944 - time limitation.
HELD THAT:- The appellant, though is primarily in the business of manufacture of SS Hose Assembly, Flange & Fittings, has also been carrying on the other business activities by way of procuring the MS Round, TMT Bars etc. After undertaking some work on them, was clearing the same to his buyers. On receipt of such materials under proper Excise Invoice from their vendors, they were taking the Cenvat Credit. At the time of clearance of these goods to their buyers, the entire Cenvat Credit taken was being reversed.
As a matter of fact, from the Show Cause Notice, it is seen that the demand is towards Cenvat Credit of Rs. 1,46,75,425/- and even for under Section 11D, the same amount has been demanded. It shows that the entire Cenvat Credit taken was properly reversed by them when the goods were cleared to their buyers. In such a case, it would be more in the nature of clearance of goods under Rule 3(5) of CCR, 2004 rather than clearance of finished goods - the Department had not raised any objection for the Excise Duty payments made towards such transactions being carried on by the appellant. Both Cenvat Credit taking and Cenvat debiting have been reflected by them in their ER-1 Returns. It is also not the case of the Department that the goods in question were not received by them in their factory or not accounted for by them in their Books of Account. The Appellant has produced documentary evidence to the effect that all the payments towards purchase of these items have been made through banking channels. In such a case, there are no justification on the part of the Revenue to confirm the demand by denying the Cenvat Credit taken.
Time limitation - HELD THAT:- There are considerable force in the appellant’s argument that the Show Cause Notice has been issued belatedly on 30/09/2013 while the transactions have taken place during the period 2008-10. All the transactions towards Cenvat taking and Cenvat debiting are part of the ER-1 Returns, which are also part of the relied upon documents to issue the Show Cause Notice. Therefore, no case of suppression has been made out against the appellant - the impugned order set aside even on account of time bar.
The appeals stand allowed both on account of merits as well as on account of time bar.
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2024 (10) TMI 144
Admissibility of credit of service tax paid - input service - place of removal - Goods Transport Agency Service [GTA] availed by the appellant for outward transportation of goods on Free on Road [FOR] destination basis from the factory gate or depot of the appellant to the premises of the customers - Rule 2 (l) of the Cenvat Credit Rules, 2004 - HELD THAT:- The appellant was selling their final products on FOR destination price and has paid the excise duty, which includes the freight also. The evidence placed by the appellant regarding FOR destination sales included the Marketing Circulars, Sales Contract/Agreement, Excise Invoice, Commercial Invoice, Lorry Receipts, Transporter’s Bills, Payment Details and Copies of the TR-6 Challans, etc. The invoices supported the submission that the ‘place of removal’ is customer’s premises and the same has been admitted by the Revenue in the show cause notice itself.
The functioning of the appellant was to the effect that the customer was charged only for the quantities received by them and in that regard, the transporter appointed by the appellant used to get the acknowledgement copy of the lorry receipts for having delivered the goods to the customers, therefore, the customer pays only for the quantity, which is actually received by him. This shows that the ownership of the goods was transferred at the customer’s premises and the appellant bore the risk of loss or damage to the goods during the transit to the destination till the goods finally reaches to the customer’s door step.
The High Court in AMBUJA CEMENTS LTD. VERSUS UNION OF INDIA [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT], therefore, decided in favour of the appellant that the transportation of the goods upto the customer’s premises would also be covered within the definition of “input service”.
No doubt, the said order of the Tribunal was passed when the Circular dated 23.08.2007 was in vogue and the definition of “input service” had been subsequently amended w.e.f. 1.3.2008. However, the final conclusion would remain the same in the present appeal in the light of the subsequent Circular No.1065/4/2018-CX dated 08.06.2018.
The impugned order is un-sustainable and needs to be set aside - Appeal allowed.
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2024 (10) TMI 143
CENVAT Credit - Goods Transport Agency services for outward transportation of goods - place of removal - period February 2016 to March 2017 - HELD THAT:- The credit of GTA services hinges on the term ‘Place of Removal’ under Section 4 of the Central Excise Act, 1944, the CENVAT Credit Rules, 2004 and the CENVAT Credit Rules, 2017. The same was examined by the Board vide Circular No.1065/4/2018-CX, F. No.116/23/2018-CX-3, 8th June, 2018 in the light of the following judgments of the Hon’ble Supreme Court in the case of CCE vs M/s Roofit Industries Ltd [2015 (4) TMI 857 - SUPREME COURT], CCE vs Ispat Industries Ltd [2015 (10) TMI 613 - SUPREME COURT], CCE, Mumbai-III vs Emco Ltd [2015 (8) TMI 200 - SUPREME COURT] and CCE & ST vs. Ultra Tech Cement Ltd [2018 (2) TMI 117 - SUPREME COURT], in order to bring clarity to the matter. At para 3 of the Circular, it was stated that the principle laid by the Hon’ble Supreme Court was that the place or premises from where excisable goods are to be sold can only be manufacturer’s premises or premises referable to the manufacturer.
As per the analysis of the various judgments by Board’s Circular dated 8.6.2018, in the case of consignments that have been sold on an FOR basis, where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, the benefit of CENVAT credit has to be extended to the seller on the basis of facts of the case and the ‘place of removal’ has to be recognized as the buyers premises.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 142
Eligibility for exemption under N/N. 04/2006 C.E. - denial of exemption on the ground that the 'imported acrylic re–processed granules (mix color)' was not covered under the `Waste' because as per Customs Tariff Act, 1975, all the waste, parings, and scraps are covered under Chapter Heading 3915 - HELD THAT:- The issue is no longer res-integra as exactly the same issue has been decided in the appellant’s own case INTERCONTINENTAL POLYMER PVT LTD VERSUS C.C.E. & S.T. -DAMAN [2023 (6) TMI 453 - CESTAT AHMEDABAD] where it was held that 'it is evident beyond the scope of any doubt that the imported plastics granules were nothing but waste and scrap of goods falling under Chapter 39. In the present matter we are of the considered view that imported goods have to be considered as waste &scrap of goods falling under Chapter 39 and entitled to above exemption. Hence we do not find any merit in impugned order.'
The impugned orders are not sustainable - Appeal allowed.
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2024 (10) TMI 141
Self-credit of differential amount - rejection of refund without following the procedure laid down under the N/N. 19/2008 - It is the case of the appellants that they have availed 100% credit in view of the decision of the Hon’ble High Court of Jammu & Kashmir in the case of M/S RECKITT BENCKISER VERSUS UNION OF INDIA AND OTHERS [2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT] - HELD THAT:- In cases where the appellant has taken self-credit in a wrongful manner, the inadmissible credit needs to be recovered, if not reversed by the assessee within the specified period as intimated by the authorities, as if it is a recovery of duty of excise erroneously refunded. In the instant case, it is not on record if the authorities have given any notice to the appellants to reverse the credit and whether any Show Cause Notice to recover the excess credit availed in terms of Section 11A of Central Excise Act, 1944. It is found that it is not legally correct for the Department to reject the same as a refund to be granted.
Hon’ble Apex Court in the case of CHANDRA KISHORE JHA VERSUS MAHAVIR PRASAD & ORS. [1999 (9) TMI 948 - SUPREME COURT] held that 'It is a well settled salutary principle that if a Statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner.'
If the law ordains the authority to do a particular thing in a particular manner, the authorities should do the thing only in the prescribed manner and not otherwise. In the instant case, Revenue having not followed the procedure prescribed for recovery of the alleged excess self-credit cannot reject the same. The appellants have already availed the self-credit and therefore, such an order rejecting the credit has no effect and cannot be implemented. Thus, the order becomes superfluous - the alleged wrongful credit has not been held to be so in a proper manner. Therefore, the rejection of cash refund of Rs.34,86,309/- for the month of July 2011 is not legally correct.
Out of the claim of refund of Rs.34, 86,309/-, the appellants shall be entitled for refund of an amount, as calculated in terms of N/N. 19/2008 - Appeal allowed.
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2024 (10) TMI 49
Recovery of wrongly availed as credit of service tax and cess - input service - GTA - Mediclaim premium - period from 2007-08 to 2010-11 (upto Feb/2011).
GTA Service - HELD THAT:- As per exclusion (BA) to the said provision only services of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle was excluded. The said definition also permitted credit of outward transportation upto the ‘place of removal’ when it related to activities relating to business. Further it was only from 01/04/2011, that the definition of the term ‘Input service’ given under Rule 2(l) of the CENVAT Credit Rules was substituted vide N/N. 3/2011-CE(NT) dated March 1, 2011, inter alia, deleting the phrase ‘activities relating to business’, thus, limiting the wide scope of the term ‘Input services’.
In CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [2010 (10) TMI 13 - BOMBAY HIGH COURT], the Hon’ble Bombay High Court, examined availing credit of service tax in the context of a manufacturing unit and had held that the definition of ‘input service’ is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product, during that relevant time.
Even post the amendment to the definition of the term ‘Input service’ given under Rule 2(l) of the CENVAT Credit Rules, a Larger Bench of this Tribunal in the case of M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] examined whether CENVAT credit on GTA services for outward transportation of goods from the factory to the buyer’s premises be denied in cases where the goods are sold on FOR (buyer’s premises) basis. The order held that the ‘place of removal’ whether at the factory premises or at the buyers premises has to be ascertained by applying the judgments of the Supreme Court in COMMISSIONER CENTRAL EXCISE, MUMBAI-III VERSUS M/S. EMCO LTD. [2015 (8) TMI 200 - SUPREME COURT] and COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT].
The invoice is on FOR destination basis and no separate freight charges are included in the invoice. In the circumstances stated the GTA services form a part of the cost of the goods and are activities relating to business which in terms of the CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., [2010 (10) TMI 13 - BOMBAY HIGH COURT] would make it an eligible input under the definition of ‘input services’ during the relevant time.
Insurance premium for personal insurance services - HELD THAT:- Larger Bench of the Tribunal in the case of M/S. RELIANCE INDUSTRIES LTD., VADODRA VERSUS COMMISSIONER CENTRAL EXCISE & SERVICE TAX (LTU) , MUMBAI [2022 (4) TMI 1357 - CESTAT MUMBAI (LB)] had examine the issue whether CENVAT credit could have been availed by the appellant on the Service Tax paid on insurance premium for availing medi-claim facility for employees who had opted for voluntary separation scheme, prior to 01/04/2011. It held that the scheme was an integral part of the ‘employee cost’ and forms a part of the final product and would certainly be entitled to CENVAT credit of such service.
The appellant was eligible for input credit on Service Tax paid for GTA and on insurance premium for personal insurance services, during the relevant time and the credit disallowed and demanded on the said services in the impugned order needs to be set aside along with the interest involved on the same and the penalty imposed and is so ordered.
Appeal disposed off.
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2024 (10) TMI 48
Admissibility of credit of service tax paid on Goods Transport Agency Service (GTA) availed by the appellant for outward transportation of goods on Free on Road (FOR) destination basis from the factory gate or depot of the appellant to the premises of the customers - HELD THAT:- The Revenue has not disputed that the cement is sold on FOR basis as per the allegations made in the show cause notice. Once the sale is on FOR destination basis, the ownership in the goods gets transferred only at the customer”s premises and, therefore, the present appeal needs to be allowed in favour of the appellant.
The appellant is entitled to avail the cenvat credit of service tax paid on “GTA Services” for outward transportation of cement on FOR destination sales from the factory/depot to the customer's premises in terms of Rule 2(l) of Cenvat Credit Rules, 2002 - The impugned order, therefore, deserves to be set aside - Appeal allowed.
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2024 (10) TMI 47
Clandestine clearances of their finished products - Copper wire/ bare Copper wire -Shortage of goods - demand solely on the basis of the statement of transporters and buyers without providing the opportunity of cross–examination and having disregard to the Section 9D of the Central Excise Act, 1944 - violation of principles of natural justice - HELD THAT:- It is found that the case of the department against the Appellant is that, appellant had received inputs without payment of duty and after processing it, sold their excisable goods without payment of duty clandestinely without preparation of Central Excise invoices and without accounting the same in daily stock account and without showing the same in their periodical returns from time to time. Revenue in support of above allegation relied upon the statements of Shri Sushil Kumar Agarwal proprietor of M/s. Shivani Metals and M/s. Somain Enterprises, Shri Pankaj Agarwal power of attorney Holder of M/s. Shivani Metals and Somian Enterprises, Shri Bupendra G. Patel factory manager of M/s Shivani Metal and various buyers and transporter. The entire proceedings have been initiated on the basis of statements of above persons.
The appellants have pleaded that the only opportunity of cross-examination of 3 person i.e. Shri Dwarkanath Khajuria, Shri Lal Bahdur Yadav and Shri Krishna Kumar (Transporters) was provided but the said witness did not appear. It is the case of the appellant that demand of duty has been confirmed by the Ld. adjudicating authority on the basis of the statements of transporters and other persons whose cross-examination have not been allowed. No other corroborative evidence is available on record but the statements which too have not been allowed to be examined.
The reasons assigned by the authorities below to reject cross-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee whose statements are to be relied by the Revenue without ascertaining the veracity in the absence of cross-examination. Therefore the said statements cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act.
It is also found that the allegation against the appellant in present matter is that they have procured unaccounted raw materials and cleared illicitly the clandestine manufactured finished goods without payment of duty, however in the present matter no efforts were made by the Revenue to reveal the truth by examining the manufacturing process to ascertain the raw material consumed and resulted output. Further no raw material supplier was produced by the revenue in the present matter. Therefore, the charge of clandestine removal of goods is not sustainable against the appellant.
As regard the demand of central excise duty of Rs. 60,789/- on the goods 2305.430 Kg. found short during the search and admitted by the staff Shri Bhupendra G Patel we find that the admission of shortage by the staff does not conclusively establish the charges of clandestine removal of goods. It is further found that there is no other corroborative evidence brought on record with respect to the allegation of clandestine removal of said goods, which is a serious charge and has to be proved beyond doubt as held by the Hon’ble High Court in the case of M/S. CONTINENTAL CEMENT COMPANY VERSUS UNION OF INDIA & OTHERS [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, LUDHIANA VERSUS M/S ANAND FOUNDERS AND ENGINEERS [2015 (11) TMI 1166 - PUNJAB & HARYANA HIGH COURT].
The charge of clandestine removal against the appellant could not be established by the revenue beyond doubt. Therefore the impugned order is not sustainable - the impugned order is set aside - Appeal allowed.
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2024 (10) TMI 46
100% Export Oriented Unit (EOU) - whether the exemption Notification No.06/2006-CE dated 01.03.2003 and Notification No.21/2012-Cus. dated 17.03.2012 are available on the inputs used in manufacture of Solar Module (Non-conventional Energy Device)? - eligibility for exemption from payment of SAD - exemption from payment of BCD in respect of Solar PV Glass and Edge Tape - demand for the period from 01.04.2009 to 30.04.2011 is barred by limitation - extended period of limitation.
HELD THAT:- In the present case, the appellant sought exemption on various parts procured locally as well as imported, used in the manufacture of Solar Module (non-conventional energy devices) at Sl. No.11 and 20 of the said List 5 against Sl. No.84 of List 5 of Notification No.6/2006-CE dated 01.03.2006. Sl. No.21 of List 5 allows exemption to parts consumed within the factory of production of such parts for the manufacture of goods specified at Sl. No.1 to 20 of the said List. Thus, it is very clear that the parts which are manufactured within the factory can be allowed when consumed in the manufacture of items mentioned at Sl. No.1 to 20. Also, the Tribunal in the case of M/s. Sova Solar Limited [2020 (7) TMI 485 - CESTAT KOLKATA] allowing the exemption for the parts manufactured and used within the factory of production, denied exemption to the parts procured from outside and used in the manufacture of goods specified at Sl. No.1 to 20.
This Tribunal in a similar set of facts and circumstances in Raydean Industries case [2022 (4) TMI 1155 - CESTAT NEW DELHI], the claim of the appellant that “Module Mounting Structures” whether could be considered as part of ‘Solar Power Generating System’. Sl. No.332 of the Notification No.12/2012-Cus. dated 17.03.2012 allowed Non-conventional Energy Device specified in List 8. The appellant claimed the parts as ‘Solar Power Generating System’ where a specific mention about the parts consumed within the factory and production of such parts for manufacture of the goods specified at Sl. No.1 to 20 has been prescribed.
The principle laid down by the Hon’ble Supreme Court in the case of M/s. Dilip Kumar and Co. [2018 (7) TMI 1826 - SUPREME COURT], the claim of the appellant that benefit of Notification No.6/2006-CE dated 01.03.2006 and No.12/2012-CE dated 17.03.2012 to the parts procured and used in the non-conventional devices or systems specified in List 5/List 8 of the respective Notifications, as the case may be, cannot be allowed and the Commissioner has rightly denied the benefit of the said exemption Notifications - Since the appellants are not entitled to avail benefit of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012, that is additional duty of Customs under Section 3 of Central Excise Tariff Act, 1975 (CVD) being leviable, therefore, the additional duty leviable under subsection 5 of Section 3 of the Customs Tariff Act, 1975 (SAD) cannot be extended to the appellant.
The appellant in para 15 of their written submissions made a specific claim about the benefit of exemption Notification No.25/1999-Cus. dated 28.02.1999 and Notification No.24/2005-Cus. dated 01.03.2005 on the goods used in the manufacture of solar cells / modules which are exempted from customs duty and therefore, the duty foregone at the time of import on such goods used in the manufacture of goods cleared by the appellant at ‘Nil’ rate of duty would any way be ‘Nil’. Thus, though there is a claim advanced by the appellant with regard to exemption under Notifications, which the Commissioner has not examined, hence to examine the said issue, the matter needs to be remanded.
Extended period of limitation - HELD THAT:- The issue relates to interpretation of admissibility of Notification No.6/2006-CE dated 01.03.2006 and Notification No.12/2012-CE dated 17.03.2012 as allowed to be claimed as an alternative plea by the Tribunal in the de novo proceedings, thus, there are no reason to invoke extended period of limitation.
The denial of benefit of exemption N/N. 6/2006-CE dated 01.03.2003 and N/N. 12/2012-CE dated 17.03.2012 and denial of benefit of exemption from SAD under N/N. 20/2006-Cus. dated 01.03.2006 and N/N. 21/2012-Cus. dated 17.03.2012 are upheld; differential duty with interest to be calculated for the normal period of limitation; penalty is set aside - Admissibility of exemption from BCD on Solar Photovoltaic Glass under of N/N. 25/1999-Cus. dated 28.02.1999 and No.24/2005-Cus. dated 01.03.2005 to be examined.
The matter is remanded to the Commissioner for computation of liability - Appeal disposed off by way of remand.
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2024 (10) TMI 9
Rejection of rebate claim of the petitioners against the export of goods - penalty imposed u/s 11AC of the Central Excise Act, 1944 read with Rules 25 and 27 of the Central Excise Rules, 2002 - limitation for issuance of the SCN - HELD THAT:- It is not in dispute that during the course of investigation it was found that the petitioners and other co-noticees have filed a rebate claim with forged documents like shipping bills and form ARE-I which is a mandatory requirement to claim the rebate claim - it is mandatory for the claimant to file original copy of ARE-I. The Form ARE-I is the export document which is prepared in quintuplicate five copies which are similar to erstwhile Form AR-4. Such Forms bear running Serial Numbers beginning from the first day of the financial year.
From the prescribed procedure for claim of the rebate claim for the goods exported for the duty paid goods exported, it is apparent that the petitioners and the other co-noticees have not complied with the same. On the contrary, they have committed fraud and forged the Forms which is found during the course of investigation as per the concurrent findings of fact arrived at by the three Authorities below. In such circumstances it is opined that the respondent-Authorities have rightly rejected the rebate claim of the petitioner and no interference is called for.
Levy of penalty - HELD THAT:- In the show-cause notice as contemplated under Section 11A of the Act, time period is prescribed as five years from the date of knowledge. However, in the facts of the case, as the original documents were lying with the Court of Sessions and the reminders were sent which were provided by the respondent-Authorities in 2008 to the Police Authorities for investigation and the same were not made available till 2014, show-cause notice was thereafter issued in 2014 cannot be said to be beyond the period of limitation. However, the petitioner has never raised the issue of limitation before the Adjudicating Authority nor the Adjudicating Authority have therefore had any occasion to deal with such a contention raised by the petitioners. However, as the petitioners have raised such contentions before the Revisional Authority and before this Court, as the question of limitation is mixed question of facts and law, we have permitted the petitioners to raise such contention and is accordingly, dealt with.
Thus, no interference is called for in the impugned orders rejecting the rebate claim and levy of penalty upon the petitioners while exercising the extra-ordinary jurisdiction under Article 227 of the Constitution of India and the petitions therefore being devoid of any merit are accordingly dismissed.
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2024 (10) TMI 8
Clandestine removal - inclusion of panchnamas as RUDs Intended for the sake of completeness - data retrieved from pen-drive and the PCU and Laptop - data retrieved by GEQD - HELD THAT:- It has specifically been recorded in case of C.G. ST C & C. E-ALWAR VERSUS KAMDHENU ISPAT LTD AND KAMDHENU ISPAT LIMITED VERSUS C.C.E. & S.T. -JAIPUR-I (VICE-VERSA) [2018 (5) TMI 905 - CESTAT NEW DELHI] that the concerned official of GEQD was not examined by the adjudicating authority and, therefore, the matter was remanded directing it to be re-adjudicate after examining the concerned official of GEQD in a personal hearing in the presence of the assessee or its representative for the purpose of arriving at the proper conclusion on the veracity of the data retrieved. It was also recorded in the first round of litigation that the adjudicating authority had doubted the data and further remarked that the laptops and other devices were possibly manipulated in the office of the DGCEI.
While passing the impugned order the Principal Commissioner specifically declined to examine and allow cross-examination of the officials of GEQD on the ground that GEQD enjoys trust of premier investigating agencies including CBI and NIA that had played a major role in investigation of several high profile cases. To cast a doubt on working or result of such prestigious institution without a solid reason or evidence is an attempt to delay the process of adjudication - the Commissioner has openly defied the direction of this Tribunal. The reasoning that since GEQD is a premier institute, it is above examination or cross-examination cannot be accepted. Simply because an expert has a high profile does not mean that the evidence produced by such an expert cannot be questioned and can be used against anyone without even giving them an opportunity to cross-examine such a person. The Principal Commissioner clearly erred in holding that the officers of GEQD was not required to be examined or cross examined.
The mandatory procedure prescribed under section 36B of the Central Excise Act was not followed with respect to the data retrieved from the several computers by the officers of DGCEI. Therefore, such data is not admissible as evidence.
This sole document is not sufficient to either charge the assessee with clandestine removal or to recover duty from it. Consequently, the confirmation of demand of duty interest and penalty against the assessee as well as the penalty imposed on Prakash cannot be sustained.
The impugned order is set aside - appeals are allowed.
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2024 (10) TMI 7
Refund of the amount lying in profit and loss account of the appellant - rejection of refund of the amount paid towards Education Cess & Secondary & Higher Education Cess (SHE Cess) - transitional credit - applicability of Section 142(3) of CGST Act, 2017 - HELD THAT:- Cess is commonly employed to connote a tax with a purpose or a tax allocated to a particular thing suggested by the name of the cess. In the present case, it is related to education. Cess is generally for such levy which is for some special administrative expense as shall be suggested by the name of the cess. Education cess was levied by virtue of Finance Act No. 2 of 2004 in Section 92 to 94 thereof to be charged as a duty of excise with an objective to fulfill commitment of the government to provide a finance universalized quality basic education.
The definition of 'eligible duties and taxes' as per the explanation 3 under Section 140 of the CGST Act, 2017 was amended with retrospective effect from 01.07.2017 whereby it is specified that cesses are excluded from the definition of 'eligible duties and taxes', Thus, the credit is ab initio not available for utilization for GST. In view of the above, cesses are not be transitioned through TRAN-1, as per the transitional provisions specified under CGST Act, the credit balances not transitioned to GST regime shall lapse, and, as such, the argument of the appellant the impugned credits never lapse, as there is no provision retaining the same is not sustainable.
Section 11B the only other provision for refunds in existing laws had been Rule 5 of CCR, 2004. To my understanding the interpretation of Rule 5 of CCR, 2004 is that where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification.
This Tribunal also in the case of Steel Strips Ltd. Vs. Commissioner of Central Excise, Ludhiana [2011 (5) TMI 111 - CESTAT, NEW DELHI-LB] has held that no equity or good conscience influence fiscal codes without the same being embodied to statutory provisions. The Larger Bench of this Tribunal also held that the plea of injustice or hardship cannot be raised to claim a refund in the absence of statutory mandate.
The transitioning in the Electronic Credit Ledger, the amount of such Education Cess and Secondary and Higher Education Cess, does not entitle appellant/assess to utilize the said unutilised amount of Education Cess and Secondary and Higher Education Cess against the Output GST Liability. The "taking" of the input credit in respect of Education Cess and Secondary and Higher Education Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped, does not even permit it to be called an input CENVAT Credit and therefore, mere such accounting entry will not give any vested right to the Assessee to claim such transition and set off against such Output GST Liability after 01.07.2017 - The utilisation of such credit, even if taken in Electronic Ledger and notified in Form TRAN-1, does not guarantee any such right of utilisation independent of other parts of Section 140 specially ignoring Explanation 3.
As far as the Section 142(3) of CGST Act is concerned as already appreciated above that the refund has to be dealt with in accordance of Section 11B as already explained above that refund of EC and SHEC, in the given circumstance, shall not be available under Section 11B of Central Excise Act, 2002 nor even under Rule 5 of CCR, 2004 (as already discussed above). No question of any kind of eligibility of the appellant to claim the refund of such credit which is nothing more than a dead claim, at all arises.
There are no infirmity in the order under challenge vide which the refund claim for the amount of Cenvat credit of EC and SHEC, paid prior March 2015, has been denied to the appellant as was filed under the garb of transitional provisions of CGST Act, 2017 - appeal dismissed.
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2024 (10) TMI 6
Wrongful transfer of credit attributable to all units by ISD exclusively to the respondent - contravention of second proviso to Rule 3(4) of Cenvat Credit Rules - entitlement to take the credit of service tax paid on Clearing & Forwarding Agents Services as it is a post manufacturing activity which is not used in or in relation to manufacturing of the goods - extended period of limitation - interest and penalty - HELD THAT:- The perusal of the ingredients of input service shows that the law itself distinguishes between services included in means-clause which are used directly or indirectly, in or in relation to the manufacturing and other services covered under inclusive-clause. It shows that the concept of manufacturing cost and post manufacturing expenses like advertisement, market research etc are incurred in relation to sales of goods.
The proviso to Rule 3(4) limiting such credit availment does not apply where the credit is availed based on the invoices issued by ISD.
Further it is a settled issue that the department does not have jurisdiction to question the correctness of credit distributed by ISD from the recipient i.e. respondent which is merely availing the credit based on invoices issued ISD - reference made to the decision of the Tribunal in the case of Metro Shoes Pvt. Ltd. [2019 (9) TMI 1532 - CESTAT MUMBAI], wherein the Tribunal has observed 'The appellant-assessee is a recipient of credit that is assigned by the distributor who, undisputedly, has borne the incidence of tax on procured services. It is the distributor who can be charged with awareness of exempted output/output service. if any, and who is empowered by the statute to take the credit. And it is only such availment by the distributor that can be put to notice for ineligibility as espoused in the decisions that fulfill the criteria of precedent.'
The credit of service tax used exclusively in units manufacturing exempted goods cannot be attributed to a specific unit. Services like advertisement, manpower recruitment, market research etc are used by all the units and therefore, no input service has been exclusively utilized in respondent’s Guwahati units. Show cause notices also have not established that these input services were exclusively utilized in Guwahati units. In view of the above, Guwahati units are not exclusively engaged in manufacturing and clearing the exempted goods and therefore, ISD has not violated the conditions of Section 7(b) and instead correctly followed the same.
Extended period of limitation - HELD THAT:- The respondent and ISD have been regularly filing the returns wherein they have been showing the Cenvat Credit availed by them and the department has not brought anything on record to show that the respondent and ISD have concealed the material facts with intent to evade the payment of tax. Therefore, extended period of limitation cannot be invoked in the present case.
Interest and penalty - HELD THAT:- The question of interest and penalty does not arise because the demand of service tax itself is not sustainable.
There are no infirmity in the impugned order passed by the learned Commissioner and the same is upheld - appeal of Revenue dismissed.
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2024 (10) TMI 5
Exemption eligibility based on power project capacity - Interpretation of N/N. 46/2008 - for the purpose of Notification No.46/2008 dated 14.08.2008 whether the capacity of each unit/plant to be taken for eligibility of the exemption Notification which prescribes the capacity of 3960 MW or above or total capacity of all the units in the project should be considered? - HELD THAT:- This issue is no longer resintegra as the same has been considered by this Tribunal in CROMPTON GREAVES LTD. [2015 (10) TMI 1916 - CESTAT NEW DELHI] where it was held that 'In the Office Memorandum dated 20-10-2011 emanating from the Under Secretary, Ministry of Power it is clarified that mega/ultra mega power projects wherein the capacities of a number of units totals up to at least 1000 MW are eligible to avail the requisite benefits under the mega status certificate, issued in terms of condition No. 86 of Notification No. 6/2006- C.E., dated 1-3-2006. Board proceeding dated 21-8-2012 also reiterates this position. Ld. AR for Revenue states that in the circumstances the issue is now settled in favour of the assessee.'
Thus, it is settled that it is not the capacity of individual plant but the total capacity of the project consisting of multiple plant has to be considered. Therefore, in the present case the total capacity of the mega power project is 4000 MW. Accordingly it satisfies the condition of the notification.
The impugned order set aside - appeal allowed.
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2024 (10) TMI 4
Process amounting to manufacture or not - process carried out by the appellant on the raw materials - manufacture of menthol and De-mentholised Oil (DMO) during the relevant period - SCN to several units of J&K including the appellant raising demands of duty refunded to or self-credit taken by such units under Notification No. 56/2002-C.E. dated 14.11.2002 - HELD THAT:- This issue is no more res integra and the Tribunal has already decided a number of cases arising out of the same investigation and all the appeals have been allowed by the Tribunal in favour of the assessees. In this regard, it is pertinent to refer to the decision of this Tribunal in the case of Sangam Aromatics & others [2019 (5) TMI 1339 - CESTAT CHANDIGARH] wherein this Tribunal has decided a bunch of appeals vide Final Order No. 60498-60506/2019 dated 03.04.2019 holding that 'the Jammu based manufacturer were manufacturer during the impugned period and paid the duty on the goods manufactured by them. Consequently, the cenvat credit can’t be denied to the recipient of goods located in the State of U.P i.e. M/s Sangam Aromatics. We also held that the allegations against the appellants are based on assumption & presumption which is not sustainable. In view of above, no penalty is imposable on the appellants.'
The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed.
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2024 (10) TMI 3
Levy of central excise duty - clinker used for captive consumption by availing exemption under N/N. 67/95-CE dated 16.3.1995 for manufacturing of cement that was cleared against International competitive bidding by claiming exemption under Sr No. 91 of N/N. 6/2006-CE dated 01.03.2006 - HELD THAT:- This tribunal in SHREE DIGVIJAY CEMENT CO LTD VERSUS C.C.E. & S.T. -RAJKOT [2023 (1) TMI 187 - CESTAT AHMEDABAD] and M/S ULTRATECH CEMENTS LTD AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, TIRUCHIRAPALLI AND OTHERS [2015 (10) TMI 1058 - CESTAT CHENNAI] considered the very same issue and held that the appellant are entitled for the exemption Notification No. 67/95-CE dated 16.3.1995 for captive use of clinker in the manufacture of cement which is cleared against the International competitive bidding under Notification No. 6/2006-CE dated 01.03.2006.
The issue involved in the present case has already been settled by this Tribunal. Therefore, the issue in hand is no longer res-integra accordingly the impugned orders are set aside - Appeal allowed.
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2024 (10) TMI 2
Inadmissible CENVAT credit - input services used for the manufacture of dutiable goods as well as for the provision of exempted service of trading - non-maintenance of separate accounts for the receipts and use of input services in or in relation to the manufacture of dutiable products and exempted services as required under the provisions of Rule 6(2) of the CCR, 2004 - HELD THAT:- From the facts of the case, it is seen that the appellants are paying service tax on royalty charges to their overseas principals in respect of the ‘bottle closures’ manufactured domestically in their factory as well as in respect of the ‘bottle closures’ imported and sold as it is. In respect of such royalty payment, treating the same as services provided to the appellants by the overseas principals in non-taxable territory, the appellants had discharged the service tax liability as recipient of service. The department had interpreted that since royalty charges are paid in respect of both domestically manufactured and imported bottle closures, these are common input services and therefore the appellants are required to maintain separate account for common input services utilised in dutiable as well as exempt/non-taxable trading service. Further, they are required to pay an amount equal to prescribed percentage of the value of exempted traded goods, considering it as ‘exempted services’ as defined under Rule 2(e) of the CCR, 2004.
It is on record that the appellants have already calculated the value of trading of bottle closures during the period June, 2016 to December, 2016 and had duly discharged the amount to be reversed as per Rule 6(3) of the CCR, 2004 including the interest and 15% penalty, before issuance of the SCN. However, neither the original order nor the impugned order have gone into the details of such facts, to either examine, scrutinise the fact that such payment is as per CCR, 2004 or to record the reasons as to why the same is not acceptable.
Thus, the difference between the above figures being Rs. 3,86,170/- and 10% of the cost of the traded goods has been worked out as Rs.71,55,278/-, and the higher of the same has been taken into account for determination of the prescribed 7% percentage for the purpose of determining the amount required to be paid under Rule 6(3) of the CCR of 2004 as Rs.5,00,869/-.
The appellants have duly followed the procedure and conditions prescribed in complying with the obligations under CENVAT Credit Rules, 2004, and had also complied with for payment of CENVAT credit when pointed out by the audit wing of the department along with interest and penalty - the value of ‘trading of goods’ taken as a basis in the SCN at Rs.7,19,38,951/- in paragraph 10 of the original order and the consequent amount of CENVAT to be paid under Rule 6(3)(i) of the CCR of 2004 in that paragraph and the same amount dealt in paragraph 10.1 of the impugned order, is not disputed by the appellants.
From careful reading of the legal provisions under clause (c) of Explanation I to Rule 6(3) of the CCR, 2004 for the purpose of determining the ‘value’ in case of trading of goods and to work out the CENVAT amount to be paid, it transpires that higher of the two amounts indicated therein has to be taken as the basis for arriving at the correct amount to be paid. It is further found that the amount already calculated by the appellants towards such payment also needs to be taken into account, while determining the balance amount required to be paid towards payment of CENVAT amount under Rule 6(3) of the CCR of 2004. However, the original authority had not recorded the basis on which he had dealt with the demand as proposed in the SCN and how he had taken into account the various figures as provided by the appellants - the learned Commissioner (Appeals) had modified the order of the original authority for redetermination of the correct amount of CENVAT amount to be paid by the appellants, after the exercise of the option by the appellants under Rule 6(3AA) of the CCR, 2004.
The Tribunal in the case of BHEL-GE Gas Turbine Services Pvt. Ltd. [2020 (2) TMI 1367 - CESTAT HYDERABAD] had held that the assessee-appellant having paid the CENVAT credit amount towards trading of goods, has to be construed as no CENVAT credit has been taken and accordingly dropped the demand.
There are no reason for interfering with that part of the impugned order at paragraphs 14(i) to 14(iii) passed by the learned Commissioner (Appeals) as it had duly taken into account the amount of CENVAT paid by the appellants along with interest and penalty, and had directed the original authority for redetermination of the actual amount of CENVAT to be paid under Rule 6(3) of the CCR, 2004 and interest thereon, after taking into account the option chosen by the appellants in terms of Rule 6(3AA) ibid, for determination of the amount payable by the appellants. However, the portion of the impugned order at paragraph 14(iv) therein, imposing penalty on the appellants is set aside.
Appeal allowed in part.
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