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Central Excise - Case Laws
Showing 221 to 240 of 81789 Records
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2025 (1) TMI 840
Refund of excess Central Excise Duty paid for the months of November 2015 and December 2015 - rejection of refund claim based on the evidence provided by the appellant - principles of unjust enrichment - HELD THAT:- The appellant had submitted the details of errors in ER-1 returns filed and details of correct figures that should have been considered while verifying the correctness of total duty actually payable and refund claimed vide their letter dated 18.02.2016. They have also submitted the attested copies of invoices issued in relation to clearances made during the period in dispute vide letter dated 03.12.2016 which clearly supports the correct figures as submitted by the appellant vide letter dated 18.02.2016.
The excess duty paid by the Appellant has been reflected as ‘Advances and loans’ in Note 18 of the Annual Accounts of 2015-16. However, the lower authorities have simply brushed aside the accounting entries available in the Annual Accounts for the year 2015-16 without giving any valid finding as to why they are not acceptable - The Appellant has submitted enough evidence to substantiate their claim of excess payment of duty.
The documents submitted by the Appellant along with the Chartered Accountant submitted by them establishes that there was an excess payment of duty by the Appellant during the months of November 2015 and December 2015.
Principles of unjust enrichment - HELD THAT:- The Appellant has not produced any documents regarding crossing of the bar of unjust enrichment. Accordingly, the matter is required to be remanded back to the adjudicating authority for the purpose of verification of the documents on the eligibility of refund from the unjust enrichment angle.
Conclusion - The documents submitted by the Appellant establish that there was an excess payment of duty by the Appellant during the months of November 2015 and December 2015 and the Appellant is eligible for the refund, subject to verification of ‘unjust enrichment’.
The impugned order is set aside and the issue is remanded back to the adjudicating authority only for the limited purpose of verification of the issue of ‘unjust enrichment’ before he sanctions the refund claim - Appeal disposed off by way of remand.
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2025 (1) TMI 786
Clandestine removal - evasion of huge amount of tax by suppressing the amount of royalty paid by the franchisee units - suppression of production of finished product - admissible and corroborative evidences or not - Levy of penalties.
HELD THAT:- The fact that the Appellant ever paid a higher amount of royalty to M/s KIL is not factually correct and established, the fact that the Appellant manufactured and cleared the higher quantity of goods corresponding to such alleged higher payment of royalty is not established or proved.
Further, there is neither any evidence of any excess consumption of electricity nor any evidence whatsoever and howsoever with regard to any clandestine procurement of raw materials or of production of any excess TMT Bars, use of labour, transporter, etc. No evidence regarding buyers of such alleged clandestine manufactured goods or any receipt of consideration against such alleged clandestinely manufactured goods. Thus, without adducing any evidence in support of such facts, a charge of clandestine removal cannot be sustained merely on assumption and presumption due to such alleged higher amount of royalty recorded by M/s KIL, where even correctness and truthfulness of such recording itself is not established.
Reliance in this regard is placed upon the following judgment of the Hon’ble Allahabad High Court in M/S. CONTINENTAL CEMENT COMPANY VERSUS UNION OF INDIA & OTHERS [2014 (9) TMI 243 - ALLAHABAD HIGH COURT], wherein the Court categorically stated 'no case is made out for extra so-called clandestine sale of the Portland Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties.'
The above-mentioned judgment of the Hon’ble High Court has been relied by the Tribunal in the matter of M/S GIRIRAJ IROSTEEL COMPANY PVT. LTD., SHRI SUNIL KUMAR AGARWAL, SHRI PURUSHOTTAM RATHI VERSUS COMMISSIONER OF CENTRAL EXCISE [2019 (12) TMI 542 - CESTAT ALLAHABAD], wherein the facts were similar to the present case framed based on the same facts of alleged recording of higher royalty by M/s KIL and the Tribunal set aside the demand by holding 'manufacture of such quantity of goods on which Central Excise duty of around Rs. 5.5 crores was demanded is not established. Since Central Excise duty is on manufacture and manufacture is not established, therefore, there is no basis for demand of Central Excise duty to the tune of Rs. 5,58,89,762/-. Since the demand is not sustainable the penalty is on the appellants are not sustainable.'
It is a well settled law that resumption of loose slips or private records resumed from the third party, or statements recorded behind the back of the Appellant cannot be made the basis of confirming demand on the Appellants unless the same are proved to be linked to the Appellant. Further, even it is assumed such entries existed, but that does not prove that the Appellant in fact made any such higher amount of payment in absence of any corroborative evidence - once such printout is not admissible in evidence then nothing survived in this case to hold clandestine clearance of the goods by the Appellant.
In absence of cross examination of witnesses, the documents recovered as well as their statements cannot be relied upon against the Appellant in view of decision of Hon'ble Allahabad High Court in the case of COMMISSIONER OF CENTRAL EXCISE, MEERUT-I, MEERUT & ANOTHER VERSUS M/S PARMARTH IRON PVT. LTD., BIJNOR. [2010 (11) TMI 109 - ALLAHABAD HIGH COURT], wherein it has been held that 'there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered.'
Penalty on Director - HELD THAT:- The Appellant has simply appeared as a proxy of Mr. Navin Jain to submit documents. He has neither any authorization by the Company to tender a statement nor any summons were issued to the Appellant under Section 14 of the Central Excise Act, 1944. The DGCEI, Kanpur in most cryptic manner simply to fulfil their formalities, recorded a statement of the person, who did not even have any authority letter even from Mr. Navin Jain, who was main director looking after overall work.
Penalty on Appellant No.3 - HELD THAT:- The clinching evidence of the nature of purchase of raw material, use of electricity, sale of final products, clandestine removal and the more flowback of funds are required to be established in the case of clandestine removal. Such aspects have not been investigated into and therefore, the judgement of Hon’ble Allahabad High Court in the case of M/S. CONTINENTAL CEMENT COMPANY VERSUS UNION OF INDIA & OTHERS [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] is applicable to the facts of the present case. The penalty imposed is set aside.
Conclusion - Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. The demands and penalties cannot be based on assumptions or insufficient evidence. The entire demand alleging clandestine removal is not sustainable and accordingly the entire demand confirmed against the Appellant is set aside. As the demand of duty is not sustainable, therefore, no penalty can be imposed.
Appeal allowed.
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2025 (1) TMI 785
Admissibility of CENVAT Credit passed on through ISD invoices - input service of advertisement /sale promotion - HELD THAT:- The issue herein is squarely covered in favour of the Appellant by the Larger Bench ruling of this Tribunal in the case of Krishna Food Products [2021 (5) TMI 906 - CESTAT NEW DELHI (LB)]. Under similar facts and circumstances, the Division Bench of this Tribunal held that 'This issue is whether the appellant would, irrespective of the answer to the first issue, be entitled to avail CENVAT credit when input service is attributed to the goods on which excise duty is paid and includes the cost of services on which credit was taken.'
Conclusion - The issuance of ISD invoices by Parle Biscuits Pvt. Ltd. to its CMU was legal and correct. The appellant was entitled to avail CENVAT credit for input services attributed to the goods on which excise duty was paid.
Appeal allowed.
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2025 (1) TMI 784
Refund of the duty paid under Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- This case is no longer res integra having been decided by the Tribunal in the case of Audi Automobiles [2009 (5) TMI 426 - CESTAT, NEW DELHI] and a number of cases involving one of the bodybuilders. Following this decision, this Bench has decided the case involving M/S SITA SINGH & SONS P. LTD., M/S SML ISUZU LTD. VERSUS CCE, DELHI-IV [2016 (7) TMI 346 - CESTAT CHANDIGARH] on more than one occasion against the appellants.
CESTAT in the case of Audi Automobiles [2009 (5) TMI 426 - CESTAT, NEW DELHI] held that 'it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6. We, therefore, do not find any illegality in the impugned order as far as the demand of duty and interest payable thereon from the appellants.'
Conclusion - The transactions involving job work on behalf of a principal manufacturer fall under Rule 10A for valuation purposes, and the principal manufacturer bears the duty liability.
Appeal dismissed.
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2025 (1) TMI 733
Debonding from an Export Oriented Unit (EOU) scheme - insistence by the respondent authorities on payment of excise duty in cash, instead of utilizing Cenvat credit - whether the petitioners can be permitted to pay an amount equal to the excise duty leviable on the goods lying with the petitioners at the manufacturing plant proposed to be debonded, from the Cenvat credit account of the company? - HELD THAT:- Partial debonding of an unit from the existing EOU is permissible under EOU Scheme, inasmuch as, there is no bar to such debonding, that has been brought to the notice of this Court.
In case of Eicher Motors Ltd. [1999 (1) TMI 34 - SUPREME COURT], it has been held by the Hon’ble Supreme Court that 'a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the Rule cannot be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods.'
Rule 3(4) of the Cenvat Credit Rules was an enabling provision for utilization of Cenvat credit. This Court has held in CCE Vs. Shilpa Copper Wire Industries [2010 (2) TMI 711 - GUJARAT HIGH COURT] that there is no difference between 100% export oriented unit and a normal DTA Unit as regards the Cenvat scheme.
In view of the provision of Section 142 (6) (a) of GST Act, also the petitioners will not be liable to pay the amount of excise duty in cash and would be entitled for refund of the outstanding credit in cash as per the aforesaid provisions.
It will be seen on plain reading of section that “any amount of credit found to be admissible to the claimant shall be refunded to him in cash”. Therefore, there can be no arguments to the contrary that the legitimately availed Cenvat credit could not be used for the payment of duties and therefore, the demand of the respondents to pay the excise duty on goods that would be manufactured in the concerned manufacturer plant of the petitioner -company after debonding has to be rejected outright.
Conclusion - The petitioners have made out a strong prima facie case, inasmuch as, when similarly situated assessees have been permitted to pay the excise duty foregone from the Cenvat credit account, there is no reason as to why the petitioners should be denied such benefit.
In view of the interim order dated 30.10.2015, since the “No Due Certificate” has been issued to the petitioners for debonding out of 100% EOU scheme upon the petitioners having been permitted to pay the excise duty forgone from the legally availed Cenvat credit account, this petition succeeds.
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2025 (1) TMI 732
CENVAT Credit availed by the petitioners under N/N. 29/2004-CE - petitioners simultaneously operated under N/N. 30/2004-CE - lapsing of credit availed under N/N. 29/2004 - rejection of rebate claim - HELD THAT:- A conjoint interpretation of the provisions of law makes it clear that Rule 11 (3) (ii) of the Cenvat Credit Rules, 2004 is attracted only if there is an absolute exemption Notification No. 30/2004 is clearly a conditional exemptional notification and thus, a harmonious reading of the aforesaid provision and Notification No. 30/2004 will make it clear that the said Notification No. 30/2004 does not attract the provisions of Rule 11 (3) (ii) Cenvat Credit Rules, 2004. The respondents authorities have placed unnecessary reliance on Rule 11 (3) (ii) of Cenvat Credit Rule, 2004 which was introduced vide Notification No. 10/2007 dated 1.3.2007 which could be said to be applicable only in cases of absolute exemption granted by a Notification under Section 5A of the Central Excise Act, 1944. The said Rule 11 (3) (ii)) can not be said to be applicable to Notification Nos. 29/2004-CE and 30/2004-CE. This is clear from the plain use of the words “exempted absolutely” in the said sub-rule.
The accumulated credit was due to the fact that the petitioners had cleared their final product by paying central excise duty @ 8% and had simultaneously availed Cenvat credit on the raw materials used as inputs @ 16% under Notification No. 29/2004 . For the first time, as on 8.3.2006, the petitioners had reversed the Cenvat credit involved in the closing stock of inputs, finish product and yarn westage and balance amount of Cenvat credit was carrried forward. Thus, the petitioners had rightly carried forward its Cenvat credit balance. Further, since Rule 11 (3)(ii) of Cenvat Credit Rules, 2004 was introduced vide Notification No. 10/2007 dated 1.3.2007, and Notification No. 30/2004 does not provide that unutilized credit is prohibited from being carried forward, there could be no question of lapse of credit lying as balance in the Cenvat credit account of the petitioners in the month of April, 2007.
Conclusion - CENVAT credit, once validly availed, does not lapse unless explicitly provided by law. Appellant are entitled to the rebate claims with interest.
The impugned order dated 14.12.2020 passed by the respondent No. 4 is hereby quashed and set aside. Consequently the respondents are directed to sanction and pay the rebate claims @ 12% per annum from 10.7.2013 (date of filing the rebate claims) till the date of actual payment - Petition allowed.
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2025 (1) TMI 731
Valuation of Central Excise Duty - inclusion of notional cost of drawings and designs supplied free of cost by Maruti to the vendors in the assessable value - HELD THAT:- It is pertinent to reproduce the findings of Division Bench of CESTAT Delhi in Denso India Private Limited [2024 (3) TMI 686 - CESTAT NEW DELHI] wherein, the Tribunal after considering the provisions relating to valuation of goods as provided under Section 4 of Central Excise Act and also the Central Excise Valuation Rules, 2002 and few judgments of various courts on this issue has held that 'the notional cost of drawings and designs supplied free of cost by Maruti to the vendors cannot be included in the assessable value of the parts and components manufactured by vendors and cleared to Maruti for the purpose of payment of central excise duty.'
The impugned orders are not sustainable in law - Appeal allowed.
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2025 (1) TMI 675
Demand of duty short paid under Section 11A(1) of Central Excise Act, 1944 along with interest and penalty under Section 11AA and 11AC of the Act respectively - whether the value of sprouts sold by the appellant is to be included in the assessable value of the “Malt” and the duty is payable while clearing the same to “UBL”? - HELD THAT:- Both the Authorities observed that the sprouts arose during the processing of “Barely‟ for manufacture of “Barely Malt‟, which was sold by the appellant and the sole proceeds were retained by them. The profit earned on the sale of sprouts, therefore, has been part of the value of the “Barley Malt‟ manufactured and cleared by the appellant on job work to the principal manufacturer. In view of the decision of the Supreme Court in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT] also the clarification issued by the CBEC in Circular No.619/10/2002-CX dated 19.02.2002, where the Tribunal had rejected the appeal of the appellant on the issue of inclusion of the value of the sprouts, the Adjudicating Authority had confirmed the demands.
There are no reason to interfere with the impugned order and hence, the same is affirmed - appeal dismissed.
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2025 (1) TMI 674
Clandestie removal - difference between balance sheet and ER-1 return - demand of clandestine manufacture or clearance confirmed purely on assumption and presumption - Invocation of Extended period of limitation.
Whether the difference between the financial statement and ER-1 returns is sufficient proof of alleged clandestine removal? - HELD THAT:- The entire case of Revenue is based upon the audit objection which is based on the comparison of entries made in the statutory records vis-à-vis the balance sheet. It is observed that the appellant has explained the differences by referring to the number of their final product as entered in ER-1 returns as also on balance sheet. Apart from that it is found that there is virtually no evidence on record to indicate and establish clandestine manufacture and removal of goods. It is well settled law that the onus to prove clandestine activities is upon the Revenue and the same is required to be discharged by production of positive evidences. Such a demand cannot be confirmed on assumptions and presumptions - This Tribunal in the case of Sharma Chemical Vs. CCE [2000 (12) TMI 161 - CEGAT, KOLKATA] has held that noting in the private records may raise suspicion but for confirming the charge of clandestine removal based on those records, there must be corroborative evidence in the form of installed capacity, raw material, utilization, labour employed, power consumed, goods actually manufactured and packed etc.
Similar have been the findings of Hon’ble High Court of Allahabad in their another decision titled as Commissioner of C.Ex., Meerut-I Vs. R.A. Castings Pvt. Ltd. [2010 (9) TMI 669 - ALLAHABAD HIGH COURT] holding that the income shown in balance sheets unless and until is linked to some other clinching evidence, cannot be the proof of clandestine removal of goods, has been upheld by Hon’ble Apex Court in the case of Commissioner Vs. R.A. Castings Pvt. Ltd. [2011 (1) TMI 1302 - SC ORDER]. In light of this discussion, the department has failed to prove the allegations of clandestine removal of goods and noticed difference in the balance sheet compared with the ER-1 return is the presumptory basis of raising the said allegation - the findings in the impugned order to this aspect are therefore liable to be set aside.
Based on said difference whether appellant is liable to pay duty on the differential amount? - HELD THAT:- It is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets without proving that such service has been rendered by the assessee and consideration thereof has been received. Similarly, no service tax demand can be raised and confirmed on the basis of notional income.
Section 32(2) of Indian Evidence Act, 1872 also permits acceptance of such document without a formal proof. The recent decisions of the Tribunal, as follows, have also held that the difference between the financial statements of the assessee and the returns cannot be the sole basis of the demand confirmed.
Invocation of Extended period of limitation - HELD THAT:- The show cause notice has been issued invoking the provision of sub-section (1) of Section 73 of Finance Act, 1994. It has already been observed that the demand has been confirmed on the basis of assumptions and that the no evidence has been produced by the department to support the allegations to suggest any positive action of the appellant to have any intent to evade the duty - Since, the burden was upon the department to prove the allegations which remains undischarged. The extended period of limitation and the provision of Section 73(1) of Central Excise Act, 1944 has wrongly been invoked.
Conclusion - i) The department failed to prove clandestine removal and that the demand based on financial discrepancies was unsustainable. ii) The extended period of limitation and the provision of Section 73(1) of Central Excise Act, 1944 has wrongly been invoked. iii) The show cause notice itself is barred by time. In fact, the imposition of penalty is also liable to be set aside.
Appeal allowed.
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2025 (1) TMI 673
Recovery of sanctioned refund that was granted to the Respondent under the CENVAT Credit Rules - HELD THAT:- It is an admitted fact that the Respondent was holding CENVAT credit in their account at the relevant time and as per Section 5 of the CENVAT Credit Rules, if any input is used in manufacture of final product, which is cleared for export under Bond or letter of undertaking, the CENVAT Credit in respect of such input shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final product cleared for home consumption and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safe guards, conditions and limitations as prescribed in the relevant notification. The Respondent had applied for refund of unutilized CENVAT credit amounting to Rs.1,23,04,382/- and Adjudication authority as per the order dated 16.06.2009 sanctioned only Rs. 88,37,166/- though the Appellant admits that the CENVAT credit available against the goods exported during the same period was Rs. 1,23,04,383/-.
Conclusion - The entire proceedings initiated against the Respondent are unsustainable. Refund is allowed.
Appeal of Revenue dismissed.
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2025 (1) TMI 672
Process amounting to manufacture or not - activity of packing/ repacking, labeling/ re-labeling of machine parts undertaken by the appellants - classification of earthmoving machines - to be classified as automobiles or not - HELD THAT:- This Bench in the case of Donaldsons India Filter Systems Pvt. Ltd. [2024 (7) TMI 544 - CESTAT CHANDIGARH] held that 'the amendment carried out w.e.f. 29.04.2010 makes it abundantly clear that a legislature did not intend to tax the parts, components and assemblies of earthmoving equipment etc. under the Head “Automobiles”; therefore, to this extent, the demand for the period prior to 29.04.2010 cannot be sustained.'
It is further found that Commissioner, Pune vide his Order dated 13.07.2012 observed that 'the activities of packing and repacking of parts, components and assemblies of earth moving machinery falling under Chapter Heading 8429. manufactured by the assessee, have been made liable to Central Excise duty retrospectively, with effect from 29-04-2010, in view of the retrospective amendment made in the Third Schedule to the Central Excise Act, 1944, by inserting Entry 100A in the said Schedule vide Section 73 read with Twelfth Schedule to the Finance Act, 2011. The Finance Act. 2011, got assent of the Hon'ble President of India, on 08-04-2011 and hence the said retrospective amendment came into force only on 08-4- 2011.
Conclusion - i) The word 'automobile' has not been defined in the Central Excise Act," and thus, common parlance and dictionary definitions should guide its interpretation. ii) The amendment made in the Third Schedule to the Central Excise Act by Finance Act, 2011 w.e.f. 29.04.2010 by adding serial no. 100A to the Third Schedule is prospective in nature. iii) Earthmoving machines involved in the present appeals are not 'automobiles.
The impugned orders cannot be sustained and are liable to be set aside - Appeal allowed.
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2025 (1) TMI 671
Recovery of fraudulently availed Cenvat Credit in terms of Rule 14 of CC Rules read with proviso (1) to Section 11A of CEA - Whether approval of a Resolution Plan by the NCLT extinguishes the claims of all creditors, including statutory authorities, and abates ongoing proceedings related to such claims? - HELD THAT:- The identical matter has been considered by two coordinate benches of the Tribunal; Mumbai Bench in the case of M/s Jet Airways (India) Limited vs. Commissioner of Service Tax-IV [2023 (5) TMI 767 - CESTAT MUMBAI] and Hyderabad Bench in the case of Icomm Tele Ltd. vs. Commissioner of Central Tax, Puducherry [2023 (10) TMI 1344 - CESTAT HYDERABAD].
It is pertinent to refer the findings of Mumbai Bench of the Tribunal in the case of M/s Jet Airways (India) Limited which was disposed of vide its order [2023 (5) TMI 767 - CESTAT MUMBAI] and it was ordered that the appeals stand abated once the Resolution Plan has been approved by NCLT and the CESTAT has become functus officio in the matters relating to this appeal.
Conclusion - Once the Resolution Plan has been approved by the NCLT, thereafter, the present appeal stands abated as the CESTAT has become functus officio in the matter relating to the present appeal.
The appeal filed by the appellant is disposed of as abated.
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2025 (1) TMI 670
Method of valuation - Section 4 or Section 4A of the Central Excise Act - Valuation of the 'physician samples' manufactured by the Appellant and sold on principal to principal basis to other pharmaceutical manufacturers/brand owners of such products - extended period of limitation - HELD THAT:- The issue is no more res integra. The Hon’ble Supreme Court in the matter of CCE, Surat Vs. M/s Sun Pharmaceutical [2015 (12) TMI 670 - SUPREME COURT], wherein it was categorically held that 'The transaction in question was between the assessee and the distributors. Between them, admittedly, price was charged by the assessee from the distributors. What ultimately distributors did with these goods is extraneous and could not be the relevant consideration to determine the valuation of excisable goods. When we find that price was charged by the assessee from the distributors, the show cause notice is clearly founded on a wrong reason. The case would squarely be covered under the provisions of Section 4(1)(a) of the Act. In view thereof, the Central Excise Rules would not apply in the instant case.'
Extended period of limitation - HELD THAT:- In the absence of any allegation regarding suppression of facts or fraud, invoking the extended period of limitation is also unsustainable.
Conclusion - The valuation of physician samples sold on a principal-to-principal basis should be based on transaction value under Section 4, not Section 4A. The extended period of limitation requires evidence of fraud or suppression, which was absent in this case.
Appeal allowed.
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2025 (1) TMI 669
Determination of assessable value for the completed vehicles under Rule 10A(iii) read with Rule 8 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000, when the vehicles are used captively by the Defense Establishment and not sold - HELD THAT:- In the appellant’s own case, on the identical issue, for the previous period, the Principal Bench of the Tribunal in M/S PERFECT MECHANICAL INDUSTRIES VERSUS C.C.E. DELHI IV [2015 (5) TMI 525 - CESTAT NEW DELHI], has considered the issue and has held 'The Department seeks to demand duty on 110% of the fabrication charges by invoking Rule 8 of the Central Excise Valuation Rules. Rule 8 of the Central Excise Valuation Rules is applicable only when the goods manufactured by a manufacturer are captively consumed by him or by some other manufacturer on his behalf but this is not the case here as the appellant after manufacturing the complete vehicle by constructing the body on the duty paid chassis received by them, returned the complete vehicles to M/s Ashok Leyland / vehicle factory Jabalpur, who in turn supplied those vehicles to the Armed Forces.'
Conclusion - The appellant was not liable for additional duty based on inflated assessable value calculations under Rule 10A(iii) and Rule 8.
Appeal allowed.
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2025 (1) TMI 664
Benefit of the Exemption on the manufacture of mehandi paste - Recovery of central excise duty with interest and penalty - availment of N/N. 12/2012-CE dated 17.03.2012, as subsequently amended by N/N. 12/2013CE dated 01.03.2013, by the appellant on the manufacture of mehandi paste - extended period of limitation.
Benefit of the Exemption on the manufacture of mehandi paste - HELD THAT:- The period of dispute in the present case is from 01.08.2014 upto 30.06.2017. The Exemption Notification, dated 17.03.2012, against serial no. 134, describes the excisable goods as “henna powder, not mixed with any other ingredient”. This was subjected to six percent excise duty. The amendment made on 17.03.2012 substituted serial no. 134 as “henna powder or paste, not mixed with any other ingredient”. It was subjected to Nil rate of duty. It is the said amendment that would be applicable to the facts of the present case - exemption would be available to an assessee if henna powder is mixed with a liquid, so far that the liquid is a medium to change the form of henna powder into paste. The liquid is not restricted to water. It can be any liquid which is a medium to change the form of henna powder into paste. What has been excluded are products like henna dye and such other products which are cosmetics.
In Prem Henna [2019 (3) TMI 847 - CESTAT NEW DELHI], in the matter of the appellant itself and in the matter of manufacture of henna paste from henna powder, the show cause notice that was issued to the appellant alleged that the appellant was mixing clove oil with henna powder for the manufacture of henna paste and, therefore, since another ingredient was added to henna powder, the appellant would not be entitled to the benefit of the Exemption Notification. Rejecting this contention, the Tribunal held that clove oil is a liquid used to make henna paste from henna powder and make it marketable as such paste in cones. Such a process for making the paste marketable/usable by the customers would not mean that the appellant would not be entitled to the benefit of the Exemption Notification. In this connection, the Tribunal placed reliance upon the letter dated 10.07.2014 issued by the Board regarding the Exemption Notification.
The Commissioner, in the present case, has not accepted the two orders in Prem Henna [2019 (3) TMI 847 - CESTAT NEW DELHI] and in M/S. PREM MEHANDI CENTRE APPELLANT VERSUS CCE, JAIPUR [2018 (12) TMI 2009 - CESTAT NEW DELHI] for the reason that the department did not file appeals to challenge these orders passed by the Tribunal and had accepted the decisions of the Tribunal only on the ground of monetary limit. In this connection, the Commissioner placed reliance upon section 35R of the Central Excise Act to hold that the final orders passed by the Tribunal did not have a binding effect.
The effect of section 35R of the Central Excise Act and the Circular dated 20.10.2010 issued by the Central Board of Indirect Taxes would need to be considered.
The Commissioner, therefore, clearly fell in error in holding that in cases where the department decides not to pursue the matter before a higher appellate forum due to monetary limits, the decision of the Tribunal or the High Court shall not have any precedence value. In fact, the observations made by the Commissioner are against all propriety and judicial discipline. So long as the orders of the Tribunal have not been set aside, the Commissioner is bound to follow the decision of the Tribunal.
In Smt. Kaushalya Devi Bogra and others vs. The Land Acquisition Officer and another [1984 (2) TMI 349 - SUPREME COURT], the Supreme Court also observed that the direction of the Appellate Court is binding on the courts subordinate thereto and that judicial discipline requires and decorum known to law warrants that appellate directions should be taken as binding and followed.
In the instant case, though there were two binding decisions of the Tribunal on the issue that had arisen for consideration before the Commissioner, but the Commissioner decided to not follow the decisions as according to him they had no precedence value.
Extended period of limitation - HELD THAT:- It would not be necessary to examine the contention raised by the learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the case.
Conclusion - The appellant would clearly be entitled to avail the benefit of the Exemption Notification dated 17.03.2012, as amended on 01.03.2013, when manufacturing henna paste from henna powder.
The order dated 30.12.2020 passed by the Commissioner is, accordingly, set aside - Appeal allowed.
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2025 (1) TMI 605
Rejection of refund claim - time limitation - case of Revenue is that the cause for claiming the refund of the said amount had risen on 28.08.2017 when the tax was deposited under RCM and the refund claim filed on 23.09.2021 was beyond the prescribed time limit of one year, hence the same is time barred - principles of unjust enrichment - HELD THAT:- Though credit is not available as input tax credit under GST law, the credit under the old Credit Rules is eligible to the appellant and such credit has to be processed under Section 142(3) of GST Act, 2017 and refunded in cash to the assessee. Therefore, the appellant is eligible to the said relief and the Department is accordingly directed to process the case of the appellant in accordance with the said decision.
Similar view has been taken in the subsequent decision in the case of M/s. Nitin Industries vs. Commissioner of CGST & ST, New Delhi [2022 (11) TMI 1090 - CESTAT NEW DELHI] that the appellant is entitled to refund in terms of Section 142(3) read with Section 54 read with Section 49(6) of the CGST Act.
From the view taken by the various High Courts, it is settled that denial of credit of tax or duty paid under existing law would amount to violation of Articles 14 and 300 A of the Constitution of India. Unutilised credit has been recognized as vested right and property in terms of Article 300 A of the Constitution of India. In Adfert Technologies Private Limited vs. Union of India [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT], the Division Bench of the High Court held that transitional credit being a vested right, it cannot be taken away on procedural or technical grounds.
Principles of unjust enrichment - HELD THAT:- There is no question of unjust enrichment in the present case as the amount involved is towards the credit.
Conclusion - The provisions of Section 11B(1) which prescribes the limitation for filing the refund claim are not covered under Section 142 (3), therefore, the rejection of the refund claim on the ground of limitation is erroneous and is unsustainable also on the peculiar facts of the present case, where the appellant was eligible to carry forward/transit the Canvat Credit amounting to Rs.2,67,659/- under the transitional provisions of Section 140 of CGST Act. There is no question of unjust enrichment in the present case as the amount involved is towards the credit.
Appeal allowed.
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2025 (1) TMI 604
Valuation of Excise duty - Inclusion of pool cancellation charges, pool lifting charges, penalty on dealers and cancellation charges in the assessable value of the motor vehicles - HELD THAT:- The impugned appeals pertain to Show Cause Notices issued for the subsequent to the period for which the issue was decided by this Bench in [2024 (7) TMI 545 - CESTAT CHANDIGARH] where it was held that 'it is apparent that the pool charges relate to the transaction of sale of additional vehicles, that the appellant has entered into with the dealers. We find that, as rightly held by the Commissioner, as per Section 4 of Central Excise Act, 1944, the „transaction value' means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time. including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty commission or any other matter, but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.'
Conclusion - The appellants are required to include the pool lifting charges in the assessable value of the vehicles cleared by them.
All the demands are sustained and penalties are set aside; cum-duty benefit is ordered to be accorded - Appeal allowed in part.
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2025 (1) TMI 537
Relevant date of acquiring status of the Appellant's unit as an EPCG unit - from the date of actual issuance of the license or from the time when the first import took place on which Customs duty has been charged and recovered under the EPCG license - debonding would come into force only from such time as the actual order was made or not - in view of the fact that the Appellant’s unit has now been assessed as an EPCG unit, the said status would attach from the date of import and/or to the date of application for debonding/migration to the EPCG Scheme or not - unreasonable delay caused by the Department to allow the debonding of the Appellant’s unit - confiscation and the imposition of the redemption fine.
HELD THAT:- Since these Appeals are pending since quite long, the hearing is expedited and the Appeals are peremptorily fixed for hearing on 12th February, 2025.
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2025 (1) TMI 536
Rebate claim under Rule 5 of the Export Rules read with Notification No.11 of 2005 dated 19th April 2005 - rejection on the ground of limitation under section 1B of the Central Excise Act, 1944 - HELD THAT:- The petitioner is ready and willing to provide all documents which are available after more than 10 years as there is no fault on the part of the petitioner for loss of documents by the respondent authority and if the petitioner is legally entitled to the rebate claim, the respondent authority cannot deny the same for want of documents, otherwise the petitioner proves the eligibility of such claim.
Let the matter be examined by respondent No.2 – Principal Commissioner of CGST by adjudicating the rebate claims on the basis of documents to be submitted by the petitioner within a period of four weeks from today, instead of respondent No.3 for not following directions issued by the Commissioner (Appeals) as well as having pre-determined mind to reject the claim. Let respondent No.2 be adjudicated the rebate claims of the petitioner on the basis of the documents to be submitted by the petitioner within a period of twelve weeks from the date of receipt of such documents. The impugned Order-In-Original No. CGST/WS08/Ref-06/ST/ BSM/19-20 dated 13th August 2019 is hereby quashed and set aside.
Conclusion - The substantial rights of the assessee if any cannot be denied without verification and natural justice.
Petition allowed.
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2025 (1) TMI 535
Jurisdiction of invocation of Section 11D of the Central Excise Act, 1944 - Section 35 of the Central Excise Act, 1944 along with pre-deposit under Section 35F of the Central Excise, 1944 - HELD THAT:- Section 11D(1) contemplates collection of duty and corresponding failure to pay the duty to the credit of the Central Government. Therefore, it cannot be said that the petitioner has not collected the tax as the petitioner has admitted to the tax liability by filing Form SVLDRS - 1 on 31.12.2019. Therefore, invocation of machinery under Section 11D(1) or 11D(1A), as the case cannot be questioned. The Show Cause Notice has rightly invoked Section 11D(2) which has now culminated in the impugned order.
The challenge to the impugned order on the ground that the Show Cause Notice was without jurisdiction is liable to be rejected. The petitioner has to pay the duty that has been self assessed by the petitioner. The petitioner has paid a part of duty liability in cash to an extent of Rs. 24,73,472/- leaving the balance of Rs. 11,67,469/-.
The amount has been paid an appropriation cannot be questioned. The petitioner would be entitled to reduce the tax liability by way of set off in the Form of Rule 3(1) of the CENVAT Credit Rules, 2004 provided petitioner has document to establish that petitioner had indeed purchase inputs/services on payment of tax duty. This would require a determination by the respondent. The benefit of input tax credit in the Form of CENVAT Credit under Rule 3(1) of the CENVAT Credit Rules, 2004 cannot be denied.
As far as imposition of penalty is concerned, same can be re-visited by the respondent as to whether the petitioner is to be imposed with penalty for the failure to pay the tax in time.
Conclusion - Section 11D(1) makes it clear that every person who is liable to pay tax under the Act or rules made thereunder and has collected the amount in excess of the duty assessed or determined and paid on any excisable goods under the Act or the rules made thereunder from the buyer of such goods shall forthwith pay the amount so collected to the credit of the Central Government. Applicability of Section 11D for recovery of excess duty collected afirmed. The benefit of input tax credit in the Form of CENVAT Credit under Rule 3(1) of the CENVAT Credit Rules, 2004 cannot be denied.
Petition disposed off.
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