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Central Excise - Case Laws

Showing 281 to 300 of 82127 Records

• 2025 (4) TMI 242
  

  Short payment of Central Excise duty due to the exclusion of VAT retention from the assessable value for the period from December, 2009 to March, 2014 - HELD THAT:- It is not the case that appellant has retained the VAT as his income, infact 99% of VAT retention by the appellant is a capital subsidy /incentive given by the State Government for setting up a new industrial unit as per Industrial Policy of Assam, 2003 read with Assam Industrial Taxation Remission Scheme, 2005. In that circumstances, the decision in the case of Super Synotex (India) Ltd. [2014 (3) TMI 42 - SUPREME COURT] is not applicable to the facts of the case.

  The issue has been examined by this Tribunal in the case of M/s. Harit Polytech Pvt. Ltd. [2023 (7) TMI 1547 - CESTAT, DELHI] where it was held that 'Since the subsidy under Promotion Policy is held to not to be an additional consideration, it is held that the impugned demands cannot sustain.'

  Conclusion - The remission of 99% of VAT retention by the appellant is nothing but a subsidy given by the State Government as per industrial policy. Therefore, the same is not includable in the assessable value of the goods cleared by the appellant.

  No demand is sustainable as per the Show Cause Notice issued to the appellant. Hence, whole of the demand is set aside. Consequently, no penalty is imposable on the appellant - Appeal allowed.

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• 2025 (4) TMI 178
  

  Levy of Central Excise duty on the amount of sales tax retained after availing benefit extended by the State Government for pre-payment of such sales tax which was collected by the appellant - Applicability of the judgment in the case of M/s Super Synotex (India) Ltd., [2014 (3) TMI 42 - SUPREME COURT] for the period prior to 31.06.2000 - HELD THAT:- The Tribunal felt that the issue was no longer resintegra in view of the Hon’ble Supreme Court judgment in the case of M/s Super Synotex (India) Ltd., which was also followed by Co-ordinate Bench of this Tribunal in the case of Honda Motorcycles &Scooters India Pvt Ltd., Vs CCE, Delhi-III [2016 (9) TMI 533 - CESTAT CHANDIGARH].

  On going through the judgment in the case of M/s Super Synotex (India) Ltd., supra, and it is found that the Hon’ble Supreme Court has examined the issue of taxability in respect of amount retained by the assessee by treating the said retention as price of goods under the basic fundamental conception of transaction value as substituted with effect from 01.07.2000 under Section 4 of the Central Excise Act. It also took into account CBEC Circular No. 378/11/98 dated 12.03.1998 which protected industrial units availing incentive scheme as there was conceptual book adjustment of sales tax paid to the Department. The issue involved was that the assessee had not paid the duty on the additional consideration collected towards the sales tax. The Revenue felt that the assessee was availing exemption from the payment of sales tax even though it was showing sales tax but assessable value was shown separately for the payment of Central Excise duty. On the other hand, the assessee said that it was a incentive scheme and not an exemption and therefore the sales tax collected was not includable in the assessable value and the deduction was admissible.

  It is therefore apparent that in the given situation what have been clearly held that in terms of amendment in Section 4 of the CEA, wherein the concept of “transaction value” was brought, unless the sales tax is actually paid to the Sales Tax Department of the State Government no benefit towards excise duty can be given under Section 4(4)(d). Therefore, from the plain reading of the judgment in the case of M/s Super Synotex (India) Ltd., it is obvious that the said judgment has not considered the period before 01.07.2000 and therefore the said judgment is only applicable for the period after 01.07.2000.

  Conclusion - The judgment in M/s Super Synotex (India) Ltd. does not apply to the period prior to 01.07.2000. Consequently, the demand for excise duty for the period up to 30.06.2000 is not sustainable.

  The appeal is allowed partly, reflecting the Tribunal's determination that the pre-01.07.2000 period was not covered by the judgment in M/s Super Synotex (India) Ltd.

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• 2025 (4) TMI 177
  

  Demand of differential central excise duty on account of inclusion of the notional cost of drawings and designs supplied free of cost by Maruti Suzuki India Pvt Ltd. in the assessable value of parts and components of motor vehicles manufactured by the appellant and cleared to MSIL - HELD THAT:- The issue raised in the case of Denso India Pvt Ltd. [2024 (3) TMI 686 - CESTAT NEW DELHI] was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the said issue, the Principal Bench considered the provisions of section 4 of the Central Excise Act, 1944 and Rule 6 of the Valuation Rules and observed that anything which is supplied by the buyers to the manufacture before even identifying the potential seller/ manufacturer cannot be treated as additional consideration for sale. It was, therefore, held that something can be treated as an additional consideration for sale of goods only when there exists a contract of sale or an agreement to sale between two parties and in terms thereof the buyer pays something over and above the price agreed. In other words anything which is supplied by the buyer to the manufacturer even before identifying the potential manufacturer can never be treated as an additional consideration for sale. The Tribunal, therefore, concluded that the drawing and designs supplied by MSIL at the time of identification and short listing of potential vendors for supply of parts and components, the provisions of section 4 1(b) of the Act read with Rule 6 of the Valuation Rules, could not have been invoked as no consideration was received by the vendors from MSIL.

  It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between mere specification and detailed engineering drawing as considered in the earlier decision in Mangalore Refinery & Petrochemicals Ltd. Vs. CC, Mangalore [2012 (9) TMI 712 - CESTAT, BANGALORE], where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now Rule 10(1)(b)(iv) of the Customs Valuation Rules, 2007).

  The aforesaid decisions are squarely applicable to the facts of the present case and, therefore, the specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti.

  Conclusion - The notional cost of specifications provided by MSIL is not includable in the assessable value of the parts and components manufactured by the appellant, leading to the setting aside of the impugned order.

  The impugned order deserves to be set aside - Appeal allowed.

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• 2025 (4) TMI 176
  

  Recovery of alleged irregular input credit - rejection of request of cross-examination - violation of principles of natural justice and the provisions of Section 9D of the Central Excise Act, 1944 - HELD THAT:- The Tribunal in the appellant’s own case [2024 (12) TMI 220 - CESTAT CHANDIGARH] remanded the matter to the adjudicating authority on the same allegations i.e. denial of cross-examination of the persons whose statements have been relied upon for issuing the show cause notice.

  Conclusion - The impugned order is unsustainable due to the procedural lapse and the case remanded for fresh adjudication, directing the adjudicating authority to allow cross-examination of the material witnesses.

  Appeal allowed by way of remand.

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• 2025 (4) TMI 175
  

  Clandestine removal - violation of principles of natural justice - proceedings held ex-parte in quick succession - demand for central excise duty on exports - non-compliance of the conditions prescribed in Rule 19(3) of the Rules - denial of benefit of SSI exemption - extended period of limitation - penalty.

  Violation of principles of natural justice - impugned order passed ex-parte without affording sufficient opportunity of being heard - HELD THAT:- The scope of the suo moto petition before the Supreme Court as is evident from the Order dated 10.01.2022 is that the Court took cognizance of the difficulties that might be faced by litigants in filing petitions /applications/suits/appeals/all other quasi-proceedings within the period of limitation prescribed under the General Law of Limitation or under any special laws due to the outbreak of the COVID-19 Pandemic and thereafter due to surge of the virus on public health, it was directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation, as may be prescribed under the General or Special laws. The matters were taken up for hearing virtually before all the forums. The appellant could have availed the facility of appearing online during the various opportunities granted by the Adjudicating Authority. Therefore, there is no substance in the arguments of the appellant that there is violation of the mandate of the Supreme Court or that sufficient opportunity has not been granted in terms of Section 33A of the Act. The impugned order does not suffer from any infirmity in this regard.

  Demand for central excise duty on exports - HELD THAT:- The appellant is engaged in the manufacture of articles of jewellery and was, therefore, liable to pay central excise duty pursuant to the Union Budget 2016–17 imposing basic excise duty of 1% without credit and 12.5% with credit on articles of jewellery. In compliance to the Public Notice No.07/2016 dated 26th July 2016, extending the time limit for taking Central Excise registration upto 31 July 2016, the appellant was registered with the Central Excise Department on 29th July 2016. It implies that the appellant had understood the liability towards Central excise duty on manufacture of articles of jewellery and therefore, there is no reason for them not to discharge the central excise duty liability w.e.f. 1st March, 2016 - The appellant having admitted that they had knowledge about the excise duty levied on gold jewellery, the necessary corollary is that the appellant is liable to pay excise duty w.e.f. 1st March 2016.

  The invoices for sale from Chandni Chowk branch and Karol Bagh branch with the description of the goods as gold ornaments/gold chain in respect of which the appellant had claimed exemption from Central excise duty was admitted by Siri Ajay Goyal that they had mistakenly claimed exemption on the clearance under the said invoices and accepted their duty liability. The goods under and these invoices were covered under the definition of articles of gold jewellery. The excise duty has been rightly confirmed on account of non-inclusion of the value of goods sold on invoices having description “24 Carat Ornaments/Gold Chain” valued at Rs.3,42,904/- during the period from 1.03.2016 to 30.06.2017.

  Benefit of SSI Exemption - HELD THAT:- The total clearances of the appellant for the FY 2015–16 was Rs.1,198.64 crores as per the balance sheet and out of which Rs.793 crores was pertaining to the sale of articles of jewellery as per the statement of Shri R.R. Singla and the sale of excisable goods for the month of March 2016, was Rs.1.71 Cr. as per the Trial Balance. In view of the notification, the threshold limit for SSI exemption was Rs.85 lakhs for the month of March 2016 and Rs.15 crores (as amended) for the preceding financial year. Resultantly, the appellant is not entitled to avail the benefit of SSI exemption either for March 2016 or for FY 2015-16 and FY 2016-17. There are no error in the findings recorded by the Adjudicating Authority in view of the clear and simple wordings of the notification.

  Cum-duty benefit towards demand of central excise duty - HELD THAT:- It appears from the documents made available, the appellant had not charged the central excise duty from their customers any time during 1.03.2016 to 31.12.2016 in view of the prevailing circumstances at that time. The net sale value of articles of jewellery amounting to Rs.274,28,94,752/- has to be assessed giving the benefit of cum-duty value. By virtue of an amendment an explanation was added to section 4 w.e.f., 14.05.2003 which provides that when duty is not collected separately, the price actually realised is deemed to be cum-duty price.

  Whether the demand of Rs.65,69,207/- on exported goods is sustainable as these clearances did not qualify as ‘export’ under Rule 19 of Central Excise Rules, 2002? - HELD THAT:- For facilitating exports, safeguards in the form of procedural requirements were provided whereby the exporter is required to furnish the Bond and the Letter of Undertaking (LUT). The purpose is to ensure that the goods cleared from the manufacturing premises without payment of duty are not diverted in transit and are actually exported, however in the event the goods are not exported, the duty which would be leviable thereon maybe recovered by enforcing the bank guarantee. Coming to the present case, it is an undisputed fact that exports have been physically effected under the supervision of the Proper Officer of Customs and documentary evidence such as invoices and shipping bills have been duly produced by the appellant, however, the appellant has not furnished any Letter of Undertaking/Bank Guarantee/Bond before the Customs or Central Excise authorities - It is not the case of the Revenue that the goods have not been exported rather, the only allegation is that the procedure laid down for availing the benefit of exporting the goods without payment of excise duty have not been followed by the appellant while making the export which is contrary to the principle that a substantive right cannot be denied for want of procedural formalities - there are no substance in raising the demand on the goods exported merely on the ground that the conditions prescribed for export of excisable goods without payment of duty has not been fulfilled.

  Extended period of limitation - HELD THAT:- The law on invoking the extended period of limitation has been settled over the period by various decisions of the Apex Court and other forums - The extended period of limitation is applicable only when something positive other than mere inaction or failure on the part of assessee is proved. Conscious or deliberate withholding of information by manufacturer is necessary to invoke larger limitation of five years. Similar view was expressed by the Apex Court in Uniworth Textiles Ltd versus Commissioner of Central Excise, Raipur [2013 (1) TMI 616 - SUPREME COURT], where the Court was concerned with the invocation of extended period under Section 28 of the Customs Act and it was observed the conclusion that mere non-payment of duties is equivalent to collusion or willful mis-statement or suppression of facts is untenable.

  In the case of Mahanagar Telephone Nigam Ltd versus Union of India & Ors. [2023 (4) TMI 216 - DELHI HIGH COURT] the Delhi High Court observed that merely because MTNL had not declared the receipt of compensation as payment for taxable service does not establish that it had wilfully suppressed any material fact and therefore, no intent to avoid tax can be inferred by non-disclosure of the receipt in the service tax returns.

  Penalty - HELD THAT:- The failure to file service tax returns is a violation but the said violation cannot be attributed with intent to evade payment of duty and therefore the penalty imposed under section 11AC Is not sustainable however, since no general penalty has been imposed by the Adjudicating Authority, there is no reason for us to impose any such penalty on the appellant.

  Personal penalty u/r 26 on Director - HELD THAT:- Since the demand is not sustainable being time barred, consequently the penalty would also not survive.

  Conclusion - i) The impugned order is not in violation of natural justice as sufficient opportunities are provided. ii) The demand for duty on exported goods is unjustified as substantive compliance is met. iii) Pendants of 24CT purity are liable for duty as they are classified as articles of jewellery. iv) The appellant is entitled to cum-duty benefit but not SSI exemption due to turnover limits. v) The demand is time-barred, and the extended limitation period is inapplicable. vi) Penalties under Section 11AC(1)(c) and Rule 26 are unsustainable.

  Appeal allowed.

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• 2025 (4) TMI 104
  

  Availability of CENVAT Credit on courier service post amendment of 2011 - input services - period involved of July, 2012 to June 2017 - HELD THAT:- This Court finds that the decision as contained in final order of Dynaflex Pvt. Ltd. Vs. CCE and ST Vadodara- ii, [2017 (8) TMI 1217 - CESTAT AHMEDABAD] in which, inter alia, the present appellant was also a party, was concerned with the period post amendment of year 2011 and was considered by the Bench, while dealing with the matter held that 'includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs. accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security business exhibition, legal services, Inward transportation of inputs or capital goods and outward transportation upto the place of removal, but excludes services.'

  A simple reading of the said amended provision, makes it clear that though the expression 'activities relating to business, such as has been deleted, but the illustrative services viz., Accounting, Auditing, Financing, Recruitment and quality control, Coaching/training, Computer Networking, Credit Rating, Share Registry, Legal Services, Security, Business Exhibition etc., even though directly not related to manufacturing activity, being not used inside the factory premises, but continued to remain in the said definition of input service - It cannot be denied that 'Courier Service Involves a host of uses relating to the activity of manufacture and sale of goods. For example, the documents relating to technical expert's opinion, sample testing report, sending of samples, machine catalogue etc. are received and dispatched by utilizing the services of 'Courier' and it cannot be said that these are de hors of the activities of manufacturing business.

  This Tribunal in the cases of Long Meditech Ltd [2016 (7) TMI 468 - CESTAT CHANDIGARH] and Sunbeam Generators Pvt Ltd [2016 (7) TMI 895 - CESTAT CHENNAI] opined that credit avail on Service Tax paid on 'Courier Serves' is eligible to Cenvat Credit.

  Conclusion - The Service Tax paid on the 'Courier Services for various purposes viz., Sending Samples, Documents, finished goods etc., would be eligible to Cenvat Credit before and even after amendment to the definition to the 'Input Services' with effect from 01.4.2011.

  Appeal allowed.

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• 2025 (4) TMI 6
  

  CENVAT credit on capital goods - to be determined based on the date of receipt of the capital goods or the date of commencement of production? - entitlement to avail CENVAT credit on capital goods used for manufacturing dutiable goods from the date the goods became dutiable - HELD THAT:- On perusal of the finding of fact arrived at by the Tribunal, it appears that the respondent assessee commenced its daily production of 600ML bottles on 29.03.2011 and before that in the months of January and February, 2011, production of Maaza RGB was shown as goods produced which are not manufactured on the capital goods in question as the capital goods in the present case were meant for production of Maaza in PET bottles. The Tribunal has therefore, rightly come to the conclusion on the basis of evidence produced on record by the respondent assessee that goods were manufactured on the capital goods meant for manufacture of Maaza PET bottles only from 29.03.2011 and on that date, finished goods were admittedly dutiable as exemption earlier provided on such final products was done away. Admittedly the capital goods were utilised for the purpose of production of products of respondent assessee which were dutiable after 01.03.2011.

  There are no question of law much-less any substantial question of law arises from the impugned order of the Tribunal which requires any interference by this Court.

  Appeal dismissed.

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• 2025 (4) TMI 5
  

  Failure to allow cross-examination of witnesses, as directed by the Central Excise & Service Tax Appellate Tribunal (CESTAT) - Violation of principles of natural justice - Section 9D of the Central Excise Act, 1944 - HELD THAT:- This Court has, in case of M/s. Atithi Gokul Automobile Works & Anr vs. Union of India [2024 (12) TMI 669 - GUJARAT HIGH COURT] involving similar facts remanded the matter back and held that 'The Tribunal has categorically observed that the adjudicating authority is to grant cross-examination of the persons as has been indicated in paragraph No. 4 of the order and subsequently, grant four weeks’ time to the petitioners to file a detailed reply. Both the directions of the Tribunal are not followed by the respondent No. 2 in letter and spirit and as such, the impugned order-in-original is liable to be quashed and set aside only on that ground.'

  The impugned order-in original dated 30.10.2023 is hereby quashed and set aside and the matter is remanded back to the respondent No. 2. The respondent No. 2 shall comply with the directions of the order dated 04.04.2022 passed by the Tribunal and as the matter is very old, give priority to the same and pass fresh de novo order after giving an opportunity of hearing to the petitioners and compliance of the directions given by the Tribunal within a period of six months from the date of receipt of copy of this order - Petition allowed by way of remand.

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• 2025 (4) TMI 4
  

  SSI exemption under N/N. 08/2003-C.E. dated 01.03.2003 - exports made to Nepal should be included in the computation of the total value of clearances for the purpose of determining eligibility for the Small Scale Industries (SSI) exemption or not - HELD THAT:- As per this Notification, the goods cleared by the appellant are totally exempted up to the value of clearances of Rs.1.5 crores. As per the Notification No. 08/2003-C.E. dated 01.03.2003, the value of exports made to Nepal and Bhutan were included for the purpose of computation of value of clearances as provided under Explanation Clause (G) of Notification No. 08/2003 ibid. Circular No. 958/1/2012-CX dated 13.01.2012 was issued wherein it was clarified that exports to Nepal have been placed at par with exports to other countries, excepting Bhutan. However, during the impugned period, Notification No. 08/2003 had not been amended so as to exclude ‘Nepal’ from Explanation Clause (G) of the aforesaid Notification.

  This issue has been examined by the Hon’ble Gujarat High Court in the case of M/s. Ketan Pottery Works v. Union of India [2016 (2) TMI 484 - GUJARAT HIGH COURT] wherein the Hon’ble High Court has declared the portion “and Nepal” in Explanation Clause (G) of Notification No. 08/2003 as unconstitutional in view of non-deletion of the same by the Government from the said Notification.

  Conclusion - The value of clearances to Nepal are to be considered at par with exports made to other countries and hence, such values are not includable for the purpose of computation of the value of exemption limit under Notification No.08/2003-C.E. dated 01.03.2003.

  The demand confirmed in the impugned order, by including the value of exports made to Nepal, is not sustainable and consequently, the same is set aside - Appeal allowed.

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• 2025 (4) TMI 3
  

  Method of valuation - Section 4A or Section 4 of the Central Excise Act, 1944? - switchgears manufactured by Appellant - invocation of extended period of limitation under proviso to Section 11A of CEA - Levy of Interest under Section 11AB and Penalty under Rule 25 read with Section 11AC.

  Method of valuation - HELD THAT:- It was held by Hon”ble Karnataka High court in the case of Ewac Alloys Ltd [2011 (9) TMI 688 - KARNATAKA HIGH COURT] that even if the goods meant for industrial use are displayed at retail counters and sold, they are not chargeable to duty on the Basis of MRP - Tribunal in the case of Legrand (India) Pvt Ltd [2014 (2) TMI 407 - CESTAT MUMBAI] held that goods meant for industrial use, though packaged for ease of transportation can not be assessed to duty under Section 4A.

  As far as the Appellant’s goods are intended for industrial use and declaration to that effect is available on the packages, a fact which is not contradicted by Revenue, there is no infirmity in the Appellant’s assessing the same under Section 4 of Central Excise Act, 1944. Revenue has not made out any case for assessment under Section 4A, despite the fact that they are sold through retail outlets/dealers/ stockists. Further, it is the argument of the appellant that even in cases where MRP was not declared, revenue had no mechanism to determine the same before the enactment of Central Excise valuation Rules w.e.f. 1.3.2008.

  Extended period of limitation - HELD THAT:- There is considerable force in the submission of the appellants. The appellants are regular assesses and were filing returns regularly. Since they have declared the classification of the products under CETH 8536, department could have caused necessary verification and issue the Show Cause Notice in time. Revenue had no reason to wait for the anti-evasion team to visit the Appellant’s premises and find out what they have been declaring regularly - the department cannot hide the fact of non-scrutiny of the returns in even time and take shelter under the argument that the appellants were in the regime of self-assessment and allege suppression etc with intent to evade payment of duty, without adducing any evidence. The appellants were very much on the dash board of the department and audit was being conducted regularly. Failure of the jurisdictional officers and audit teams to detect anomaly if any, cannot be mitigated by alleging suppression on the part of the appellant. In view of the facts and circumstances of the case, the extended period cannot be invoked.

  Interest - penalty - HELD THAT:- Since the duty is not payable, the demand of interest and penalty cannot be sustained.

  Conclusion - i) Goods intended for industrial use, bearing a declaration to that effect, are not subject to MRP-based valuation under Section 4A of the Central Excise Act. ii) The extended period of limitation under Section 11A is not applicable when the appellant has disclosed all relevant information and there is no suppression of facts. iii) Penalties under Section 11AC and demands for interest are not sustainable when the primary duty demand is not upheld.

  Appeal allowed.

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• 2025 (3) TMI 1500
  

  Denial of CENVAT credit of service tax paid - Bank Guarantee charges under 'Banking and other Financial Services' and Sales Commission to agents under 'Business Auxiliary Services' used in connection with supply, commissioning and installation of Turbo Generator (TG) sets - HELD THAT:- The issues are no more res-integra. The issue regarding availment of cenvat credit of service tax paid on Bank Guarantee charges is settled as per the decision of this Tribunal in the matter of M/s RMS Infotech Pvt Ltd., Vs. CC, Bangalore [2021 (11) TMI 1108 - CESTAT BANGALORE]. The issue of Sales Commission was also considered by this Tribunal in the matter of M/s Beloorbayir Biotech Limited [2018 (5) TMI 24 - CESTAT BANGALORE], wherein it is held that 'The commission is paid on sales of the products/services with an intention to boost the sale of the company. In view of the same, the sales commission has a direct nexus with the sales which in turn is related to the manufacture of the products. It is to be understood that there need not be manufacture unless there is sale of product. To increase the manufacturing activity encouragement is being given for increased sales. Hence, the commission paid on sales becomes part of sales promotion resulting in increased manufacturing activity.'

  The dispute regarding CENVAT credit availed against the sales commission was considered by this Tribunal in the matter of M/s Federal Mogul TRP (India) Ltd [2020 (11) TMI 893 - CESTAT BANGALORE], wherein it is held that sales commission fall under definition of 'input service'.

  Conclusion - Denial of CENVAT Credit of the service tax paid on 'Bank Guarantee commission' and 'Sales Commission is not sustainable in law, hence the impugned order is liable to be set aside

  Appeal allowed.

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• 2025 (3) TMI 1484
  

  Calculation of excise duty - non-inclusion of freight charges collected from the customers in the assessable value of the goods delivered at the buyer’s premises during the period April, 2007 to November, 2015 - extended period of limitation - HELD THAT:- The holistic reading of contract as a whole would indicate that sale in this case is on FOR basis and it is actually effected at the buyer’s premises. In other words, point of sale is at the buyer’s premises.

  On the issue of the includability of freight, insurance, etc., there are catena of judgments passed by Hon’ble Supreme Court, High Courts and Tribunals. Essentially, one set of judgments has relied on the judgment of Hon’ble Supreme Court in the case of Ispat Industries [2015 (10) TMI 613 - SUPREME COURT], whereas, another set of judgments has relied on the judgment of Hon’ble Supreme Court in the case of Roofit Industries [2015 (4) TMI 857 - SUPREME COURT] and Emco Ltd [2015 (8) TMI 200 - SUPREME COURT]. While, as per Ispat Industries judgment, buyer’s premises can never be the place of removal but as per the judgment in Roofit Industries and Emco Ltd, the place of removal has to be determined on the basis of factual matrix including the point at which sale has actually taken place. Therefore, when the sale is clearly on FOR basis, following the judgments in the case of Roofit Industries and Emco Ltd, the place of removal will be at the buyer’s premises and obviously the cost of transportation, insurance, etc., if any, incurred by the assessee are required to be included in the assessable value. However, it is always important to decide as to what shall be the place of removal having regards to the factual matrix and relevant documents. Therefore, in case it is clearly established that the sale has not taken place at the factory and it has been effected only at the buyer’s premises then such costs would be includable in the assessable value.

  It is found that both in the OIO as well as in the impugned order, based on the factual matrix, it has been brought out that the contract was on FOR basis, as thus the factual matrix was more clearly covered by the judgment in the case of Roofit Industries and Emco Ltd. - placing reliance on the judgments, the Commissioner (Appeals) has rightly held that in the given factual matrix, the judgments in the case of Roofit Industries and Emco Ltd are relevant and not that of Ispat Industries as clearly the price is not ex-works. There are no infirmity in the impugned order passed by the Commissioner (Appeals) insofar as merit is concerned.

  Extended period of limitation - penalty - HELD THAT:- Adopting a method suitable or beneficial to appellant would be on account of their understanding of various judgments and is clearly an interpretational issue. It is also found that in the facts of the case, there is no other positive evidence on record suggesting that the appellants have deliberately chosen not to pay Excise Duty on freight charges and suppressed any information with intent to evade the payment of duty. Therefore, the invocation of extended period and imposition of penalty under section 11AC(1)(b) are not sustainable. Therefore, the impugned order to the extent of invoking extended period or imposition of penalty under section 11AC(1)(b) is not tenable and is accordingly, set aside.

  Conclusion - The appellant is liable to pay excise duty inclusive of freight charges as the place of removal is the buyer's premises under the facts of this case, but the extended period of limitation and penalty under section 11AC(1)(b) are not justified and are set aside.

  Appeal allowed partly.

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• 2025 (3) TMI 1449
  

  Entitlement to exemption under N/N. 12/2012-CE for goods supplied against International Competitive Bidding (ICB) and to Mega Power Projects - reversal of an amount equal to 6% of the value of exempted goods under Rule 6 of the Cenvat Credit Rules, 2004 - HELD THAT:- In the instant case, there is no dispute that the goods have been supplied against International Competitive Bidding. Therefore, it is prudent to examine if these goods, when imported in India, are exempt from duties of customs and the additional duty leviable under sub-Section 1 of Section 3 of the Custom Tariff Act, 1975.

  It is not in dispute that the goods have been supplied by the appellant to Mega Power Project(s) as certified by the Joint Sectary to the Government of India in the Ministry of Power. We find that the lower authority have ruled that the Electrical Power Cables are not covered under Chapter Heading 98.01 of the Customs Tariff Act, hence, these are not exempt from basic Customs Duty as well as Additional Customs Duty. This reasoning seems incorrect as the Central Excise Tariff Act does not have any corresponding Tariff entry as it exists in Customs Tariff Act, 1985. This issue has already been decided by the Tribunal in the case of Cords Cable Industries Pvt. Ltd. Vs. Commissioner of C. Ex., Jaipur-I [2016 (9) TMI 1126 - CESTAT NEW DELHI], wherein it was held that electrical wires, cables supplied to Mega Power Projects are fully exempt under the corresponding Central Excise Notification read with Customs Notification.

  However, Condition No. 93 to the Notification No. 12/2012-CUS dated 17.03.2012, also prescribes certain requirements to be fulfilled, for availment of the exemption from Customs Duty as well as Additional Customs Duty. These conditions are factual in nature as to whether Power Purchasing State has constituted the Regulatory Commission with full powers to fix Tariffs and whether the Power Purchasing States have undertaken to carry out distribution reforms as laid down by the Ministry of Power. It also needs to be seen whether procurement Certificates have been issued by the designated Authorities as per Sr. No. (b) and (c) of the Condition No. 93. The documents submitted along with appeal, do not contain all the relevant details which are to be seen in the matter.

  It is fit to remand the matter to the adjudicating authority to see fulfilment of Condition No. 93 of Notification No. 12/2012-CUS dated 17.03.2012. If these Conditions are satisfied, then the appellant will not be required to reverse an amount as demanded by the department. The Bench directs the Appellant to produce relevant documents/Certificates in respect of supplies involved in the case before the adjudicating authority within one month for determining whether the Condition No. 93 of the said Customs Notification is satisfied in the case. The adjudicating authority also directed to decide the issue within 3 months from the date of production of above documents, as the matter is quite old.

  The appeals are disposed off by way of remand to the adjudicating authority.

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• 2025 (3) TMI 1448
  

  Cenvat Credit on the Goods Transport Service (GTS) for outward transportation of cement from the depot to the buyer's premises on a FOR (Free on Road) basis - Extended period of limitation - HELD THAT:- It is not in dispute in this present appeal that wherever the sale has been on FOR basis, as evidenced from record, the credits have allowed and it has not been disputed by the Department any further. However, in the case of Rs. 3,44,228/-, the appellant could not produce sufficient documents to satisfy the Adjudicating Authority that the ex-depot sales were also in the nature of FOR or that they were essentially FOR sale. The documents being cited as evidence before this Bench to prove that sales were on FOR basis pertains to the month of April as pointed by the Learned AR and that also is not very categorical as to whether the sale was on FOR basis or otherwise. There is no other corroborative evidence that it is on FOR basis.

  The Adjudicating Authority has gone through various case laws as well as evidence adduced by the appellant at para 22 and observed that the documents furnished by the assessee related to the clearance of final products directly through the factory to the buyers premises and that they have not produced any documents / information evidencing (i) the sale from Depot/Premises of Consignment Agent to the customer’s premises was on FOR destination basis, (ii) transfer of property at buyer’s premises and (iii) inclusion of the freight charges in the assessable value and payment of Excise duty on the said freight charges. Therefore, essentially, the Adjudicating Authority has held that the Assessee had clearly failed to determine place of removal with reference to the points of sale and therefore the credit taken at outward freight on transportation of finished goods were clearly beyond the place of removal in relation to sale ex-depot.

  Extended period of limitation - HELD THAT:- The show cause notice has not adduced any substantive ground to invoke the ingredients required for invoking the extended period.

  Conclusion - While on merit the demand is sustainable in the impugned order as the appellant have clearly failed to bring on record the evidence substantiating that sales were on FOR basis even in the case of ex-depot, however, as far as invocation of extended period is concerned, that it is not sustainable. Therefore, while on merit it is upheld, but on limitation, the demand is not sustained. Since, the entire demand is barred by limitation, the appeal to the extent of setting aside the demand and penalty by Adjudicating Authority is set aside on this count itself.

  Appeal allowed.

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• 2025 (3) TMI 1447
  

  Denial of utilization of CENVAT Credit for payment of duty during the defaulted period in terms of Rule 8(3A) of Central Excise Rules, 2002 - levy of interest and penalty - HELD THAT:- Hon’ble High Court in [2024 (7) TMI 814 - CALCUTTA HIGH] has held that matter should be kept pending and is to be taken only after the Special Leave to Appeal No. 16523/2015 is decided by the Hon’ble Apex Court. However, during the course of hearing, it has been brought to the knowledge of the Bench that the Hon’ble Supreme Court has already disposed of the matter and the Department has already withdrawn the appeal.

  The issue in the case of Indsur Global Ltd. has already been decided by the Hon’ble Supreme Court. In these circumstances, it is found that the issue is presently not pending before the Hon’ble Supreme Court. Thus, in our view, there is no bar in taking up the issue for a decision based on the available documents.

  Considering the fact that the provisions of Rule 8(3A) of Central Excise Rules, 2002 have been declared ultra vires by the Hon’ble Gujarat High Court in the case of Indsur Global Ltd. and also by the Hon’ble Punjab and Haryana High Court in the case of Sandley Industries [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT], the CENVAT Credit cannot be denied to the appellant for utilization in payment of duty during the defaulted period. Thus, there is no infirmity in utilization of CENVAT Credit for payment of duty during the defaulted period.

  Conclusion - Since the denial of utilisation of CENVAT Credit by invoking Rule 8(3A) of the Central Excise Rules, 2002 has been declared ultra vires by Courts, utilisation of CENVAT Credit during the impugned period by the appellant was not irregular. Accordingly, no amount can be demanded from the appellants either for using the CENVAT accruals of subsequent months or for using the CENVAT account for payment of duty during the said period for the alleged contravention of Rule 8(3A) of the Central Excise Rules, 2002.

  The demand confirmed in the impugned order by denying the payment made by the appellant through CENVAT Credit is not sustainable and accordingly, the same is set aside - Since the demand raised against the appellant does not survive, the question of demanding interest or imposing penalty does not arise.

  Appeal allowed.

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• 2025 (3) TMI 1398
  

  Levy of penalty for shortages of raw materials and finished goods - appellant paid the duty before the issuance of the SCN - HELD THAT:- Appellant were unable to fully explain the shortage of raw materials and finished goods at the time of stock verification and, in order to put an end to the litigation, they paid the duty and hence, penalty should not have been imposed in respect of these demands. The submission of the appellant agreed that since the appellant had paid the central excise duty along with interest before issuance of the SCN, as per Section 11A(2B) of the Act, there was no necessity to issue the Show Cause Notice for these demands. as the duty involved has already been paid. Accordingly, the SCN for these issues need not have been issued. In these facts and circumstances, the penalties imposed on the appellant on these issues are not warranted and hence, the penalties imposed on the appellant on these demands are set aside.

  Regarding the liability to central excise duty amounting to Rs.1,21,936/- on transport insurance, the appellant has collected transport insurance charges @ 1% on the value from the customers and deducted the same from the assessable value. However, the actual premium paid by them was found to be less than the 1% collected. In this regard, it is observed that the profit earned by the appellant on the transport insurance is not liable to be included in the assessable value, as has been held by the Tribunal in the case of TCP Ltd. v. Commissioner of C.Ex., Madurai [2007 (10) TMI 512 - CESTAT, CHENNAI].

  Conclusion - i) The demands of Rs.40,445/- and Rs.18,031/- (inclusive of cesses), along with interest, confirmed on account of shortage of inputs and shortage of finished goods respectively, already paid by the appellant, are upheld. No penalty is imposable in respect of these demands. ii) The demand of Rs.1,21,936/- confirmed on account of inclusion of transit insurance in the assessable value is set aside. No penalty is imposable on the appellant in respect of this issue.

  Appeal disposed off.

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• 2025 (3) TMI 1397
  

  Refund upon finalisation of provisional assessments - requirement to prove conclusively that the incidence of duty burden has not been passed on to the ultimate buyer - compliance to the principle of the doctrine of unjust enrichment - HELD THAT:- It is evident from the records that the Original Authority in the denova Order-in-Original No. 08/2016 dated 05.08.2016 has arrived at the decision that the appellant has borne the excise duty burden and not passed on to the dealers after scrutinizing the credit notes, Chartered Accountant’s certificate, extract of ledger for discounts, etc., and ordered for sanction of the refunds. Whereas in the impugned orders dated 14.09.2017, the Commissioner of GST and Central Excise (Appeals), Coimbatore has held that refund claims were hit by the bar of unjust enrichment as the appellant has not conclusively established that the burden of excise duty in relation to which such refunds are claimed has not been passed on by him to any other person (ultimate consumer) and the verification process done by the Original Adjudicating Authority was only confined to the first buyers i.e., Dealers. Whether the incidence of duty was passed on to any other downstream buyer was not verified by the Original Adjudicating Authority and also from the records, it was ascertained that the assessee has not submitted any such evidence.

  An in-depth examination of the Hon’ble Supreme Court’s judgment in the case of Addison & Co. Ltd. [1997 (3) TMI 98 - SUPREME COURT] makes it clear that there is a presumption that the full incidence of duty burden has been passed on to the buyer of the goods. The refund of any duty can be made only to the person who bears the incidence of duty and it is necessary to conduct verification as to ascertain who actually have borne the burden of duty. It has been categorically laid down that refund can be granted only to the person who has paid the duty and borne the duty and not to anyone else. If the ultimate customer cannot be identified the amount should be credited to the Consumer Welfare Fund established under Section 12 C of the Central Excise Act, 1944 to be utilised for the benefit of consumers in general.

  The appellant would be eligible for refunds sanctioned only when it is proved that incidence of duty has not only been passed on to the dealers but also by the dealers to the ultimate customers. Herein, the appellant has proved that the excise duty burden has been borne by him and not passed on to the dealers. But whether there is any evidence as to their dealers having not passed on the duty incidence to the ultimate customers of Motor Cycles is not forth coming as a second stage verification has not been carried out. As such, the appellant is required to prove conclusively that the incidence of duty burden has not been passed on to the ultimate buyers so as to be eligible for the refund claims arising on account of finalisation of provisional assessment after allowing abatements.

  The sanction of the refund claims by the Original Adjudicating Authority without conducting verification as to whether the dealers of the Motor Cycles have not passed on the incidence of duty to the ultimate customer is not legal and proper. Refund of excess excise duty paid at the time of provisional assessments, could be legally sanctionable only to those persons which include ultimate customers who must have borne the burden of excise duty paid.

  Conclusion - The appellant failed to conclusively prove that the duty burden was not passed on to the ultimate consumers, thus affecting their eligibility for refunds.

  The appeals are allowed by way of remand.

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• 2025 (3) TMI 1343
  

  Refund of Education Cess & Secondary High Education Cess - rejection of refund of Education Cess & Secondary High Education Cess on the basis of the Hon’ble Apex Court Judgments in the case of Unicorn Industries Vs. UOI [2019 (12) TMI 286 - SUPREME COURT] - HELD THAT:- This issue has already been settled by this Bench in the appellant’s own case involving identical issue M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] wherein it has been held that the orders of the Commissioner (Appeals) is bad in law and the Tribunal has also directed the adjudicating authority to implement the orders passed by the Tribunal in the earlier round of litigation.

  The Tribunal in the appellant’s own case M/S INSECTICIDES INDIA LTD VERSUS COMMISSIONER OF CG & ST, JAMMU [2021 (11) TMI 784 - CESTAT CHANDIGARH] have allowed the claim of the appellant by relying upon the judgments of the Hon’ble Supreme Court in the case of SRD Nutrients Pvt. Ltd [2017 (11) TMI 655 - SUPREME COURT].

  Further, it is found that the appellant was also a party before the Hon’ble Apex Court in the case of SRD Nutrients Pvt. Ltd. The review filed by the Department in SRD Nutrients Pvt Ltd. was also dismissed by the Hon’ble Supreme Court. Further, it is found that before the Commissioner (Appeals) appellant has challenged only part of the adjudication order withholding/rejecting part of the refund claim whereas the Commissioner (Appeals) not only rejected the pending refund claim itself rather ordered for recovery of amount of the already sanctioned claims without any authority of law.

  Conclusion - The appellants are entitled to a refund of E.Cess and SHE Cess.

  Appeal allowed.

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• 2025 (3) TMI 1342
  

  Exemption from service tax - providing services of construction of stadium at Sector-21, Noida against contract awarded by New Okhla Industrial Development Authority - demand made on the basis of receipts shown in 26AS statement - demand of interest and penalty.

  Demand of service tax made on the basis of receipts shown in 26AS statement - period 2015-16 & 2016-17 - HELD THAT:- Construction of original work which is for the purpose of non-commercial activities for government or local or governmental authority was exempt from service tax. Governmental authority was defined as an authority established by an Act of the Parliament or a State legislature and was hundred percent in the control of Government. It was also provided that such body must perform works as mentioned in Article 243W of the Constitution.

  Noida Authority is set up by the U.P. Government in exercise of powers conferred under Section 3 of the Uttar Pradesh Industrial Area Development Act, 1976 passed by U. P. Legislative Assembly. As per Section 3(3) of the UPIAD Act, the management including chief executive will be appointed by the U.P. Government. It shows that hundred percent control of the body established under the UPIAD Act will be by the U.P. Government. As per Section 6 (e) of UPIAD Act, the function of the Authority set up under the said Act includes to provide amenities and municipal services. The above facts confirm that Noida Authority falls within ambit of governmental Authority as defined under clause 2(s) of Notification No.25/12-ST dated 20.06.2012.

  Whether a sports stadium is for non-commercial activities or not? - HELD THAT:- A stadium is a place or venue for (mostly) outdoor sports, concerts, or other events and consists of a field or stage completely surrounded by a tiered structure designed to allow spectators to stand or sit and view the event. It is also used for morning walks. Basically, construction of sports stadium is for boosting sports. Its purpose is not for any commercial activities. The above finding also finds support from the decision of the Tribunal in the case of B.G. Shirke Construction Technology Pvt. Ltd. [2013 (2) TMI 584 - CESTAT MUMBAI] held 'The Sports Stadia is used for public purpose. Merely because some amount is charged for using the facility, it cannot become a commercial or industrial construction. Even in a Children Park, entry fee is levied for maintenance of the Park. Merely because some amount is charged for using the Park, it cannot be said that it is a commercial or industrial construction. Adopting the same logic, the Sports Stadia in the present case is also a non-commercial construction for use by the public. Therefore, we are prima facie of the view that the Sports Stadium constructed for conducting Commonwealth Games, is a non-commercial construction.' - thus, sport stadium is predominantly used for purposes other than commercial.

  It is explicit from the findings that all terms and conditions specified under Notification No.25/12-ST dated 20.06.2012 as amended by N/N. 09/16-ST dated 01.03.2016 were fulfilled in the case at hand. Hence, services rendered by the Appellant were exempted from service Tax.

  Demand of interest and penalty - HELD THAT:- When the demand of tax itself is not sustainable, the demand of interest and imposition of penalty does not survive.

  Conclusion - The services provided to a governmental authority for non-commercial purposes are exempt from service tax, even if some fees are charged for maintenance or use.

  Appeal allowed.

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• 2025 (3) TMI 1341
  

  Levy of penalty on Managing Director u/r 26 of Central Excise Rule, 2002 for the omission on the part of the company in mis-declaring the goods manufactured by them - HELD THAT:- It is found that other than being the Managing Director of M/s. Ruchi Soya Industries Ltd., there is no direct involvement of the appellant and there is no allegation regarding his personal involvement. The penalty was imposed only on the ground that the Managing Director is ultimately responsible for all the affairs of the company and hence, he is also liable to be penalized.

  There are strong force in the contention raised by the appellant that there is no finding showing involvement of the appellant in mis-declaring the goods. Moreover, the issue is on classification of goods and as submitted by appellant during the investigation, the aspect of payment of central excise duty, classification etc., cannot be held as the personal responsibility and being the Managing Director, it cannot be alleged that he is personally involved without substantial evidence regarding his active involvement in the alleged suppression of facts.

  Conclusion - The imposition of a penalty on the appellant under Rule 26 of the Central Excise Rules, 2002, was unsustainable due to the lack of evidence of personal involvement.

  Appeal allowed.

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