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Central Excise - Case Laws
Showing 301 to 320 of 81793 Records
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2024 (12) TMI 1402
100% EOU - refund of unutilized CENVAT credit for High-Speed Diesel (HSD) used as fuel in their manufacturing activities - refund of the credit of Service Tax paid on Security Services utilized by the EOU.
Refund of unutilized CENVAT credit for High-Speed Diesel (HSD) used as fuel in their manufacturing activities - HELD THAT:- The issue regarding eligibility of the appellant in claiming refund of Rs. 25,80,768 paid by appellant while procuring HSD for their EOU is covered in favour of the appellant in their own case M/S. GEM GRANITES VERSUS COMMISSIONER OF CENTRAL EXCISE, BELGAUM [2016 (10) TMI 34 - CESTAT BANGALORE] where it was held that 'the Revenue's contention that in terms of definition of input given in Rule 2(k) of CENVAT Credit Rules, 2004 the appellants are not entitled to claim CENVAT credit, cannot be accepted, when the Notification No.22/2003 dated 31.3.2003 makes an EOU entitled to claim CENVAT credit on the procurement of HSD used as fuel.' - refund allowed.
Refund of the credit of Service Tax paid on Security Services utilized by the EOU - HELD THAT:- As held in large number of cases including in the case of THE COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, HYDERABAD-IV VERSUS M/S. QUALCOMM INDIA PVT. LTD. [2021 (11) TMI 72 - TELANGANA HIGH COURT], once it is admitted as eligible credit and if the respondent has reason to believe that, it is wrongly availed, Respondent could have proceeded against the appellant under Rule 14 Cenvat Credit Rules, 2004 for the recovery of irregular CENVAT credit and not to adjudicate the same while processing the refund claim - refund allowed.
Conclusion - EOUs are entitled to claim CENVAT credit on HSD used as fuel and Service Tax on Security Services.
Appeal allowed.
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2024 (12) TMI 1360
CENVAT Credit - inputs or not - bought-out items - denial on the ground that the bought-out items do not qualify as inputs under Rule 2(k) of the Credit Rules, as they are stored at the gate only and no manufacturing activity is carried out on them - scope of SCN - Inclusion of value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents - suppression of facts or not - extended period of limitation.
Admissibility of CENVAT credit on certain bought out items purchased by the respondent and supplied along with the vehicles - HELD THAT:- It is found that learned Commissioner correctly finds that the only requirement for the entitlement to avail CENVAT credit is that the inputs are capital goods must be received in the factory of manufacture of final products; the receipt of the inputs in the factory is not disputed and therefore, credit is admissible. It is further found that relying on the decision of the Hon’ble Supreme Court in the case of Mehra Brothers Vs Joint Commercial Officer [1990 (11) TMI 144 - SUPREME COURT], learned Commissioner finds that the test as to verify whether an item is an accessory or part of the vehicle is whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or as a supplementary or secondary to the main or primary importance and the other test may be whether a particular article or articles or parts can be said to be available for sale in an automobile market or shops or places of manufacture - the Commissioner applied this test and the provisions of the Rules and came to a conclusion that the items qualify to be “parts” or “accessories”.
Scope of SCN - HELD THAT:- The learned Commissioner rightly finds that the impugned items are either parts or accessories and therefore, credit is admissible before 01.03.2011 or after 01.03.2011. Authorized Representative for the Revenue tried to explain during the hearing on the basis of a sample invoice that the value of the impugned accessories is not included in the assessable value of the motor vehicles. It is found that this submission is beyond the scope of the show cause notice and the grounds of appeal. Revenue’s appeal is very clear that it is only on the grounds that learned Commissioner (Appeals) has not given any findings as to the impugned goods vis-à-vis their admissibility to CENVAT credit. Therefore, it is not open for the Revenue to set up a new case at this juncture.
Inclusion of value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents - HELD THAT:- It is found that inclusion or otherwise of the value of the accessories, on which CENVAT credit is availed, in the assessable value of the motor vehicles cleared by the respondents, is not the subject matter of the grounds of appeal. In view of the assertions by the adjudicating authority that such value of the accessories is included in the assessable value of the motor vehicles; the argument of the learned Authorized Representative does not succeed. As the Department has accepted the OIO dated 25.11.2013 and no proceedings have been initiated for further period, it is not open for the Department to dispute the admissibility in the impugned case.
Hon’ble Apex Court in the case of S.S. Engineers [2023 (7) TMI 717 - SC ORDER] held that 'Having regard to the fact that for the subsequent period, the Department has taken a stand that the bought-out items are not entered in the factory and the Assessee has not claimed credit on them, there is no case for adding their value in the assessable value and hence no proceeding need be initiated in the form of a show cause notice, we find that for the previous period, in respect of which this appeal arises, the stand of the Department cannot be contrary to what has been stated above. Hence, we do not find any merit in the appeal.'
Conclusion - Revenue's appeal, upholding the Commissioner's order that allowed CENVAT credit on the disputed items, dismissed.
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2024 (12) TMI 1359
Refund of the excess duty paid on cement supplied to institutional buyers, specifically government and semi-government entities - principles of natural justice.
Refund of Excess duty - HELD THAT:- In view of the categorical finding in the impugned order that the appellants have not submitted records and in view of the data sheets submitted by the learned Consultant, there are reasons to believe that there are supplies to other than institutional customers. It is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers.
Applicability of principles of natural justice - HELD THAT:- The Bench cannot sit in judgment over a record/ evidence to which the lower authorities were not privy to. Therefore, in the interest of justice, the issue must travel back to the original authority to verify the claim of the appellants both on the issues of merit and unjust enrichment.
Conclusion - In view of lack of clear evidence, the issue must travel back to the original authority to verify the claim of the appellants both on the issues of merit and unjust enrichment.
Appeal disposed off by way of remand.
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2024 (12) TMI 1358
Recovery of wrongfully availed CENVAT Credit - activity of trading - exempted service prior to 01.04.2011 or not - requirement to comply with Rule 6 of the Rules of 2004 - time limitation.
HELD THAT:- The Bangalore Bench of this Tribunal in the case of Commissioner of Central Excise, Bangalore Vs. Lenovo (India) Pvt. Ltd. [2021 (11) TMI 899 - CESTAT BANGALORE], had dealt with the present issue and also considered different views expressed by other Co-ordinate Benches. Since the appellants had bonafide belief that exempted service should not be considered as trading activity for the period prior to 01.04.2011, not entering the CENVAT particulars in the ER-1 return, even though reflected in the internal records, would not call for invocation of the extended period of limitation. In such circumstances, the show-cause notice was required to be issued within the normal period of one year i.e., from the date of taking the CENVAT Credit of the disputed service. Since the show-cause notices were issued beyond the normal period of one year, in our considered view, the same are barred by limitation of time insofar as proceedings were initiated for recovery of wrong availment of CENVAT Credit for the period upto 31.03.2011.
It is found that the learned adjudicating authority has not specifically discussed about this aspect of reversal of CENVAT Credit at the ISD stage, as claimed by the appellants. Therefore, the matter should go back to the original authority for ascertaining the fact as to whether, the appellants had reversed the common input services at the time of issuance of invoices by the ISD and that such credit was not distributed to the manufacturing unit located at Pune for availment of CENVAT Credit of Service Tax in respect of the common input services.
Conclusion - Since the appellants had bonafide belief that exempted service should not be considered as trading activity for the period prior to 01.04.2011, not entering the CENVAT particulars in the ER-1 return, even though reflected in the internal records, would not call for invocation of the extended period of limitation - For the period after 01.04.2011, the matter is remanded back to the original authority for ascertaining the fact as to whether, the appellants had reversed the CENVAT Credit at the ISD level and CENVAT Credit has not been distributed to the manufacturing unit located at Pune.
Appeal disposed off by way of remand.
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2024 (12) TMI 1357
Clandestine removal of polished vitrified tiles - evasion of duty - allegations primarily based upon the private documents/records recovered from the premises of M/s K.N. Brothers/ Shree Ambaji Enterprises, Shroff and office premises of Shri Pravin Shirvi, Morbi, Broker/middlemen - opprotunity of cross-examination not provided - reliability of statements - violation of principles of natural justice.
HELD THAT:- On going through the relied upon documents and documents scanned in impugned show cause notice it is found that in the said documents mentioned the words “PS” but in the table prepared by the DGGI, they have mentioned name of Shri Pravinbhai R. Shirvi and in total amount of cash paid to Shri Pravinbhai R. Shirvi aggregates to Rs. 18,21,600/- only whereas on the other hand vide show cause notice it is alleged that total amount of cash aggregating to Rs. 15,62,92,335/- was paid to the Authorized person of Appellant, the same is completely unbelievable. It is also found that in present matter to find out the truth, appellant requested the cross-examination of Shri Jayesh Mohanlal Solanki, Proprietor of M/s. K.N. Brothers, Rajkot, Shri Suresh Girdharbhai Gangwani, Proprietor of M/s. Shree Siddhnath Agency, Rajkot, Shri Lalit Ansumal Gangwani, actual owner of M/s KN Brother and also other persons. However despite such request, cross-examination was not afforded by the Ld. Lower Adjudicating Authority. When statement of a third party is relied upon against an assessee, the assessee has a right to cross-examine such witness otherwise, statement of the concerned person, and in any case, statement of a said persons, could not have been relied upon for holding anything against the appellant.
In the circumstances, it was incumbent upon adjudicating authority to follow the mandate of section 9D of the Act by way of examining the witness and thereafter giving opportunity to the appellant to cross-examine them. Having disregarded this mandate of section 9D, results is to giving up on the said statements for proving the truth contained therein.
It is well settled law that though the statements carry good persuasive value but such untested statements of third parties cannot be made stand-alone basis for arriving at an adverse conclusion against the assessee. Though an admission or a statement is extremely important piece of evidence but the same has to bear the test of veracity through the tool of cross examination - In the case of NU Trend Business Machine Pvt Ltd v. Commissioner of Central Excise, Chennai, [2001 (11) TMI 134 - CEGAT, CHENNAI], it was held that the demand based on the statements of persons who have not turned up for cross-examination, is unsustainable.
The entire evidence referred to by both the adjudicating authority in the present matter stand on a doubtful platform and cannot be made the basis for confirming huge demands on the ground of clandestine activity. Similarly, in the case of CCE, Chandigarh-1 v. Shingar Lamps Pvt. Limited [2010 (3) TMI 277 - PUNJAB & HARYANA HIGH COURT], the Hon’ble High Court held that the private records which have been discovered during the raid may not be sufficient for holding clandestine production and removal but there should be some positive evidence suggesting clandestine production and removal.
Conclusion - The allegations of clandestine removal are required to be established by production of positive and tangible evidences and should not be arrived at on the basis of assumptions and presumptions - Case of the Revenue in the present matter is only based upon the records of Shroff and Broker/middleman which even do not contain the name of the appellant and statements which are not supported by any independent corroborative evidence. The whole demand is theoretical.
The impugned order cannot be sustained and accordingly the same is set aside - Appeal allowed.
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2024 (12) TMI 1298
Liability of assessee to pay penalty - non-application of mind - violation of principles of natural justice - HELD THAT:- The contention of the appellant that the Commissioner had passed order basing on the statements recorded during inspection is not tenable under law on the ground that the Commissioner after verification of the records passed the order. The finding recorded by the Commissioner is not based on the statement recorded during the inspection alone, but is based on other material available on record.
In an appeal under Section 35G of the Central Excise Act, 1944, a finding of fact cannot be interfered with unless and until the same is shown to be perverse. The finding recorded by the authorities under the Act can by no stretch of imagination be termed as perverse.
The substantial question of law is answered against the assessee in favour revenue - there are no merit in the appeal - appeal dismissed.
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2024 (12) TMI 1297
CENVAT Credit - common inputs/ input services used for manufacture of dutiable and exempted goods - non-maintenance of separate account for dutiable and exempted activity as envisaged under Rule 6(2) of CCR, 2004 - non-compliance with the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 - wilful suppression of facts or not - extended period of limitation.
CENVAT Credit - HELD THAT:- It is found that all the documents were either not produced before the adjudicating authority or adjudicating authority has not recorded any findings on any of these documents in the impugned order. The fact that these documents show is that trading activities were undertaken by the appellant from separate premises located at Kanpur, and separate accounts were maintained for the trading activities undertaken.
Neither in the show cause notice nor in the impugned order we find that the manner of usage of the services alleged to used both for trading activities and manufacture of the goods have been brought out. The basic quest which requires to be examined before invoking Rule 6 of The CENVAT Credit Rules, 2004 is that there should be common inputs/ input services used for manufacture of dutiable and exempted goods or for the provision of both taxable and exempted services. There are nothing recorded in the impugned order to the usage of common services for trading activities and manufacture of dutiable goods.
No evidence has been adduced in the show cause notice to establish the usage of common services for the provision of taxable and exempted service or for the manufacture of dutiable and exempted goodsit is not required to even remand this matter, for examination in light of the documents submitted.
Extended period of limitation - penalty - HELD THAT:- As there are no merits in the demand made, no finding recorded on the issue of limitation raised by the appellant in the appeal. As demand is itself set aside the penalty imposed set aside.
Conclusion - The absence of any finding to the effect of common services usage invalidates the demand under Rule 6(3) of the CENVAT Credit Rules, 2004. No evidence has been adduced to establish the usage of common services for the provision of taxable and exempted service or for the manufacture of dutiable and exempted goods. No finding reorded on time limitation and penalty.
Appeal allowed.
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2024 (12) TMI 1296
Excisability of intermediate goods - Whether sugar syrup having sugar content of 78.2% by weight emerged as an intermediary product, during the course of manufacture of final product viz., Biscuits which is exempted, is excisable and leviable to duty as the benefit of N/N. 67/1995 dated 16.03.1995 would not be available to inputs used in the exempted final product? - extended period of limitation.
Excisability of intermediate goods - HELD THAT:- In Karnataka Soaps & Detergents Ltd. [2017 (10) TMI 660 - SUPREME COURT] explaining the scope of marketability their Lordships observed that 'Marketability’is thus essentially a question of fact to be decided on the facts of each case. There can be no generalisation. The fact that goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purposes of Section 3 of the Act. It is also not necessary that the goods in question should be generally available in the market. The marketability of articles does not depend neither upon the number of purchasers nor is the market confined to the territorial limits of this country.'
Thus, the original authority had sufficiently established the test of marketability.
Extended period of limitation - HELD THAT:- The sugar syrup manufactured by the appellant, during the course of manufacture of exempted product namely, biscuits, is stable and marketable; hence, liable to duty being an excisable goods - the issue relates to interpretation of law, therefore, invoking of extended period of limitation cannot be sustained and the demand be restricted to the normal period of limitation.
Conclusion - Revenue’s appeal is partly allowed to the extent of confirming excisability of sugar syrup manufactured at the intermediate stage of manufacture of biscuits, an exempted product, and the demand be limited to the normal period of limitation. No penalty is imposable on the appellant.
Appeal is disposed of.
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2024 (12) TMI 1239
Recovery of the excess availed credit along with interest and for imposing penalty - breach of Rules 4 and 9 of the Cenvat Credit Rules 2004 (CCR 2004) - suppression of facts or not - extended period of limitation - HELD THAT:- This is a case where the appellant had irregularly availed CENVAT credit by taking double credit on the same invoice and also by taking credit over and above what is specified in the invoice input. They had thus breached Rules 4 and 9 of the Cenvat Credit Rules 2004 (CCR 2004) and had committed a blame worthy act. The excess credit was recoverable under Rule 14 of CCR 2004.
Interest and penalty - HELD THAT:- The appellant has reversed the credit even before issue of SCN and had sufficient credit balance and had not utilised such credit for payment of duty as verified and stated by the Ld. Adjudicating Authority in the OIO. In such circumstances no interest was payable by them as per the ratio of the Hon’ble Karnataka High Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] - Considering that the unit is a public sector unit and that the excess credit was not availed a lenient view is called for. In the facts and circumstances of the case, the interest demanded and the fine imposed is set aside.
Extended period of limitation - HELD THAT:- It is settled law that to invoke willful suppression, fraud etc, there must be some positive act which betrays a negative intention of willful default from the side of the assessee to establish a charge of suppression, fraud etc. and not merely an error made. No such act has been shown in the impugned order.
The impugned order is modified on the above terms and the interest and penalty set aside - Appeal allowed.
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2024 (12) TMI 1238
Denial of CENVAT Credit - duty paying documents - case of Revenue is that appellant has availed input service tax credit on the basis of invoices which are not the prescribed documents as per Rule 4(7) and Rule 9 of Cenvat Credit Rules, 2004 (CCR) as well as Rule 4(a) of Service Tax Rules, 1994 - denial of credit also on the ground that challans deposited against C&AG report based whereupon the said Cenvat credit has been availed, are not the prescribed documents as per Rule 9(1)(bb) of CCR, 2004 - Extended period of limitation.
The denial of Cenvat credit of Rs. 16,12,208/- on the ground that the invoices issued by the input service providers are not the valid documents - HELD THAT:- Cenvat credit cannot be denied merely on the ground that the documents does not contain all the particulars required to be contained in the invoice when there is no dispute regarding receipt of service - Reference made to decision in the case of Kemwell Biopharma Pvt. Ltd. Versus Commr. of C.Ex. & ST, LTU, Bangalore [2016 (6) TMI 229 - CESTAT BANGALORE]. In this case, the Tribunal hold that mere non-mentioning of registration number of service provider on invoices is only a procedural lapse with regard to duty paying documents. In absence of any evidence of services not having been received or utilized, substantive benefit of credit, not deniable for such procedural lapse.
In the present case also there is no dispute regarding receipt of input services as well as tax paid on such services. The only allegation is that the address is wrongly mentioned on the invoices. Admittedly, the appellant is Input Service Distributor. Resultantly, the substantive benefit of credit provided in Rule 3 of CCR cannot be denied by resorting to procedural requirements under Rule 4(7) and Rule 9(2) of CCR Rules. It is also an apparent fact on record that those suppliers had mentioned the incorrect address but once the said discrepancy was noticed the service providers rectified the mistake and issued the supplementary invoices by mentioning the correct address of the appellant. The supplementary invoices are also on record. It is held that Cenvat credit availed on such invoices has rightly been availed - the order directing reversal of Cenvat credit is therefore, held liable to be set aside.
The denial of Cenvat credit of an amount of Rs. 32,95,447/- alleging that the challans deposited against C&AG report based whereupon the said Cenvat credit has been availed, are not the prescribed documents as per Rule 9(1)(bb) of CCR, 2004 - HELD THAT:- Apparently the entire liability of service tax was paid by the appellant under Reverse Charge Mechanism vide the said challans pursuant to C&AG audit report. The said challans evidencing the payment of service tax are enclosed on record. Once the payment of tax is made under RCM, it is Rule 9(1)(e) as shall be relevant.
Rule 9(1)(bb) of CCR which provides that Cenvat shall be taken by manufacturer/service provider/input service distributor on the basis of supplementary invoices/bill or challan issued by the provider of output service, except where the additional amount of tax be recovered from the provider of service on account of non-levy or non-payment or short levy or short payment by reason or fraud or collusion or suppression of facts with intent to evade the payment of service tax. On the other hand, Rule 9(1) (e) CCR provides that Cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, inter alia, on the basis of challan evidencing payment of service tax, by the service recipient as the person liable to pay service tax. Perusal of both these provisions when read in light of the fact that the impugned amount of service tax was paid by the appellant under Reverse Charge Mechanism it becomes clear that Rule 9(1)(bb) shall not be applicable - it is held that department has wrongly invoked Rule 9(1)(bb) while denying the Cenvat credit of Rs. 32,95,447/- confirmation of said demand is, therefore, liable to be set aside.
Extended period of limitation - HELD THAT:- Admittedly the appellant has been regularly filing his returns mentioning the amount of Cenvat credit availed. There can be no possibility of any suppression as is alleged by the department. It is also an admitted fact that the service tax was duly been paid under forward or as well as under Reverse Charge Mechanism vis-à-vis issue No. (1) and issue No. (2) respectively. The question of any evasion of tax is, therefore, absolutely redundant - no evidence is produced by the department for proving any positive act of the appellant which may amount to suppression - there was no occasion to invoke the extended period of limitation.
The impugned order is hereby set aside. Consequent thereto, the appeal is hereby allowed.
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2024 (12) TMI 1237
Levy of penalty u/r 209A can be imposed on partnership firm - HELD THAT:- Reliance placed in the case of Commissioner v Woodmen Industries [2004 (7) TMI 637 - SC ORDER] where it was held that 'The Tribunal further relying on an earlier order in the case of Aditya Steel Industries [1996 (2) TMI 232 - CEGAT, MADRAS] held that penalty under Rule 26 of Central Excise Rules, 2002 was imposable only on a person and not on a firm.'
Thus, penalty under 209A which is pari materia of Rule 26, penalty cannot be imposed on partnership firm.
As regard the penalty on the partner, it is found that it is settled by the Hon’ble Gujarat High Court in the case of Jay Prakash Motwani [2009 (1) TMI 501 - GUJARAT HIGH COURT] that in case of partnership firm penalty on the partner cannot be imposed. Accordingly, penalties on both the appellants are not sustainable only on the above finding.
The penalties are set aside - appeal allowed.
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2024 (12) TMI 1236
Benefit of exemption from excise duty on RMC manufactured at site under Sr. No. 144 of Notification No. 12/2012-CE dated 17.03.2012, for the period prior to amendment dated 01.03.2016 - Invocation of extended period of limitation.
Whether benefit of exemption from excise duty is available on RMC manufactured at site under Sr. No. 144 of N/N. 12/2012-CE dated 17.03.2012, for the period prior to amendment dated 01.03.2016. i.e. when the exemption was granted to "Concrete Mix manufactured at the site of construction"? - HELD THAT:- This issue was carried in litigation in various judgments and there were conflicting issues on this issue. Later on the Hon’ble Apex Court in the case of L&T Limited [2015 (10) TMI 612 - SUPREME COURT] finally decided the matter that the exemption is available to only ready mix concrete and not the concrete mix. It is also observed that subsequently the Government has brought the exemption also for concrete mix, vide Notification No. 12/2012-CE dated 17.03.2012 under Serial No. 144. This shows that there was an ambiguity about the exemption on concrete mix vis a vis ready mix concrete. Considering all these fact and applying the judgments, learned Commissioner (Appeals) has held the demand being time barred. Therefore, there are no infirmity in setting aside the demand on the ground of time bar by Commissioner (Appeals) in the impugned order.
Extended period of limitation - HELD THAT:- On the identical issue Tribunal in the case of Reliance Industries Limited [2022 (3) TMI 400 - CESTAT AHMEDABAD] also held the demand as time bar.
Thus, the ratio of the above judgment is directly applicable on the issue of demand being time bar. Accordingly, the learned Commissioner (Appeals) has rightly set aside the demand of extended period. Accordingly the impugned order to the extent it set aside the demand for the extended period is upheld.
Revenue’s appeal is dismissed.
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2024 (12) TMI 1235
Reversal of CENVAT Credit - liability to pay an amount equal to 6% of the value of exempted goods (electricity) under Rule 6(3)(i) of the CENVAT Credit Rules, 2004 - common inputs used for generation of electricity and supply of the same to their sister concerns - electricity falls under the category of exempted goods or not - extended period of limitation.
HELD THAT:- Hon’ble Karnataka High Court in case of Commissioner Central Excise and Service Tax, Banglore Vs. Bill Force Pvt Ltd [2011 (4) TMI 969 - KARNATAKA HIGH COURT] has held that the once the CENVAT Credit has been reversed by the assesse, it amounts to not taking of the CENVAT Credit on inputs.
The learned Adjudicating Authority has not quantified the amount of the duty which is to be recovered from the appellant and therefore, same is not sustainable on the merit
The appellant was entitled for CENVAT Credit of common inputs used for generation of electricity and supply of the same to their sister concerns.
The impugned Order-In-Original is not sustainable on the merits on this issue and therefore the same is set aside - appeal allowed.
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2024 (12) TMI 1192
Valuation of Excise duty - two firms are related to one another as per Schedule 1A to the Clause (c) of Section 6 of the Companies Act, 1956 and as provided under Section 4(3)(b) of the Act or not - requirement to value in terms of Section 4(1)3(b)(ii) of Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation Rules or not - HELD THAT:- The same issue has come for consideration before this Bench in the appellant’s own case for the demand raised for the period 2003- 04 and 2005-06.
The Bench in HINDUSTAN PUMPS & ELECTRICAL ENGINEERING PVT. LTD., MALKOH MARKETING PVT. LTD. VERSUS C.C.E. & S.T. - PANCHKULA, C.C.E. DELHI-III [2018 (10) TMI 532 - CESTAT CHANDIGARH] held that 'the appellant are not related persons in terms of section 4(3)(b)(ii) of Central Excise Act, 1944 and provisions of Rule 9 of the Central Excise Valuation Rules, 2000, are not applicable to the facts of this case, therefore, the impugned orders are not sustainable in the eyes of law.'
The issue is squarely covered in favour of the appellants and the impugned orders cannot be sustained - Appeal allowed.
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2024 (12) TMI 1191
Levy of penalties u/r 26 of Central Excise Rules, 2002 - non-payment of duty by the manufacturer of goods on job work basis by M/s Paras Trading Company - HELD THAT:- As per the facts of the case, it is found that M/s Paras Trading Company was involved in direct sale on principal to principal basis as well as on job work on behalf of the Rcuhi Soya Industries as well as Cargill India Pvt Ltd. The appellant was under bona fide belief that the direct sale is covered under SSI exemption for the reason that as per their bonafide belief job work goods being not dutiable in their hands is not includible in the aggregate value of the overall clearances of the goods. For this reason M/s Paras Trading Company has not discharged the duty.
It is also found that the issue of excise duty liability on the job work was under serious dispute as there were conflicting judgments and subsequently this CESTAT’s Larger Bench in the case of THERMAX BABCOCK AND WILCOX LTD., THERMAX LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2017 (12) TMI 266 - CESTAT MUMBAI] settled the issue holding that job worker is liable to pay duty even the goods is manufactured on job work basis. The larger bench judgment was delivered subsequent to the passing of the impugned order in the present case.
It is also observed that M/s Paras Trading Company has made legitimate transaction by issuing of invoices and all the transactions and payment particulars are recorded in their books of accounts. This is not case of clandestine removal such as removal of goods without issuing any documents. Therefore, there is no doubt that the appellant has rightly entertained the bona fide belief even though they were liable to pay the excise duty.
When the goods were received by the principal manufacturers under proper documents, if any lapse on the part of the job workers the same cannot be attributed to the principal manufacturer or even to their employees. Therefore, irrespective of any offence whether or not committed by the M/s Paras Trading Company these two appellants cannot be penalized under Rule 26 - the appellants are not liable for penalty under Rule 26 of Central Excise Rules, 2002.
The penalties on all the present appellants are set aside - Appeals are allowed.
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2024 (12) TMI 1190
Determination of assessable value of Lubricating Oils and other products - requirement to adopt value as provided under Rules 7 of Central Excise Valuation Rules, 2000 read with section 4 of the Central Excise Act, 1944 - extended period of limitation.
Vlauation of goods - HELD THAT:- It is a matter of record that they have adjusted the duty payments considering sale price on which Central Excise duty have been discharged at the factory gate and the sale price on which the goods have actually been cleared ex-C & F depot. There have been differences both on positive and negative sides, the appellant have paid excess Central Excise Duty on certain goods that is where the price at factory gate has been taken at higher side than the prices on which the goods ex-C & F depot have been cleared and that amount has been adjusted by them towards the short payment of duty taking ex-C & depot price. The appellant vide their letter dated 18.11.2009, 04.04.2010, 12.08.2011, 05.09.2011, 23.12.2011 and 20.01.2012 have submitted all the relevant information of the prices on which goods were cleared at the factory gate as well as the ex- C & F depot price. The show cause notice dated 16.04.2013 has been issued demanding short payment of Central Excise Duty for Financial year 2008-09 to December 2012.
Extended period of limitation - HELD THAT:- For invoking extended time proviso under section 11A(4), the elements of fraud, collusion, willfull mis-statement, suppression of facts or contravention of any provisions of this act or rules with an intention to evade payment of Central Excise Duty need to be presented. The facts of the matter clearly speak that the appellant on their own informed the department since 18.11.2009 giving all the details of ex-factory prices as well as ex-C & F depot prices. In such circumstances it is wrong on the part of the department to invoke the extended time proviso under section 11A(4) of the Central Excise Act, 1944 - the impugned show cause notice and the orders issued confirming the show cause notices are legally not sustainable on the point of time limitation.
The impugned order-in-appeal is not sustainable and therefore set aside - appeal allowed.
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2024 (12) TMI 1189
Classification of product called ‘Zymegold Plus Granules’ - classifiable under Central Excise Tariff item 3101.0099 as fertilizer or as plant growth regulator under Central Excise Tariff item 3808.9340? - HELD THAT:- The matter stands covered by the coordinate bench decision in relation to the same product in the matter of M/S. GODREJ AGROVET LTD. VERSUS COMMISSIONER OF CGST, KOLHAPUR [2023 (5) TMI 299 - CESTAT MUMBAI] wherein the same product i.e. ‘Zymegold Plus’ was involved and it was held that 'The impugned order is liable to be set aside as the products in issue are fertilizers and therefore the appellants have rightly classified their products.'
Thus, the product is classifiable as claimed by the party under the Central Excise Tariff Item 31010099 and the same is to be treated as a fertilizer has claimed by them - appeal allowed.
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2024 (12) TMI 1135
Whether the job worker is liable to pay central excise duty when the job worker has received raw material against challans under Rule 57 F (2) of the Central Excise Rules, 1944? - HELD THAT:- The identical issue was taken up by the Supreme Court after the High Court passed an order in favour of the revenue in Kartar Rolling Mills v. Commissioner of Central Excise, New Delhi [2006 (3) TMI 63 - SUPREME COURT], and the Supreme Court held that 'Since the notification came into effect from 11-4-1994, the benefit of the notification cannot be extended to the appellants retrospectively w.e.f. 1-3-1994.'
The demand for central excise duty ss affirmed by the Commissioner (Appeals) in the impugned order and subsequently upheld by the Tribunal, with a reduction in the penalties imposed upon the assessee - The reference is accordingly answered in favour of the revenue.
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2024 (12) TMI 1134
Liability of appellant to pay interest u/s 11AA of the Central Excise Act, 1994 when neither the show cause notice nor the adjudication order therein propose levy of interest - principles of natural justice - HELD THAT:- When, admittedly, the said provision was not there in the statute at the time of issuance of show cause notice nor specified in the Order-in-Original therein. Admittedly the said provision were inserted w.e.f. 26.5.1995 vide Section 73 of the Finance Act, 1995 which provides that “Where a person chargeable with duty determined under sub-section (2) of Section 11A, fails to pay such duty within three months from the date of such determination, he shall pay in addition to the duty, interest at the rate not below 18% and not exceeding 36% per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such duty from the date immediately after the expiry of the said period of three months till date of payment of such duty.”
On identical issue, a co-ordinate Bench of the Tribunal in the matter of Excel Tyre & Rubber Products vs. CCE, Mangalore [2016 (8) TMI 1070 - CESTAT BANGALORE] after going through various decisions cited by the revenue in support of their submission for charging interest, including the decision of Prabhat Zarda Factory Ltd. [2002 (2) TMI 228 - CEGAT, NEW DELHI], has held that interest cannot be demanded from the appellant therein which was never resorted to either in the show cause notice or in the Order-in- Original - the views taken therein agreed upon.
The department cannot deduct and adjust or charge any interest which was neither proposed in the show cause notice nor imposed in the Order-in-Original by the Adjudicating Authority - the impugned order is set aside - Appeal allowed.
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2024 (12) TMI 1133
Availment of MODVAT/CENVAT Credit - Suppression of manufacturing details - separate financial records were not maintained in respect of exempted products and dutiable products - violation of various provisions contained in Rule, 57 of the then Central Excise Rules, 1944 read with Rule, 12 of the CENVAT Credit Rules, 2001 and proviso of Section 11A of the Central Excise Act - HELD THAT:- Modified Value Added Tax (MODVAT) was introduced in 1986 in India that has taxed the value addition to a product and not to the product itself. A manufacturer pays duties on the inputs procured by it and capital goods purchased by it for the purpose of manufacturing final product(s) on which he pays the duty and the duty paid by him on its inputs and capital goods are credited to its account so as to enable him to adjust the said amount at the time of payment of duty on the final product, so that the ultimate consumer will not suffer the burden of duty liability again & again on the product purchased by him/her and also on all its components, those were used to manufacture the final product.
Appellant had already paid more than ₹11 lakhs for the relevant period in addition to what was taken in total towards accumulated CENVAT Credit, which of course is not due to it legally, as per provision of law but judicial decision is consistent on this issue starting from what is being relied on by this Tribunal in its final order dated 21.11.2005 namely the case of Narayan Polyplast (Respondent) [2004 (11) TMI 112 - SUPREME COURT], Punjab Tractors Ltd. [2005 (2) TMI 141 - SUPREME COURT] and Narmada Chematur Pharmaceuticals Ltd. [2004 (12) TMI 93 - SUPREME COURT] and the one passed in CENVAT regime namely Commissioner of Central Excise Vs. Ajinkya Enterprises [2012 (7) TMI 141 - BOMBAY HIGH COURT], as relied upon by learned Counsel for the Appellant, wherein it had been consistently held that once duty on final product has been accepted by the Department, CENVAT Credit availed need not be reversed even if the activity does not amount to manufacture.
In the order passed by Hon'ble Bombay High Court reservation was expressed on the ground that Revenue neutral situation were discussed in Narmada Chematur Pharmaceuticals Ltd. case but this judgment is cryptic in which discussion on the same was missing.
Concurring with the findings of the Commissioner that not a single final product was dutiable, invocation of extended period would result in the same situation as that of a duty assessment for normal period but having regard to the fact that there is a clear observation of Hon'ble Bombay High Court that specific finding concerning allegation of suppression of material fact was available in the order passed by the Commissioner, that has not been dealt with properly by the Tribunal, it is considered worthwhile to reiterate that at no point of time for the entire extended period covering calendar month from March 1997 to August 2001, final products manufactured by Appellant were dutiable and after analysing with reference to judicial precedent on the legality of availment of inadmissible credit that was adjusted against payment of tax on non dutiable products, nothing survived to confirm any liability of dues of any kind on the Appellant, who though had not mentioned while registering under Excise Act about its plan to manufacture vegetable edible oil that was subjected to nil rate of duty had filed periodical intimation under Rule, 173B of the Central Excise Rules, 1944 since 24.11.1997 after started manufacturing after March 1997, in which event for irregularity in applying for registration Appellant could have been prosecuted but that would never justify invocation of extended period.
The order passed by the Commissioner of Central Excise, Pune-III is hereby set aside - Appeal allowed.
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