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Central Excise - Case Laws
Showing 341 to 360 of 81813 Records
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2024 (12) TMI 1022
Classification of goods - pure coconut oil, packaged and sold in small quantities ranging from 5 ml to 2 litres - classifiable as ‘Edible oil’ under Heading 1513, titled ‘Coconut (Copra) oil, etc.’, in Section IIIChapter 15, or as ‘Hair oil’ under Heading 3305, titled ‘Preparations for use on the hair’, in Section VI-Chapter 33, of the First Schedule to the Central Excise Tariff Act, 1985?
HELD THAT:- Presently, it is an admitted fact that pure coconut oil is suitable for multiple uses. That notwithstanding, when a specific heading was created in Chapter 15, viz., Heading 1513, for ‘coconut oil’ along with other oils, it would not stand excluded therefrom so as to be classified as a cosmetic product under Heading 3305 in Chapter 33 in Section VI of the First Schedule, unless all the conditions required therefor are satisfied. As already noted, such conditions formed part of Chapter Note 2 in Chapter VI of the First Schedule itself, prior to the 2005 amendment, but after that amendment, whereby the said Chapter Note was brought into conformity with Chapter Note 3 in Chapter 33 of the HSN, the Explanatory/General Notes in the HSN in relation to the said Chapter Note would have to be fully satisfied. In effect, not only must the coconut oil be suitable for use as ‘hair oil’, but it must also be put in packaging sold in retail for such particular use, i.e., as hair oil.
The mere fact that coconut oil is also capable of being put to use as a cosmetic or toilet preparation, by itself, would not be sufficient to exclude such oil from the ambit of ‘coconut oil’ and subject it to classification as ‘hair oil’ as ‘coconut oil’ is name-specific. It is not in dispute that the packaging of the coconut oil in the cases on hand clearly demonstrated that it was being sold as ‘edible oil’ and all parameters that had to be met in that regard were duly complied with - edible oil would have a shorter shelf life than oil meant for cosmetic purposes and must meet the Indian Standards Specifications prescribed for edible oil which are different from the standards for hair oil. Significantly, the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, provide that ‘edible oil’ can be packed in specified sizes of 50 ml, 100 ml, 200 ml, 500 ml, 1 litre or 2 litres.
Small-sized containers are a feature common to both ‘edible oils’ as well as ‘hair oils’. Therefore, there must be something more to distinguish between them for classification of such oil, be it under Chapter 15 or under Chapter 33, other than the size of the packing - Reference may be made to Meghdoot Gramodyog Sewa Sansthan, U.P. vs. Commissioner of Central Excise, Lucknow [2004 (10) TMI 93 - SUPREME COURT], wherein this Court held that the mere fact that the product in that case was sold in a packing depicting a lady with flowing hair was not determinative of such product being intended as a preparation for use on the hair. This Court considered the composition and curative properties of the product to ultimately conclude that the product was classifiable as a ‘medicament’ under Heading 3003 in Chapter 30 of the First Schedule.
The argument of the Revenue that pure coconut oil should invariably be classified under Heading 3305 is, therefore, liable to be rejected. This argument completely loses sight of the General/Explanatory Notes in relation to Chapter Note 3 in Chapter 33 of the HSN and the fact that the said Chapter Note 3 is identical to Chapter Note 3 in Chapter 33 of the First Schedule to the Act of 1985. It is for the Revenue to take a stand by way of legislative action in the event it chooses to treat pure coconut oil marketed in small quantities differently from ‘Coconut oil’ in Heading 1513. Having failed to do so and given the fact that the relevant headings in the First Schedule to the Act of 1985 are corresponding with the entries in the HSN, there can be no distinction drawn between the two and the Explanatory Notes in the HSN would have to be given due effect while interpreting Heading 1513 in the First Schedule to the Act of 1985. In consequence, the coconut oil marketed and sold by the respondents during the relevant period must necessarily be classified as edible oil.
Thus, pure coconut oil sold in small quantities as ‘edible oil’ would be classifiable under Heading 1513 in Section III-Chapter 15 of the First Schedule to the Central Excise Tariff Act, 1985, unless the packaging thereof satisfies all the requirements set out in Chapter Note 3 in Section VI-Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985, read with the General/Explanatory Notes under the corresponding Chapter Note 3 in Chapter 33 of the Harmonized System of Nomenclature, whereupon it would be classifiable as ‘hair oil’ under Heading 3305 in Section VI - Chapter 33 thereof.
The impugned orders, holding to that effect, therefore do not brook interference on any count - The appeals are bereft of merit and are accordingly dismissed.
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2024 (12) TMI 1021
Seeking deletion of respondent no. 2 from the array of parties - HELD THAT:- There is no objection from the other side - The name of respondent no. 2 be deleted from the array of parties at the risk of petitioner.
Amended memo of parties be filed accordingly.
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2024 (12) TMI 1020
Process amounting to manufacture or not - appellant imported ink in bulk and procured the container form third parties in open market - it was held by CESTAT that 'the activity undertaken by the appellant does not amount to manufacture' - HELD THAT:- There are no reason to interfere with the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal, Chandigarh.
The Civil Appeals are, accordingly, dismissed.
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2024 (12) TMI 1019
Denial of CENVAT Credit on “Engraved Printing Cylinder” & “Copper Engraved Cylinder” - denial on the ground that such Cylinder were not liable to pay the excise duty although the supplier from whom the Respondent-Assessee has purchased these goods has wrongly paid the duty, since these goods were exempted and no duty was required to be paid by the supplier - HELD THAT:- The Tribunal in paragraph 4 of its order has given a finding that there is no evidence on record that the payment of duty by the supplier was questioned / challenged / disputed by their jurisdictional officer and since the payment of duty by the supplier is found to be legal and correct, the Respondent-Assessee cannot be denied benefit of CENVAT credit.
The learned counsel for the Appellant-Revenue has not challenged this finding of fact as incorrect. Therefore, on this very limited ground since these findings are not challenged and this being a finding of fact rendered by the final fact finding authority, no substantial questions of law can be said to arise from the impugned Tribunal’s order.
Secondly, the Tribunal in the impugned order has followed the decision of this Court in the case of THE COMMISSIONER, CENTRAL EXCISE GOA, VERSUS M/S. NESTLE INDIA LTD., [2011 (6) TMI 164 - BOMBAY HIGH COURT] and its own decision in the case of C.C.E. & S.T. -VAPI VERSUS KRIS FLEXIPACKS PVT LTD (VICE-VERSA) [2023 (7) TMI 943 - CESTAT AHMEDABAD]. Nothing has been brought to our notice that the decision of the Tribunal in the case of Kris Flexipacks Pvt. Ltd. has been challenged by the Appellant-Revenue before the higher forum. Therefore, even on this count, no substantial questions of law would arise since the order of the Tribunal in the case of Kris Flexipacks Pvt. Ltd. has been accepted.
The appeal of the Appellant-Revenue is dismissed.
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2024 (12) TMI 1018
100% EOU - Refund claim - disallowance of re-credit of cenvat in respect of certain input/input services - non-production of documents in respect of credit availed through ISD - non-application of mind - violation of principles of natural justice - HELD THAT:- It is seen from the impugned Orders of the Commissioner (Appeals) dated 18-11-2016 that the learned Commissioner (Appeals) has recorded a finding that the appellant has not produced any valid documents establishing their claim and that it was not evidenced that they had produced the necessary documents before the lower authority also and further that for want of these documents the aforesaid claim involving amount to the extent involved are liable for rejection. It is found from the records that the appellant has produced a letter dated 11-07-16 stating that they have enclosed three flat files as documents pertaining to their cenvat refund claim.
Further, as regards the grounds of non-issuance of show cause notice, the learned appellate authority has put the onus on the appellant to seek clarity from the refund sanctioning authority and has also stated that having preferred the appeals it is not open for them to clamour for observance of principles of natural justice. These findings of the learned appellate authority are erroneous and are contrary to the established principles of natural justice, which would require that if the decision is to reject the claim for various reasons, the applicant/claimant who will be adversely affected by the decision, ought to be served a notice requiring him to show cause as to why such a rejection ought not to be made, before any such decision is taken.
In any event, it is not for this Tribunal to go into the initial factual matrix of the claim, to come to any conclusion whether the evidence was correct or not, which would be better left to the adjudicating authority who are empowered and equipped to look into the documents, records, invoices and other evidences and all other relevant aspects. This factual verification of the documents and evidences submitted along with the claim has to be done by the adjudicating authority before recording a finding, and only thereafter would the stage of applying judicial precedents to the matter arise.
Since, these claims need to be considered by appreciating the factual matrix, we are of the considered view that the impugned orders in appeal have to be set aside and the matter remanded back to the file of the Original Authority. Hence, without expressing any opinion on the merits of these refund claims, the orders of both the lower authorities are set aside and the matter remanded back to the adjudicating authority to re-consider the issue afresh after following the principles of natural justice bearing.
Appeal allowed by way of remand.
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2024 (12) TMI 943
Delay in adjudication of show cause notices for more than 18 years - HELD THAT:- Series of decisions taken a view that if the show cause notice is transferred to the call book then it was incumbent upon the Revenue to have informed the Petitioner. Having not informed, this ground for justifying the delay in adjudication cannot be accepted.
Reliance can be placed in COVENTRY ESTATES PVT. LTD. VERSUS THE JOINT COMMISSIONER CGST AND CENTRAL EXCISE & ANR. [2023 (8) TMI 352 - BOMBAY HIGH COURT] and PRADEEP SUBHASHCHANDRA MEHTA VERSUS THE UNION OF INDIA & ORS. [2024 (11) TMI 910 - BOMBAY HIGH COURT].
The impugned show cause notices set aside on the ground of non-justification for delay in adjudication in show cause notices for more than 18 years.
Petition disposed off.
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2024 (12) TMI 942
Waiver of the mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 for filing an appeal - direction to hear the petitioner's said appeal on merits without insisting on pre-deposit and to condone the delay - HELD THAT:- Undisputedly, the statute no longer confers any discretion on the first appellate authority or the CESTAT to waive the condition of pre-deposit. It is in the aforesaid backdrop that the writ petitioner has approached this Court to submit that the facts of the present case would reveal that this is one of those rare and deserving cases where the Court would be justified in invoking its jurisdiction conferred by Article 226 of the Constitution.
Tthe principal demand appears to have come to be created by virtue of certain incentive payments which were received by the petitioner in connection with the use of the Computer Reservation System and which enabled it to access the online computer booking network - undisputedly the legal position insofar as incentives are concerned and those earned by members of the IATA is no longer res integra and stands authoritatively settled in Kafila Hospitality [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)] - the petitioner appears to have a strong prima facie case and that the test of “likelihood of success” is liable to be answered in its favour.
Whether circumstances exist warranting this Court invoking its extraordinary jurisdiction under Article 226 of the Constitution and waiving the condition of pre-deposit as imposed by Section 35F of the Act? - HELD THAT:- On evaluating whether the condition of pre-deposit is liable to be waived, it is necessarily needed have to approach the issue bearing in mind the decision of the Larger Bench of the CESTAT insofar as incentive payments are concerned. Viewed in that light, there are no hesitation in coming to the conclusion that insofar as this part of the demand is concerned, it would clearly qualify the test of rare and exceptional cases.
Petition allowed, subject to the petitioner discharging its service tax liability with respect to the demands which stand created and quantified in the Order-in-Original, and more particularly as specified in paragraph 20 thereof, the other liabilities which may stand raised in light of the findings returned by the Adjudicating Authority and pertaining to incentive income shall stand waived for the purposes of quantifying the pre-deposit that is to be made.
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2024 (12) TMI 941
Entitlement to claim rebate of Swachh Bharat Cess and refund of CENVAT credit for the same period - rejection of petitioner’s revision application on the sole basis that the petitioner had also availed the refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 for the same period in respect of the input services.
HELD THAT:- The order impugned in the present petition has been passed by the revisionary authority located within the National Capital Territory of Delhi, therefore, the present petition is maintainable.
It is considered apposite to set aside the impugned order and restore the petitioner’s revision petition before the revisionary authority to consider it afresh after affording the petitioner an opportunity to be heard.
Petition disposed off.
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2024 (12) TMI 940
Refund claim of the amount deposited 'under protest' during the pendency of the adjudication proceedings and investigation - rejection on the ground of unjust enrichment in terms of section 11B of the Central Excise Act, 1994 - HELD THAT:- The issue whether the appellant is eligible to claim the refund and whether the same is hit by the bar of unjust enrichment in terms of section 11B is no longer res integra, having been decided in series of decisions.
Reference made to the latest decision passed by this Tribunal in M/S CHAMBAL FERTILIZERS AND CHEMICALS LIMITED VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJ.) [2023 (2) TMI 10 - CESTAT NEW DELHI] where the Bench had dealt with similar contentions as raised by the appellant herein referring to the earlier decisions of the Madras High Court in THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL [2015 (3) TMI 735 - MADRAS HIGH COURT] which was subsequently followed by the Allahabad High Court in THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL [2015 (3) TMI 735 - MADRAS HIGH COURT]. In all these decisions, the main principle laid down is that any amount deposited during the pendency of adjudication or investigation is in the nature of deposit and therefore, cannot be considered to be towards payment of duty and consequently the principles of unjust enrichment would not apply in the event of claiming refund of such deposit.
Deposit of the duty amount 'under protest' by the appellant during the period April 2016 to June 2017 - no show cause notice itself was issued by the department - HELD THAT:- The deposit made by the appellant cannot be characterised as 'duty' in terms of section 11B of the Act. The amount deposited by the appellant during this period was only by way of abundant caution as the very basis of initiating any proceedings is by issuing the show cause notice itself, however, the stage in the present case is when the show cause notice has not been issued. It is concluded that the amount deposited during the period April 2016 to June 2017 was a mere deposit which cannot be subjected to the bar of unjust enrichment and the appellant is entitled to claim the refund thereof.
The issue of refund of the amount deposited 'under protest' during adjudication/investigation has been consistently held to be a simple deposit which is not hit by the bar of unjust enrichment was affirmed by the Karnataka High Court in COMMISSIONER, BANGALORE VERSUS MOTOROLA INDIA PRIVATE LTD. [2007 (11) TMI 64 - HIGH COURT KARNATAKA] where the appeal filed by the revenue was dismissed and the view taken by the Tribunal was affirmed observing that there was no unjust enrichment. Subsequently, the Madras High Court in THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL [2015 (3) TMI 735 - MADRAS HIGH COURT] and the Allahabad High Court in EBIZ. COM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX AND ORS. [2016 (9) TMI 1405 - ALLAHABAD HIGH COURT] upheld the view. We may also refer to the decision of the High Court of Delhi in the case of TEAM HR SERVICES PRIVATE LTD. VERSUS UNION OF INDIA & ANR. [2020 (6) TMI 342 - DELHI HIGH COURT] where the Court observed that the undisputed position is that the deposit 'under protest' was made against the anticipated liability and which liability though fructified by the respondent was set aside by the CESTAT and which order attained finality.
The reliance placed by the learned Special Counsel on JCT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II [2003 (11) TMI 145 - CESTAT, NEW DELHI] is completely misplaced as the doctrine of unjust enrichment was considered in the general sense and the price of the goods was inclusive of duty, which meant that the assessee had already recovered the duty from the customers.
The impugned order passed by the Commissioner (Appeals) is unsustainable and is hereby set aside and the order of the adjudicating authority dated 04.09.2019 is restored with consequential relief - Appeal allowed.
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2024 (12) TMI 882
CENVAT Credit - input services - transportation by road service - technical testing and analysis service - denial on the ground that no supporting documents were submitted.
Disallowance of the input credit on the disputed services - no supporting documents were produced - HELD THAT:- On perusal of the documents filed by the appellants as part of the appeal papers in respect of business auxiliary service, C&F agent service, management consultancy service, consultancy/professional charges, storage/warehousing charges. The aforesaid services have been used in or in relation to the manufacture of final products inasmuch as these services are in the nature of bank guarantee commission paid to the bank for raising funds for working capital, services used for obtaining advance licenses for the final product, surveillance audit service, C&F agents service upto the place of removal i.e., Zirakpur and Guwahati depots, management of certain operations, services of environment clearance certification and training, ISO audit etc., godown/warehousing services at the depots. Further, it is also found that the learned Commissioner (Appeals) had not given any finding in rejection of the input credit on these above input services, except that he found that there is no supporting documents. In view of the above, and on the basis of supporting duty/service tax paying documents produced by the appellants, CENVAT credit in respect of the above input services are allowed.
Transportation service - HELD THAT:- The representative copy of the invoices evidencing the service tax paid thereon and the excise invoices issued by the appellants for stock transfer from their factory to their sales depots. In view of the above factual position, CENVAT credit on the above service of ‘transportation by road’ allowed being the eligible credit in respect of input service having been covered under the inclusive category of specific services viz., “outward transportation upto the place of removal”.
Technical testing and analysis service - HELD THAT:- The appellants have produced three invoices issued by the Mumbai Waste Management Ltd., for comprehensive analysis and technical testing of waste sample. As testing of waste arising in the course of manufacture is a legal requirement for any manufacturer for compliance with environmental laws and regulations of the State, it is found that such credit of service tax in respect of testing and analysis service is eligible as input service. Further, the certificate issued by the Mumbai Waste Management Ltd., for the appellants-manufacturer factory at Tarapur, being a registered member for safe and secure disposal of hazardous waste in terms of hazardous waste management rules and regulations of the State, in the nature of input service used is directly in relation to manufacture in compliance with statutory regulations dealing with hazardous waste management. Such certification is not in any way connected with the membership of a club, which, when used primarily for personal use or consumption of any employee alone, is excluded under the category of specified exclusions given under clause (C) of Rule 2(l) of the Rules of 2004. Hence, the input credit of service tax paid on technical testing and analysis, obtaining registered membership for safe disposal of hazardous waste by the factory of the appellants, is eligible as ‘input service’ in terms of Rule 2(l) of the Rules of 2004.
The impugned order is set aside to the extent it had disallowed the CENVAT Credit, imposed penalty on the appellants and the appeal filed by the appellants is allowed in their favour with consequential relief, if any, as per law.
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2024 (12) TMI 881
Classification of ‘Propylene/Propene-PP feed stock’ manufactured by the appellants - whether, the same merits classification under CETI 2902 9090 as claimed by the appellants; or, is it classifiable under CETI 2711 1400 as determined by the learned Commissioner in the impugned order? - invocation of extended period under Section 11A of the Central Excise Act, 1944 - imposition of penalty under Section 11AC ibid.
HELD THAT:- It could be seen that by applying the GIR 1, the position is made clear that Chapter Heading 27.11 covers within its scope and ambit, mainly of Petroleum gases and other gaseous hydrocarbons. However, separate chemically defined organic compounds, other than pure methane and propane, are not covered under chapter 27 and are to be classified under chapter 29. Further, separate chemically defined organic compounds, whether or not containing impurities remain classified under Chapter 29. Moreover, it is only pure methane and propane of chapter 27 which are excluded from the scope of coverage of chapter 29 and not propene (propylene). Thus, the distinguishing factor for classification of the impugned product i.e., propylene/propene is to determine whether these are separate chemically defined compounds and further its purity, as per standards such as BIS or other laid down norms by Indian Institute of Petroleum, which is one of the constituent laboratories under the umbrella of Council of Scientific & Industrial Research (CSIR), which has facilities for testing ASTM/IP/UOP/BIS standards for analyzing and evaluating of petroleum products.
The impugned order has not examined all the aforesaid aspects for arriving at a proper classification of the impugned goods. It is not the case of the Revenue, that Propene/propylene is a new product that was manufactured by the appellants and as such its classification as per self-assessment made by the appellants are mis-classified. It is a fact on record that right from the beginning of the petroleum refinery operations of the appellants’ at the Mahul refinery, Propene/propylene was being manufactured and were cleared for home consumption.
Heading 2711 covers under its scope liquified petroleum gases and other gaseous hydrocarbons as well as such products in gaseous state. Liquified propylene is specifically covered under sub-heading 2711.14 and in gaseous state is covered under 2711.29. However, if such propylene is in a pure state or commercially pure state, being separate chemically defined hydrocarbons, then the same is classifiable under heading 29.01. The records of the case also show that the customers of the appellants have placed orders for the product as ‘Poly Propylene Feed Stock’, ‘Propylene’ as these are known commercially in the trade for use in their further manufacture of chemicals. Therefore, as observed by us, the determining factor for classification of the propylene/ propene manufactured by the appellants would be determination of the ‘purity’ level and whether it is a ‘separate chemically defined compound’ or not. The test reports stated to have been examined by the learned Commissioner does not throw light on the above factual aspects for determining proper classification of the impugned goods. Therefore, the findings of the learned Commissioner is faulty and does not help in determining proper classification of the impugned goods.
Invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The classification of the impugned product was initially approved by the Department under the classification adopted by the appellants, and the issue of misclassification of the impugned product was raised during the audit scrutiny by the department authorities. The periodical returns filed by the appellants before the department authorities, clearly show that all information relating to the production and clearance of the impugned products, were in the knowledge of the Department, including the classification of the product, and there was no suppression of fact or mis- statement in the declaration filed by the appellants. Further, CBIEC’s instructions issued vide Circular No. 808/5/2005-CX dated 25.08.2005, clearly state that 8-digit classification code is a technical change adopted in the numbering scheme for Central Excise classification, and all possible assistance to trade industry may be provided by the Department for switching over to such new 8-digit tariff. Hence, the invocation of extended period for confirmation of demand on the ground of willful suppression or mis-statement is not legally sustainable.
The impugned order dated 30.06.2014 classifying imported goods under heading 2711 1400 does not stand the scrutiny of law and therefore it is not legally sustainable. In order to determine the proper classification of the impugned goods as per law, it is considered necessary that the matter should be remanded back to the original authority - the impugned order set aside - appeal allowed by way of remand.
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2024 (12) TMI 838
Marketability - different iron and steel items such as plates, angles, channels, beams etc. - turnkey project - it was held by High Court that 'it cannot be said, nor to be found from any material on record to indicate that all the goods that are being manufactured by the petitioners are goods which are said to be marketable' - HELD THAT:- There are no reason to interfere with the impugned order passed by the High Court - SLP dismissed.
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2024 (12) TMI 837
Maintainability of appeal - appropriate forum - rectification of mistake - Reversal of CENVAT Credit - reversal was in the form of debit in the Cenvat register, at the time of issuing the sales invoice - excise duty was paid on receipt from the buyer and not through Cenvat Credit - validity of equating the Cenvat Credit reversal with utilization - absence of prescribed method for reversal of Cenvat Credit - levy of equal penalty by the non-speaking and without reasons order - validity of recovering CENVAT Credit availed on inputs despite there being a reversal of the entire availed CENVAT Credit and no loss being suffered by the exchequer - time limitation.
Whether in the facts and circumstances of the case and in law, the demand of Rs. 5,63,66,047/- raised by the Commissioner of Central Excise, Thane-II vide the Show Cause Notice dated 5th September 2014 for the period August 2009 to September 2012 is barred by limitation? - HELD THAT:- For the question to be raised in an appeal to the High Court under Section 35G, the same should arise out of the Tribunal’s order against which an appeal is preferred to the High Court. Section 35G (1) provides that an appeal shall lie from every order passed in appeal by the Appellate Tribunal. Therefore, the issue dealing with notice being barred by limitation should arise from the Tribunal's order. On a perusal of the Tribunal's order, the issue of notice being barred by limitation does not appear to have been raised by the Appellant since there is no such recording by the Tribunal in the order. This issue, in the facts of the case, is a mixed issue of fact and law. Since the issue of a notice being barred by limitation has not been argued in the view of the absence of the same being recorded in the Tribunal’s order, the question would not arise from the Tribunal’s order.
In-ground (h) of the appeal memo before this Court it is stated that ground relating to limitation was raised in the appeal before the Tribunal. However, the Tribunal has failed to consider the same and, therefore, the Tribunal’s order suffers from infirmities. In our view, raising ground in the appeal and advancing arguments at the time of the hearing before the Tribunal are two different things - In the instant case, it is informed that the Appellant has not filed any such application before the Tribunal. Such a ground cannot be entertained because it is not aware as to whether the ground of limitation was argued before the Tribunal or not. The Tribunal’s record must be given credence. The appeal Court does not lightly entertain any attacks against the Court’s record. The proper mode is approaching the same court within a reasonable period, if not at the earliest. Even ground (h) only speaks that same was raised in the appeal, but it does not say that it was argued before the Tribunal. Admittedly, there is no discussion on the ground of limitation in the Tribunal’s order and, therefore, since the issue of limitation does not arise from the present Tribunal’s order dated 27 February 2024, same is to be rejected.
The Co-ordinate Bench of this Court in Commissioner of Income Tax vs. Tata Chemicals Ltd. [2002 (4) TMI 42 - BOMBAY HIGH COURT] while dealing with Section 260A of the Income Tax Act on appeals to the High Court holding that 'The careful reading of section will show that High Court can decide only that question which was raised but not determined by the Tribunal. Therefore it was necessary that the question sought to be raised ought to have been raised before the Tribunal and then if it had not determined it, one can say that it has not been determined by Tribunal and therefore the High Court should look into it. In the present case, we do not find that this issue had been raised before the Tribunal. It is also not the case of revenue that the issue or question was raised but not decided by the Tribunal. In the circumstances, we do not propose to dwell on this question.'
Cenvat Credit of Rs. 5,63,66,047/- that was wrongly availed and ordered to be recovered - HELD THAT:- The modus operandi concerning the issue above has been narrated in paragraph 3 of the present order, wherein it is observed that the Appellant used to clear the imported goods directly from the customs bonded warehouse and send them to its customers. Still, the records were maintained in such a manner that they reflect that the goods entered the Appellant's factory premises and left the factory premises for the customer's destination. Based on the excise invoices raised by the Appellant, the customers used to take Cenvat credit. There is no dispute that unless the goods enter the factory premises and leave the factory premises, Cenvat Credit cannot be taken.
In the show cause notice dated 5 September 2014, it is stated that the Appellant availed inadmissible Cenvat Credit and also wrongly passed the incidence of duty to various customers. The show cause notice records statements made by various customers of the Appellant in support of this modus operandi - On a specific question being asked to the customers as to how they had taken Cenvat Credit when the goods were not being transported from the factory premises, they have categorically stated that the Cenvat Credit was taken based on invoices issued by the Appellant. The Appellant has rebutted none of these statements of the customers. In the statements recorded of the representatives of the Appellant they have also admitted to the said modus operandi adopted by them which has not been rebutted.
The Tribunal, being final fact-finding authority, has given a finding of fact that the Appellant has availed inadmissible Cenvat Credit although the goods did not enter the factory. It further records that the inadmissible Cenvat Credit was availed, utilised, and not reversed - The Tribunal has observed that the customers to whom goods were sold have admitted that based on such documents prepared, they availed the Cenvat Credit, although the same could not have been availed.
Two authorities have examined the facts and have given a finding of fact that the same Cenvat Credit was wrongly availed and passed on to the customer, and this has not been rebutted. These findings of facts and, more particularly, by the final factfinding authority cannot be challenged by saying that there arises substantial questions of law. The original authority and the Tribunal have recorded that the Appellant has admitted the modus operandi referred to hereinabove and the same is corroborated by the customers' statements also. Such findings of facts would not raise any question of law much less substantial questions of law - Since admittedly, the modus operandi was proved to avail wrongly the Cenvat Credit and passed on to the customers and further there is no denial that the customers have availed the Cenvat Credit based on the documents prepared by the Appellant, which otherwise they have not been able to avail, these are questions of facts, and on such questions of facts, no substantial questions of law can be said to arise. Therefore, even after considering the chart, no interference with the factual findings is warranted.
The basis of confirming the penalty is in paragraph 5 wherein the modus operandi of the Appellant for availing and passing on Cenvat Credit to its customers which was exposed by the investigation team and confirmed by the adjudicating officer also got reconfirmation by the Tribunal. The fact that invocation of larger period of limitation on account of suppression, fraud etc. has become final since said ground not having been argued as per the Tribunal’s order which does not mention so, there does not seem to be any infirmity in Tribunal’s order on confirming penalty.
The appeal filed by the Appellant against the order of the Tribunal dated 27 February 2024 does not raise any substantial questions of law, and, therefore, the appeal is dismissed.
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2024 (12) TMI 836
Reversal of CENVAT credit lying in stock as on 01.04.2005 when the appellant opted for SSI exemption - cenvat credit on returned goods for reconditioning - Applicability of Notification No.8/2003 dated 01.03.2003 for exemption from duty - HELD THAT:- The relevant provisions of Rule 11 (2) of the Cenvat Credit Rules reads “who has been taking CENVAT credit on inputs or input services before such option is exercised, shall be required to pay an amount equivalent to the CENVAT credit, if any, allowed to him in respect of inputs lying in stock or in process or contained in final products lying in stock on the date when such option is exercised”, thus clearly stating that once the appellant opts for SSI exemption Notification, cenvat credit in respect of inputs lying in stock or in-process or contained in products lying in stock needs to be reversed.
As seen from Rule 16 of Central Excise Rules, 2001, the cenvat credit taken on the returned goods (finished goods) is equivalent to taking credit on the inputs as the returned goods are deemed to be inputs. Therefore, the Commissioner (Appeals) was right in demanding the cenvat credit lying in stock as on 01.04.2005.
The original authority had observed that the appellant had cleared 45 stabilizers valued at Rs.11,80,134/- were cleared by them on payment of duty of Rs.1,88,821/- and Education Cess of Rs.3,776/- after crossing the SSI exemption limit in the year 2005-2006, which is also claimed by the appellant in their grounds of appeal. These goods were lying in stock at the time of opting for exemption under the SSI Notification. Hence, this is of no relevance because, the credit lying in stock on the returned goods had to be reversed in terms of the SSI Notification read with Rule 11 of the Cenvat Credit Rules, 2004.
The impugned order confirming the demand of cenvat credit of Rs.3,47,656/- and Education Cess of Rs.6,953/- under Section 11A of the Central Excise Act, 1944 along with interest is upheld - Appeal dismissed.
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2024 (12) TMI 835
CENVAT Credit - reversal of input service credit on account of availment of input service credit attributable to trading activity - Invocation of Extended period fo limitation - denial of credit on procedural grounds such as the head office has not taken the ISD registration and the invoices pertaining to the input services were not in the name of the appellant-company - Enhancement of penalty.
Reversal of input service credit amounting to Rs. 1,17,41,737/-on account of availment of input service credit attributable to trading activity - HELD THAT:- It is observed that 'trading' has been brought under the category of 'exempted service' only with effect from 01.04.2011. Thus, prior to this period there is no need to reverse proportional credit attributed to the exempted service, 'trading'. The demand in this case has been raised for the period 2007-08 to 2010-11. As 'trading' was not an exempted service during the period under dispute, the reversal of input service credit proportional the value of exempted service is not warranted. Thus, the demand confirmed in the impugned order, along with interest and penalty imposed, set aside.
Invocation of Extended period of limitation - HELD THAT:- It is observed that all the notices were issued by invoking extended period of limitation. These notices were issued in piecemeal based on various audit objections. Once a Show Cause Notice is issued proposing denial of CENVAT Credit by invoking extended period of limitation, then another notice cannot be issued on the same issue by invoking extended period again, as held by the Hon'ble Apex court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT] wherein it has been categorically held that once a demand has been raised for any issue by invoking the extended period of limitation, then another demand cannot be raised again by invoking the extended period on the same issue for a subsequent period - the demands confirmed in the subsequent notices, invoking extended period of limitation is not sustainable.
Denial of CENVAT credit on procedural grounds such as the head office has not taken the ISD registration and the invoices pertaining to the input services were not in the name of the appellant-company - HELD THAT:- It is observed that when the receipt and utilization of the service are not in dispute, the credit available to the appellant cannot be denied on mere procedural infirmities. Accordingly, the above credit availed by the appellant cannot be denied. Thus, the appellant is eligible for the credit of input services availed them in the impugned orders. Since the credit is held to be eligible, the question of demanding interest and imposing penalties does not arise.
Enhancement of penalty - HELD THAT:- Since, it has been already been held by us that the credit availed by the appellant is in order, there is no need to impose penalty for the alleged irregular credit availed. Accordingly, the penalty enhanced by the Ld. Commissioner (Appeals) in the impugned order set aside - it is observed that a penalty of Rs.2000/- was originally imposed by the adjudicating authority on the ground of irregular availment of credit. Since, the credit availed is held to be eligible to the appellant, the penalty of Rs.2000/- imposed by the original adjudication authority is not sustainable.
The impugned order set aside - appeal allowed.
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2024 (12) TMI 793
Refund of deposit made under protest for Service Tax Liability on Interchange Fees - HELD THAT:- In the instant case, the show cause notice is pending adjudication. The decision in the case of HSBC [2023 (11) TMI 965 - BOMBAY HIGH COURT] was rendered on these facts and the facts being distinguishable from the facts of the petitioner; in our view, the same cannot be relied upon for seeking the prayer of mandamus directing the respondents to refund the amount in the present petition. In our view, if we grant such a prayer, the adjudication of the show cause notice would become infructuous moreso the petitioners themselves have prayed for adjudication of the show cause notice. Even on this count, such prayer of granting a refund by way of writ of mandamus cannot be accepted.
Even otherwise, except in some exceptional circumstances, where a clear case is made out or where the law and facts admit of no other course and authority is acting stubborn, a mandamus to act in a particular way or to exercise powers in a specific manner is not typically issued. Here, there was failure to expeditiously discharge the duty of disposing of the refund applications. Therefore, a mandamus must be issued to direct the expeditious disposal of the refund applications. But, in this case, a mandamus cannot be issued to directly refund the amount claimed, thereby denying the authorities an opportunity to examine the petitioner’s refund claim following the law and on its merits.
The respondents are directed to adjudicate the show cause notice dated 11 May 2015 along with the Corrigendum dated 3 June 2015 within eight weeks from the date of uploading of the present order - petition disposed off.
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2024 (12) TMI 792
Rejection of refund claim under exemption notification No.12/2012-C.E. due to non-fulfillment of conditions - Rejection of refund claim under exemption notification No.108/95-C.E. due to procedural lapses - unjust enrichment.
Rejection of refund claim under exemption notification No.12/2012-C.E. due to non-fulfillment of conditions - case of appellant is that the said proviso to Sl.No.41 was brought in only by an amendment by Notification No.12/2015-CE dated 01.03.2015, and was therefore not applicable for the relevant period - Unjust enrichment - HELD THAT:- The period involved in this refund claim is March 2013 whereas the condition inserted in the proviso was by notification No. 12/2015-C.E., dated 1-3-2015, and thus would not govern the aforementioned period. During March 2013, the requirement of condition 41 was for the goods to be exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the said Customs Tariff Act when imported into India. Thus, by the very existence of a customs exemption notification simpliciter, namely, by virtue of the exemption provided at Sl.No.507 of the notification No.12/2012-Cus dated 17-03-2012, the said condition 41 as it existed for the relevant period, stood satisfied, so as to entitle the appellant to the benefit of Sl.No.336 of the notification No.12/2012-CE dated 17-03-2012 - the learned Appellate Authority erred in placing reliance on the proviso that came to be inserted subsequently by notification No. 12/2015-C.E., dated 1-3-2015, for denying the appellant the benefit of the said Sl.No.336 of the aforementioned Notification No.12/2012-CE ibid.
It is pertinent that the clearances of the goods originally were without payment of duty claiming the benefit of the exemption notification and duty was paid as per the directions of the jurisdictional superintendent. When the customer is aware of its entitlement to exemption it stands to reason that they will not entertain a request by the appellant to recoup the duty that was paid on the jurisdictional officer’s directions. In such circumstances, there is no reason to disbelieve the CA certificate enclosed to the appeal paperbook to show that the duty paid has not been passed on and it merits acceptance as sufficient proof that the refund due to the appellant is not hit by the bar of unjust enrichment.
Rejection of refund claim under exemption notification No.108/95-C.E. due to procedural lapses and unjust enrichment - non-production of the necessary certificate at the time of clearance of goods - non-discharge of burden of proof cast on them to overcome the bar of unjust enrichment - HELD THAT:- The excise duty certificate indicates that the appellant is a sub vendor of M/s. Shyam Indus Power Solution Pvt ltd. The excise duty certificate further certifies that the said equipment and material are intended for use by MPMKVVCL and that it is to be financed by Asian Development Bank through loan No.2732-IND duly approved by the Government of India. The certificate also states that it is issued in pursuance of the requirement under Notification No.108/95-CE dated 28-08-1995 as amended and that excise duty exemption may be allowed against the above supplies by the main contractor sub-contractor as listed in Annexure I - The fact that the appellant had not produced the said certificate at the time of clearance of goods has weighed with the learned appellate authority and he has expressed his disagreement with the appellant’s contention that it is a procedural lapse while rejecting the claim.
Since the exemption is to the goods supplied, the aforementioned certificate countersigned and issued in the manner stated would be the mandatory requirement that fulfills the eligibility clause and requires a strict compliance. Once such a certificate has been issued and is in existence, the production of the same before the jurisdictional officer is only of a directory nature, and which being a procedural requirement to ensure the genuine nature of the transaction and that the goods are indeed intended for use as claimed, can be fulfilled even post facto. Indisputably the certificate dated 10.01.2013 so produced was contemporaneously in existence at the time of clearance of the goods, the said clearances being made in February 2013 and June 2013. The grievance is only on its subsequent production - the belated production of the certificate is a procedural lapse that is condonable and insufficient to deny the substantial benefit of the notification given these facts that the goods have been consigned clearly indicating the consignee address as MPMKVVCL in the invoices, there is no allegation that the goods have not been received or not put to their intended use, and the said excise duty exemption certificate, complete in all respects, was issued and in existence - the benefit of the said exemption notification is required to be extended to the appellant.
Unjust enrichment - HELD THAT:- The customer who is aware of its entitlement to exemption and has provided the exemption certificate has categorically asserted that excise duty will not be paid to the appellant given that the exemption is mentioned in their purchase order citing the relevant exemption Notification No.108/95 dated 28.08.1995. In such circumstances, there is no reason to disbelieve the CA certificate enclosed to the appeal paperbook to show that the duty paid has not been passed on and it merits acceptance as sufficient proof that the refund due to the appellant is not hit by the bar of unjust enrichment.
The impugned order is set aside - appeal allowed.
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2024 (12) TMI 791
CENVAT Credit on capital goods - Availment of 100% CENVAT Credit on cylinders considering the same as input instead of 50% of the credit, being maximum permissible availment for capital goods in a year - HELD THAT:- Though cylinder was accepted as capital goods, it was considered as part of the printing machine and therefore, taking of full CENVAT Credit at 100% by the Appellant can’t be considered as irregular, apart from the fact that such credit was never ever utilised by the Appellant to its fullest extent and proportionate interest was also paid for the expressly debarred period.
The order passed by the Commissioner of Central Excise, Mumbai-III is hereby set aside - Appeal allowed.
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2024 (12) TMI 790
Levy of penalty under Rule 26 of the Central Excise Rules, 2002 (“CER”) read with Rule 15(1) of the CENVAT Credit Rules, 2004 - Cenvat credit of the service tax was inadvertently claimed by the company which related to its spinning unit on 31.03.2008,which was subsequently voluntarily reversed without utilization and well before issuance of the show cause notice - HELD THAT:- On scrutiny of the facts related to the wrong availment of the credit by the company it is observed that the company M/s. Alok Industries Limited has inadvertently availed the Cenvat credit which is meant for their own other unit. In this case there cannot be any malafide intention for availament of such credit because the same was available to the same company though in different unit, therefore, there is no gain or loss to the company M/s. Alok Industries Ltd. The company on pointing out an error by the audit party reversed the entire credit voluntarily, therefore, in this fact when the company itself cannot be alleged any malafide intention its employee remotely cannot be implicated for penal action.
Considering the overall facts of the present case and nature of alleged offence the personal penalty under Rule 26 cannot be imposed, therefore, the penalty is set aside - Appeal is allowed.
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2024 (12) TMI 789
Recovery of Central Excise Duty with interest and penalty - non-inclusion of value of free supply material from prime manufacturer, while clearing the job worked goods on payment of duty - violation of provisions of Rule 6 and Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - invocation of extended period of limitation - suppression of facts or not.
Applicability of Rule 4(5)(a) of the CENVAT Credit Rules and Rule 10A of the Central Excise Valuation Rules - HELD THAT:- Rule 10 A was inserted vide Notification No 9/2007-CE (NT) dated 01.03.2007 with effect from 01.04.2007 in Central Excise Valuation (Determination of Price Excisable Goods) Rules, 2007, to provide definiteness to the manner of valuation of the goods manufactured and cleared by the job worker. The entire scheme of valuation of the goods manufactured on “job work” was introduced. The said rule was not under consideration of the Hon’ble Supreme Court in the case of International Auto [2005 (3) TMI 132 - SUPREME COURT]. As per sub-clause (iii) the valuation of the goods manufactured on job work basis which were not sold as such by the prime manufacturer from the premise of job worker or his premises, i.e. (i) and (ii) of the said rules than the value of said goods for valuation of the said goods will be by application of the valuation rules mutatis mutandis.
From Rule 4 (5) (a) of the CENVAT Credit Rules, 2004, it is evident that the said rule is enabling rule and procedure for clearance of the goods by the person who avails the CENVAT Credit for processing of the said goods and procedure for maintenance of records and the return of said goods.
Inclusion of the value of free-supplied materials in the assessable value for excise duty - benefit of N/N. 214/86-CE - HELD THAT:- The assessable value of the goods for the purpose of payment of duty is to be determined as per section 4 of the Central Excise Act, 1944 read along with the Central Excise (Determination of Price of Excisable Goods) Valuation Rules, 2000. Rule 6 of the valuation rules has been reproduced in the impugned order which clearly provide for addition of any additional consideration received by the appellant in any form to the transaction value for arriving at the assessable value. In terms of the decision of the Hon’ble Supreme Court in case of Ujjagar Prints & Pawan Biscuits [1988 (11) TMI 106 - SUPREME COURT] and similar other decisions the value of raw material supplied for job work should have been added to arrive at the assessable value. The determination of assessable value made under the Section matter, is not subjected to admissibility of CENVAT credit to the appellant in respect of free supply material - in absence of any specific compliance with the conditions and procedure laid down as per the Notification 214/86-CE, the benefit of same cannot be allowed as claimed by the appellant.
Appellant in the present case have determined the value of job worked material by excluding the value of the material supplied to them for job work by the prime manufacturer. The have determined the value on the basis of the value of the material procured by them on their own account and the job charges. The manner in which the value has been determined goes contrary to the decision of Hon’ble Apex Court in case of Ujaggar Prints and other similar decisions read with the provision of rule 6 & Rule 10A of Central Excise valuation (Determination of Price of Excisable Goods) Rules, 2000.
Extended period of limitation - suppression of facts or not - HELD THAT:- Appellant have suppressed the value of the goods cleared in as much as they did not assess the value by not including value of materials, components, parts and similar items that were being received from the principal manufacturer and used in the manufacture of goods on job work basis for discharging the duty liability. They have also not disclosed these facts to the department. Thus the party suppressed the material facts from the department with intent to evade payment of Central Excise Duty. Hence, the extended time limit is invokable under the provisions of Section 11A (4) of the Central Excise Act, 1944.
The demand of central excise duty demand for interest upheld and the penalties imposed under section 11AC of the Central Excise are justified in view of the decision of Hon’ble Supreme Court in case of Rajasthan Spinning and Weaving Mill [2009 (5) TMI 15 - SUPREME COURT].
There are no merits in the appeal - appeal dismissed.
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