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Central Excise - Case Laws
Showing 341 to 360 of 81317 Records
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2024 (9) TMI 306
Valuation of Excise Duty - inclusion of freight charges in the assessable value - demand raised invoking Rule 7 of Central Excise Valuation Rules, 2000 - HELD THAT:- The facts bring out that the transportation is arranged by the customer and the freight charges are also paid by the customer to the consignment agent - The very same issue was decided by the Tribunal in the appellant’s own case for a different period in [2017 (1) TMI 1407 - CESTAT, CHENNAI], the Tribunal has set aside the demand. Following the said decision, the Tribunal subsequently in the appellant’s own case [2017 (7) TMI 557 - CESTAT CHENNAI] had set aside the demand for the period December 2007 to December 2013 for other units of the appellant.
Thus, there are no grounds to take a different view. Following the decision in the appellant’s own case, it is found that the demand cannot sustain. The impugned orders are set aside - appeal allowed.
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2024 (9) TMI 305
Refund claim - Time Limitation - interpretation of Clause (ec) of explanation of Section 11B of CEA - Cenvat Credit on insurance premium.
HELD THAT:- A plain reading would indicate that while there will be no limitation if duty has paid under protest as long as the matter is pending before any Appellate Fora, Court etc., but once they decide the matter and the refund becomes eligible to the appellant as a consequence of said judgment then the date of that judgment itself becomes the starting point for deciding the limitation of one year under Section 11B. In this case, the order of the Commissioner (Appeals) of 31.03.2010 itself was the relevant date when the decision went in favour of the appellant and no further appeal was filed by the appellant and they could have taken the credit in their books of account as there was no provision for cash refund under existing law. Apparently, the appellants did not file for any refund or re-credit before the proper authority after the passing of the order by the Commissioner (Appeals).
While the general provision of non applicability of limitation would not be applicable in such cases where payment has been made under protest but after insertion of Clause (ec), irrespective of whether payment of duty was under protest or otherwise, the refund claim arising out of such orders passed by Appellate Authority has to be made within one year of such order.
Even reliance under Section 142(3) of CGST Act, 2017 is not correct as such cases where the refunds were otherwise permissible under existing law can only be covered under said provision. In this case, it was clearly a time barred case within existing law prior to appointed date itself.
The Commissioner (Appeals) order rejecting the appeal filed by the appellants on the reasons and the cited legal provisions, does not suffer from any infirmity in the facts of the case and is sustainable. There is a clear default of limitation in filing of refund application by appellant and hence not eligible to get the said refund under Section 11B of Central Excise Act.
Appeal dismissed.
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2024 (9) TMI 238
CENVAT Credit - brand promotion services - invoices addressed to head office/corp. office - inputs contained in semi-finished goods - inputs contained in final product lying in stock - returned goods - Interest and penalty under Rule 14 and Rule 15 of the CCR respectively.
Where there is a difference of opinion between the Appellant-Assessee and the adjudicating authority, is with regard to consumption of inputs involving CENVAT credit amount of Rs.6,25,651/-? - HELD THAT:- The allegation of the Department in the report and in the impugned order is merely on the basis of an apprehension or a suspicion that the Assessee could not have consumed so much inputs in a single day. This allegation has been made without any corroborative evidence on the part of the department. It is a settled law that suspicion however strong, cannot take the place of evidence - the Department has not submitted any evidence to the contrary. Accordingly, there is no substance in the allegation of the Department that all those inputs are consumed in a single day. This is evident from the stock register maintained in RG-23A Part-I which forms part of RUD-3 to the Show Cause Notice dated 27.02.2014. Accordingly, we hold that the CENVAT Credit of Rs.6,25,651/-availed by the Appellant-Assessee cannot be denied on this ground. Thus, we set aside the demand confirmed in the impugned order on this count.
Difference of opinion in the report dated 06.08.2024 is with respect to returned goods involving CENVAT Credit of Rs.5,14,168/- - HELD THAT:- The Appellant-Assessee entered such returned goods in their finished goods stock records. However, for the purpose of control, they have also recorded the factum of receipt back of cleared goods in a separate register. Merely relying on such recording of these goods in separate register, the Department assumed that the inventory of these products was separately maintained without physically verifying the same or even checking the accounting of finished goods stock. A bare look at the goods return register would have revealed that these goods were received back during the period November 2011 to June 2012. There would be no rationale to keep these goods in stock separately up to 28.02.2013. Thus, the demand of reversal of CENVAT credit of Rs.5,14,168/-is not warranted - the demand confirmed in the impugned order on this count.
CENVAT Credit on brand promotion services - HELD THAT:- CENVAT credit of Rs. 89,61,000/- on brand promotion services provided by 2 IPL franchises was availed by the Appellant-Assessee on 25.02.2013, i.e., before 01.03.2013, when the final product manufactured by the Appellant-Assessee was dutiable - Rule 6 of the CCR cannot be invoked in this case to deny CENVAT Credit on input service which was rightly taken when the final product was chargeable to duty. It is to be noted that Rule 6 is applicable only in cases where the assessee is manufacturing both dutiable as well as exempted products. It is not applicable where the input/ input service is used in the manufacture of final product, which is exempted subsequently.
Rule 11(3) which was inserted on 01.03.2007 under the CENVAT Credit Rules, mandated the manufacturer to pay an amount equivalent to the CENVAT credit taken in respect of inputs received for use in the manufacture of the final product, which is lying in stock or contained in the final products, if the final products become exempted subsequently. We observe that Rule 11(3) is only restricted to inputs and there is no provision which requires paying of an amount in respect of input services - CENVAT credit availed on input services before the final product became exempt cannot be denied to the Appellant.
Regarding the appeal filed by the Revenue against allowing CENVAT credit to the tune of Rs.26,70,004/-, it is observed that there is no dispute regarding receipt and utilization of the inputs or input services by the Appellant-Assessee in the factory. The objections raised by the Department in the Notice are procedural in nature. It is the settled position of law that substantive benefit of CENVAT Credit cannot be denied for mere procedural lapse of mentioning incorrect/not proper address in the invoice issued by the service provider - as per proviso to Rule 9(2) of the CCR, address of service recipient is not a mandatory requirement; hence CENVAT credit cannot be denied on this ground - the ld. adjudicating authority has rightly allowed the credit of Rs.26,70.004/- For the same reason, the confirmation of demand of Rs.14,962/- in the impugned order is not sustainable. Hence, the Revenue’s appeal on this issue is dismissed.
Time Limitation - HELD THAT:- The fact of availment of CENVAT credit was duly reflected in the periodical returns (ER-1) filed by the Appellant-Assessee. Thus, there is no evidence of suppression of fact with intention to evade the payment of tax established in this case. In absence of any such evidence of suppression of fact, thus raising of demand by invoking of extended period of limitation is not sustainable - This view has been held in the case ofPr. Commissioner vs. Himadri Speciality Chemical Ltd. [2022 (9) TMI 1213 - CALCUTTA HIGH COURT] wherein it has been held that if availment of credit shown in ER-1 return filed with Department, then five years extended period of demand cannot be invoked - the entire demand confirmed vide impugned order dated 20.08.2015 is legally unsustainable on the grounds of limitation.
Demand of interest on the payment/reversal of CENVAT Credit - HELD THAT:- Rule 14 of the CCR has been invoked to levy interest on the amount to be recovered under Rule 11(3)(ii) of the CCR. As per Rule 14(2), if CENVAT credit is taken and wrongly utilized, only then can interest be levied. An amount determined under Rule 11(3)(ii) of the CCR cannot be termed as CENVAT credit taken and wrongly utilized. Hence, Rule 14 cannot be invoked in this case to levy interest while recovering an amount under Rule 11(3) of the CCR.
Penalty imposed on the Appellant-Assessee - HELD THAT:- Penalty under Rule 15 can be imposed only when CENVAT credit taken is wrongly utilized in contravention of any provision of the Central Excise Act or Rules made thereunder - while recovering an amount under Rule 11(3)(ii), no penalty can be imposed under Rule 15 of the CCR.
The appeals filed by the Appellant-Assessee are disposed off.
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2024 (9) TMI 178
Cenvat credit of service tax paid on outbound transit insurance - Cenvat credit of service tax paid on transportation for pickup and drop facility for employees - Cenvat credit of service tax paid on hospitality and management services.
Cenvat credit of service tax paid on outbound transit insurance - HELD THAT:- On going through the ruling by Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BELGAUM VERSUS M/S. VASAVADATTA CEMENTS LTD. [2018 (3) TMI 993 - SUPREME COURT], it is found that cenvat credit of service tax paid on insurance premium associated with outward transportation of final product from factory gate to depot for the period upto 01.03.2008 is admissible. Thus, out of the cenvat credit of Rs.31,60,453/-, appellant is entitled to avail cenvat credit which was service tax paid on such insurance premium upto 01.03.2008.
Cenvat credit of service tax paid on transportation for pickup and drop facility for employees - HELD THAT:- It is observed that Hon’ble Karnataka High Court has in both the cases, relied upon by learned counsel for the appellant, such as COMMISSIONER OF CENTRAL EXCISE, BANGALORE-III, COMMISSIONERATE VERSUS STANZEN TOYOTETSU INDIA (P.) LTD. [2011 (4) TMI 201 - KARNATAKA HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I VERSUS BELL CERAMICS LTD. [2011 (9) TMI 792 - KARNATAKA HIGH COURT], ruled that such services are input services and by following the ruling by Hon’ble Karnataka High Court, appellant was entitled for availment of cenvat credit of Rs.10,63,186/- during the period of dispute on service tax paid on bus transportation utilized for pickup and drop of employees.
Cenvat credit of service tax paid on hospitality and management services - HELD THAT:- The contention of Revenue is accepted that since the appellant is in the jurisdiction of Hon’ble Bombay High Court, the ruling by Hon’ble Bombay High Court in the case of CCE VERSUS MANIKGARH CEMENT [2010 (10) TMI 10 - BOMBAY HIGH COURT] will prevail and it is found that as per the said ruling, appellant is not entitled to avail cenvat credit of Rs.20,73,220/-.
Appeal allowed in part.
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2024 (9) TMI 177
Clandestine removal - shortage of stock - suppression of material facts - demand raised on the strength of private records - absence of corroborative evidence - time limitation - HELD THAT:- There is no allegation that any private records were recovered towards the receipt of the clandestine proceeds by way of cash. Apart from this, the clandestine clearance would entail not only dispatch, but purchase of raw materials, excess consumption of electricity [which is not accounted for in the normal course], inward movement of raw materials and consumables and finally outward movement of the clandestinely removed goods. No details in these areas have been gathered by the Revenue. The bare minimum requirement would be to verify the outward movement details by questioning the truck owners/transporters, when the vehicle numbers are purportedly been shown in the recovered diary/note sheets. Thus, the Revenue with the sole evidence coming in the form of the recorded Statements of the Director Mr Daga on three occasions - the Revenue has not discharged its onus to prove the clandestine manufacture and dispatch of the goods in question with proper corroborative evidence.
Shortages found during the stock verification - HELD THAT:- The verification report is not corroborated by way of supporting documents like weighing slip, quantification method adopted etc. As the appellant has submitted, in some case, the stock taking process could not have been completed in the short time said to have been taken to arrive at the actual quantity of stocks. The appellant’s arguments that the stock taking should have been taken in the presence of the Panchas cannot be subscribed. It would be sufficient if the same taken in the presence of the officials of the appellant, which has been done in this case. However, the details of the method adopted to quantify the stocks is not to be seen from the Revenue’s investigation - The ratio laid down in the above decisions is squarely applicable to the facts of the present case. Accordingly, the confirmed demands towards the shortage found during the stock taking is legally not sustainable.
Time Limitation - HELD THAT:- The Revenue had no case to invoke the extended period to confirm the demand, when the issue has come to their knowledge in July 2008. Therefore, the impugned order set aside even on account of limitation.
All the appeals are allowed both on merits and on account of limitation.
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2024 (9) TMI 176
Seeking to deny and recover Cenvat Credit - entire proceedings have been taken up without any proper verification and investigation and hence the demand itself is on assumptions and presumptions basis - suppression of facts or not - Extended period of Limitation.
The first submission of the appellant is that while the demand is in account of 245 transactions, the investigation was taken up for only 67 transactions - HELD THAT:- The allegation can sustain only on such invoices on which the investigation has taken place and non-receipt if conclusively proved. The investigation in respect of 67 invoices [about 27% of the total 245], even wherein the appellant has pointed several anomalies, cannot be generalized to simply interpolate same allegation for the balance 178 [about 73%] in order to make the demand. This is serious a flaw in the investigation process. Without doubt this action of the Revenue clearly vitiates the proceedings in respect of these 178 Invoices. Hence, there are no legal provision for confirmation of the demand of Rs.1,00,55,148 - appeal allowed.
Demand confirmed in respect of 32 Invoices, wherein statements have been recorded from the owners of the Vehicles - HELD THAT:- When the statement itself is recorded after about 1 to 5 years of the transaction, how far their statement can be relied on is doubtful. It is also on record that the appellant has sought cross-examination of many of the persons, which has not been granted by the Adjudicating authority for which he has come out with some justification. But Section 9D requires the recorded statement before the investigation officer to be once again reiterated before the Adjudicating authority for having been given without any coercion or force, before the same can be admitted as evidence. This has not bee done in this case. Normally in such cases, the matter remanded to the Adjudicating authority to produce these persons for Cross-examination - in the present case, the Statement itself was recorded much later in July to September 2013. Now asking the adjudicating authority to follow this procedure after another 11 years, will not serve any purpose, since the persons giving the statement are not from any Corporate or big companies. They were all vehicle owners and the ownership would changed several hands by now - the confirmed demand of Rs.18,69,286 set aside - appeal allowed.
Demand confirmed on account of the information obtained from the Vahan Dept. - HELD THAT:- The Dept. cannot come to a conclusion that the vehicle in question could not have been used for delivery of the goods. Again in respect of the vehicles which are recorded as ‘banned vehicles’, the possibility of such vehicles still being used for delivery cannot be ruled out. This leaves out a few more cases where the vehicle numbers pertain to non-transport goods. There may be a possibility that such numbers are used by vehicle owners in order to avoid payment of Road and other taxes. But no definite conclusions can be arrived at.
Extended period of limitation - HELD THAT:- The appellant is an assessee with the Dept. They have been taking the Cenvat Credit and also filing their Returns. It is not the case of the Dept. that any private records have been recovered towards the cash transactions. The Dept. has not brought in any evidence to the effect that any suppression has taken place from the appellant’s side. Hence, the confirmed demand for the extended period is legally sustainable on account of time bar.
Appeal allowed.
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2024 (9) TMI 175
Entitlement for benefit of N/N. 12/2012 CE dated 17.03.2012 - Revenue classified goods under 21069099 saying that food preparation of cleared are not sealed containers - HELD THAT:- Whereas, the classification by Revenue is contrary to the facts of the case that appellant is selling the goods in packed condition which means that the appellant is selling the goods in sealed container. Therefore, the serial no. 38 of the notification is not applicable to the facts of the case and the appropriate classification of the good by the appellant is 210690 which is enumerated at Sl. no. 37 of the notification and same is having nil duty.
Therefore, as contents of the notification are very clear and applicable to the facts of the case, in that circumstances, it is held that the classification of the goods in question is TSH 210690 and appellant is entitled to benefit at notification no. 12/2012 CE dated 17.3.2012 at serial no. 37 thereof.
The demand of duty on the issue of classification is not sustainable against the appellant - As demand already been set aside no penalty is imposable on the appellant - appeal allowed.
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2024 (9) TMI 174
Time Limitation - periodical refunds of duty paid under Section 4A have been sanctioned in terms of Notification No. 32/99-CE dated 08.07.1999, which were never challenged and had attained finality - HELD THAT:- It is found that, as held in the decision of COMMISSIONER OF CENTRAL EXCISE, VERSUS M/S. JELLALPORE TEA ESTATE [2011 (3) TMI 11 - GAUHATI HIGH COURT], the Revenue could not have raised the demands under Section 11A of the Central Excise Act, 1944, without challenging the refund sanctioning orders.
As it has been clarified that appellants are required to pay duty on MRP basis and they are entitled to avail abatement vide Notification No. 14/2008-CE(NT) dated 01.03.2008, in that circumstances, the extended period of limitation is not invokable as the date and method of payment of duty was known to the Department and appellants have paid duty as per the clarification given by the Department.
There are substance in the ld. counsel's arguments that, in such a scenario it was not open to the revenue to take recourse to the extended period of limitation. It is also found that prior to the DGCEI's investigations in the month of October 2010, the Anti Evasion Unit had also visited the appellant's premises, issued spot summons and seized documents.
The appellant no.2 also had undergone audit prior to the impugned proceedings and the issue of assessment under Section 4A had not been raised by the Audit. Accordingly, the appellants succeed on limitation.
As there is no demand sustainable against the appellants on limitation, therefore, no penalty can be imposed on the appellants.
The impugned order set aside - appeal allowed.
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2024 (9) TMI 114
Time Limitation - appellant are manufacturer of goods or not - Department has arrived at the conclusion that the appellant is the manufacturer because they have claimed to be so while accepting the bid and tender supplied by the Electricity Boards - HELD THAT:- From the records, there is no other evidence culled out by the department to suggest that the appellant were in effect manufacturers of such electrical items and the same was produced by them in the factory. Admittedly, the Electricity Boards were treating the appellant as manufacturers based on the terms of the contract and tender. It is evident from records that manufacture of the goods had taken place at premises other than that of the appellant, largely at the job workers premises. Under the circumstances when manufacture takes place at a premises of a job worker, then he stepps into the shoes of the manufacturer in terms of section 2 (f) of the Central Excise Act, 1944.
The very issue had come up for consideration in the case of Comet Technocom Pvt.Ltd. & Ors. v. CCE & ST, Kolkata-II [2018 (12) TMI 1771 - CESTAT KOLKATA], wherein the Bench held 'it would be evident that in the present case, the job workers of the assessee company were independent contractors/manufacturers and hence, the assessee company and/or its directors cannot be saddled with any liability of payment of excise duty and/or consequential penalty with respect to the goods so manufactured by the said job workers.'
It is therefore evident from the factual position in the present matter that the appellant noticee cannot be taken to be manufacturers, merely for so stating to their suppliers, without in effect being able to establish any manufacturing activity at their end. Certainly no claim for duty can thus be fastened onto them.
The order of the lower authority is set aside and the appeal filed is allowed both on merits and on limitation.
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2024 (9) TMI 113
Reversal of CENVAT Credit - capital goods - removal of goods as such - removal of Plant & Machinery without reversal of corresponding credit - Rule 3(5) of the CCR, 2004 - HELD THAT:- The facts of the present case are squarely covered by the judgement of the Hon’ble High Court of Delhi in the case of HARSH INTERNATIONAL (KHAINI) PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2012 (6) TMI 340 - DELHI HIGH COURT] where it was held that 'In the present case the appellant purchased the capital goods in the period between 2003 and 2005 and used them in its factory till they were sold to M/s. Harsh International (Khaini) Pvt. Ltd. in June and July, 2007. Thus the capital goods were used for a period of 2 to 4 years. They cannot therefore be stated to be sold “as such” capital goods.' - the Hon’ble High Court held that the capital goods cannot be stated to be sold “as such”. They were sold as used capital goods.
Further Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS AUTO IGNITION LTD. [2008 (4) TMI 43 - SUPREME COURT] held that the onus to prove that the Assessee had availed the Modvat credit was on the Revenue.
During the period in dispute, Rule 3(5) of CCR, 2004 does not provide any mechanism for recovering the Cenvat credit in case the manufacturer has failed to pay an amount equal to the Cenvat credit as required by the Rules. Where the Rules do not provide for recovery mechanism during the impugned period, demand of the same under any other provision is not sustainable and is accordingly set aside.
The impugned order is set aside and the appeal filed by the Appellant is allowed.
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2024 (9) TMI 112
Claim for statutory interest on refund granted in terms of Section 35FF of the Central Excise Act, 1944 - HELD THAT:- A bare perusal of Section 35FF mandates that when the Appellant is refunded the amount of pre-deposit earlier paid in terms of Section 35F consequent upon the order from the Appellate Authority, interest shall also be paid to the Appellant from the date of payment of pre-deposit amount till the refund of such amount. Thus, the payment of interest along with refund under Section 35FF of the Excise Act, is not dependent on whether the same has been claimed by the Assessee or not. The same is axiomatic.
In the present case, once the Ld. Adjudicating Authority committed a legal error in not granting interest on refund of pre-deposit while passing the Order-in-Original and appeal against the Order-in-Original is filed, then the Ld. Appellate Authority is bound to correct the error.
The finding given by the Ld. Commissioner (Appeals) in the impugned order that question of interest does not arise at this stage, is not legally sustainable. In the case of M/S CADILA PHARMACEUTICALS LTD VERSUS COMMISSIONER OF SERVICE TAX-SERVICE TAX - AHMEDABAD [2018 (1) TMI 424 - CESTAT AHMEDABAD], the Tribunal categorically held that Section 35FF itself provides for payment of interest on refund of pre-deposit amount and the same does not differentiate between the payment of pre-deposit made in cash or by debit in the Cenvat credit account.
Thus, merely because Section 35F restricts the pre-deposit amount as Rs.10 crore, does not mean that Assessee will not be entitled for interest on refund of pre-deposit amount under Section 35FF even if it paid the pre-deposit amount more than Rs.10 crore.
The interest has to be paid to the Appellant as per Section 35FF of the Central Excise Act, 1944. The impugned order is set aside - appeal allowed.
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2024 (9) TMI 111
Clandestine removal - shortage found in the raw material and the finished goods under Section 11A/11A(4) read with Section 174 of the CGST Act, 2017 - retraction of statements - mandatory penalty - HELD THAT:- The Adjudicating Authority has categorically concluded that the appellant had contravened the provisions of Rule 4, 6, 8,10, 11 and 12 of Central Excise Rules, 2002 by not recording its production of finished goods found short during the physical verification and not determining the central excise duty on the goods found short. Had the investigation not been taken up by the Department, the shortage in the stocks would not have come to light causing loss to the Government exchequer. In the circumstances, the imposition of mandatory penalty on the shortage detected, the appellant has been rightly held liable for penal action under Section 11 AC(1)(a) of the Act.
Reliance has been placed on the decision of the Apex Court in the case of Punjab Tractors Ltd. Vs. CCE, Chandigarh [2005 (2) TMI 141 - SUPREME COURT], where the Court has held that for violation of the Rules, the appellant is undoubtedly liable to pay the penalty as prescribed under the said Rules. The Tribunal also in the case of Amtek Auto Ltd. Vs. CCE, New Delhi [2000 (11) TMI 177 - CEGAT, NEW DELHI] has also held that the penalty is warranted for contravention of the Rules. Hence, no interference is called for in the imposition of penalty on the appellant.
Thus no interference is called for in the impugned decision and hence the same is affirmed - appeal dismissed.
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2024 (9) TMI 110
CENVAT Credit - input services - Manpower supply service and House Keeping service received by the appellant at their un-registered job working units - Availment of cenvat credit beyond six months from the date of the document - Invocation of extended period of demand - Interest and penalty.
Credit availed on man power supply services and house-keeping services - Availment of cenvat credit in respect of input services consumed in the unregistered job working premises and not consumed in the registered premises - HELD THAT:- The Hon’ble Jurisdiction High Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S. ASHOK LEYLAND LTD. [2019 (1) TMI 430 - MADRAS HIGH COURT] held that the definition of “input service” has to be widely construed, and in terms of Rule 3, which allows the manufacturer of final products to take Credit, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of final products. It was held that the decision of the Hon’ble Supreme Court in the case of Maruti Suzuki Ltd Versus CCE, Delhi-III [2009 (8) TMI 14 - SUPREME COURT] is not applicable in the case of input services - the disallowance of Credit alleging that the Credit has been availed in unregistered premises requires to be set aside.
Availment of cenvat credit beyond six months from the date of the document - HELD THAT:- It has to be noted that when duty is paid on inputs and service tax paid on input services a right accrues for availing Credit. All the invoices have been issued prior to September 2014. This means that invoices on which Credit has been availed have been issued before the introduction of the restriction limiting the time for availing the Credit. Nothing in the provision says that the 3 proviso to Rule 4 would have retrospective effect. The very same issue was considered by the Hon’ble High Court of Delhi in the case of GLOBAL CERAMICS PVT. LTD., M/S. B.R. CERAMICS (P) LTD. VERSUS THE PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, DELHI-1 [2019 (5) TMI 1432 - DELHI HIGH COURT]. While analyzing the issue as to whether the Credit can be availed on Countervailing Duty (CVD) paid by the appellant for imports that took place prior to the amendment to Rule 4 (1) of Cenvat Credit Rules prescribing the time limit, the Hon’ble High Court held that the said provision cannot be made applicable retrospectively and that the importer would be eligible to avail Credit for the imports prior to the date of introducing the time limit - there are no hesitation to conclude that the demand raised alleging that the appellant has availed Cenvat Credit on invoices issued prior to September 2014 contravening Rule 4 of CCR, 2004 cannot sustain and requires to be set aside.
Invocation of extended period of demand - HELD THAT:- Though it is alleged that the appellant has suppressed facts, there is no evidence adduced by the department to establish any positive act of suppression on the part of the appellant. The issues are purely interpretational in nature. In regard to the issue whether Credit can be taken on input services received in unregistered premises, the litigation has travelled upto Hon’ble High Court. In regard to the second issue whether the time limit introduced by Rule (2) would apply to invoices issued prior to the date was considered by various forums. All these would show that both these issues were debatable. For these reasons, the invocation of extended period cannot sustain.
The impugned orders are set aside - Appeal allowed.
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2024 (9) TMI 109
CENVAT Credit - outward transportation in respect of sale of goods - sale of goods is on FOR basis - inclusion of transportation charges in the assessable value of excisable goods on which excise duty was discharged - HELD THAT:- The lower authorities have confirmed the demand only on the basis of Kolkata High Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. VESUVIOUS INDIA LTD. [2013 (12) TMI 1025 - CALCUTTA HIGH COURT]. It was also observed by the Learned Commissioner adjudication that the judgment in the case of Commissioner of Central Excise in COMMISSIONER OF C. EX. & CUSTOMS VERSUS PARTH POLY WOOVEN PVT. LTD. [2011 (4) TMI 975 - GUJARAT HIGH COURT] is not relevant to the present case. However much water has flown on this issue as subsequent to the decision referred by the learned Commissioner the Hon’ble Supreme Court in the case of M/s. Ultratech Cement Ltd. [2018 (2) TMI 117 - SUPREME COURT] has decided the issue against the assessee, however on the basis of said judgment, the board has issued a circular wherein certain parameter was fixed to allow the cenvat credit in respect of outward transportation. Thereafter, this Tribunal in case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1487 - CESTAT AHMEDABAD] and M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD] held that where the freight is included in the assessable value, on which excise duty was discharged, fright was born by the supplier of the goods, the Cenvat credit on such output transportation is admissible.
The entire matter needs to be re-considered in the light of the fact of the present case and on the basis of various judgments delivered by the different forum subsequent to passing of the impugned orders - the appeals are allowed by way of remand to the adjudicating authority.
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2024 (9) TMI 108
Wrongful availment of common credit on input services used for trading and manufacture - period December 2008 to September 2013 - Time limitation - HELD THAT:- In the present case, the appellant has reversed the proportionate credit attributable to trading form 1.4.2011 onwards. The Annexure I of the SCN would show that the appellant has reversed the credit w.e.f. 1.4.2011. The department has not disputed the quantification of the amount that has been reversed by the appellant for the period after 1.4.2011. There is no case for department that the amount reversed is not in accordance with the formula prescribed under Rule 6 (3A) (b) of CCR, 2004. The adjudicating authority has confirmed the total common input credit. There is no provision to deny the credit of input services used for manufacturing activity. Hence the demand raised in SCN and confirmed by adjudicating authority is erroneous.
The reason given by adjudicating authority for confirming the entire common input credit is that appellant has availed credit on input services exclusively used for trading. On perusal of the SCN, it is found that these are merely assumptions made on the basis of invoices. It has not been established that the appellant has availed credit exclusively for trading. In the reply to SCN the appellant has stated that they have not availed credit on any input services exclusively used for trading. The confirmation of the entire common input service credit on such allegation is baseless.
Time Limitation - HELD THAT:- The issue as to whether trading can be considered as an exempted service was a debated issue prior to 1.4.2011. There were views expressed by various forums which held in favour of assesse. The issue is purely interpretational in nature. Further, w.e.f. 1.4.2011, the appellant has started reversing the proportionate credit which is clear from the Annexure to the SCN. Taking these aspects into consideration the appellant cannot be saddled with the guilt of suppression of facts with intent to evade payment of duty. There are no ingredients for invoking the extended period. The demand raised beyond the normal period is set aside as time barred. The appellant succeeds on the issue of limitation.
The impugned order is modified to the extent of setting aside the demand, interest and penalties for the extended period. The appellant is liable to reverse the proportionate as under Rule 6 (3A) for the normal period. The amount already reversed can be adjusted and applied to the normal period (If not already reversed). The penalties imposed for the normal period are set aside for the same reasons applicable to the issue of limitation.
Appeal allowed in part.
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2024 (9) TMI 107
Denial of CENVAT Credit on components, spares and accessories of capital goods, along with interest - Denial of CENVAT credit on welding electrodes which had been used by the appellant for manufacture of their final product and maintenance thereof - demand of interest on suo motu reversal by the appellant of CENVAT Credit when they were having sufficient balance in their CENVAT Credit Account - imposition of penalty.
Denial of CENVAT Credit on components, spares and accessories of capital goods, along with interest - HELD THAT:- Admittedly, the clarification issued vide Circular No. 276/110/96-TRU dated 02.12.1996 is self-explanatory, which clarifies that 'As such, scope of this entry is not restricted only to the components, spares and accessories falling under Chapters 82, 84, 85 or 90 but covers all components, spares and accessories of the specified goods irrespective of their classification.' - Therefore, all the components and parts mentioned hereinabove fall under the category of “capital goods” in terms of Rule 2(a) of the CENVAT Credit Rules, 2004. Thus, the appellant is entitled to take CENVAT Credit thereon.
Denial of CENVAT credit on welding electrodes which had been used by the appellant for manufacture of their final product and maintenance thereof - HELD THAT:- The welding electrodes are the inputs which were used in manufacturing the final products by the appellant. Therefore, in terms of Rule 2(k) of the CENVAT Credit Rules, 2004, the appellant is entitled to take CENVAT Credit.
Interest - HELD THAT:- The appellant was maintaining sufficient balance in their CENVAT Credit Account during the intervening period and therefore, no interest is payable by the appellant, as held by the Hon’ble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT].
Penalty - HELD THAT:- As the appellant is neither required to reverse CENVAT Credit nor liable to pay interest, therefore, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
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2024 (9) TMI 62
Appellant was paying the Excise duty on the Assessable Value which is undervalued - Revenue took the stand that Excise duty is payable on the cost construction method and not as per the price being charged on the buyers of the principal manufacturer - extended period of limitation.
HELD THAT:- There is no dispute that the Appellants are carrying on job work which amounted to manufacture in terms of Section 2(f) of the CEA, 1944. They were also paying Excise duty for the goods cleared at their end. For such clearances, they were adopting the price given by the principal manufacturer for clearance to the ultimate buyers. There is nothing to indicate in the entire proceedings that the Appellant had any role to play in fixing up of this price. There is also no allegation that the buyers of sponge iron were in any way related to the Appellant or to the principal manufacturer. Therefore, in such case, the assessable value has to be determined based on the transaction value only. The transaction value concept can be ignored only if it comes to light that the Appellant has received any further consideration from the buyer.
The Revenue’s argument that this is an additional consideration is wholly erroneous. The consideration is required to flow from the buyer and not from any other third party. Therefore, the entire proceedings have been taken up on a wrong notion that the Appellant is barred from relying upon transaction value for their clearances. On this count itself, the confirmed demand is required to be set aside.
So far as the Department’s contention that the cost construction method adopted by them would result in higher assessable value, it is also questionable. Apparently, if the price for the finished goods is fixed by the principal manufacturer, he would have taken into account all his costs plus the cost of conversion for the job work and cost of the consideration on account of scrap being given free of cost to the Appellant plus his own profit margin to arrive at the total price. That being so, even hypothetically the cost construction method at the end of the job worker cannot be presumed to be higher than the ultimate sale price (transaction value) adopted by the principal manufacturer unless the Department brings in any evidence towards additional consideration flowing back from the buyer.
The confirmed demand on merits set aside.
Extended period of limitation - HELD THAT:- There are considerable force in the Appellant’s argument that the SCN issued on 30.09.2010 is time barred. The Appellant has produced copy of the letter submitted by them on 31.08.2005 clearly specifying the procedure being adopted by them for the sponge iron being cleared to the buyers of the principal manufacturer by adopting the price given by him. Apart from this, audit queries have been raised in February, 2009 for which the Appellant has filed reply on 18.03.2009 - the confirmed demand for the extended period is also liable to be set aside on account of time bar.
The Appeal stands allowed both on account of merits and on account of limitation.
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2024 (9) TMI 61
Utilization of Cenvat credit of basic excise duty for payment of National Calamity Contingent Duty (NCCD) - HELD THAT:- The issue is no longer res- integra and the same is settled in various judgments as cited by the learned counsel.
In the case of C.C.E. & S.T. -SILVASA AND C.C.E. & S.T. -DAMAN VERSUS WELSPUN SYNTEX LTD AND M/S. WELLKNOWN POLYESTER LIMITED [2019 (11) TMI 1268 - CESTAT AHMEDABAD], this tribunal held that 'while Cenvat Credit of NCCD can be utilized under the Cenvat Credit Rules only towards payment of such NCC Duty, Cenvat Credit obtained from other sources can be utilized for payment of NCC Duty on the final product.' - From the above decisions of this tribunal it can be seen that the utilization of basic excise duty for the payment of NCCD has been allowed considering the provisions of Rule 3 of Cenvat Credit Rules, 2004.
As regard the heavy reliance placed by the revenue in the case of M/s. Unicorn Industries vs. UOI [2012 (5) TMI 621 - SIKKIM HIGH COURT], in that case the issue was different that whether the NCCD is an excise duty or surcharge. Even though as per the said judgment the NCCD is not an excise duty but a surcharge, rule 3 permits the utilization of basic excise duty for payment of NCCD. Therefore, judgment in the case of M/s. Unicorn Industries vs. UOI is not relevant on the issue and facts of the present case.
The respondent is correct in utilizing the credit of basic excise duty for payment of NCCD. Therefore, the impugned orders are legal and correct and the same deserve to be sustained.
The impugned order is upheld - appeal of Revenue dismissed.
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2024 (9) TMI 60
Clearance of by product namely Ammonium Sulphate - Benefit of N/N. 12/2012-CE whereby the rate of duty is 1 %, denied - case of the department is that since the appellant have availed Cenvat credit on the inputs, they are not eligible for Notification No.12/2012-CE whereby the rate of duty is 1% - HELD THAT:- Even though the appellant have availed the Cenvat credit on the inputs where final product is potassium Cyanide and Sodium Cyanide which are cleared at normal rate of duty without availing benefit of exemption Notification No. 12/2012-CE . It is only in respect of by-product i.e. Ammonium Sulphate, the appellant have availed the exemption notification. Since the ammonium sulphate is admittedly a by-product no duty @ of 6% can be made. Therefore, the demand is not sustainable.
In the appellant’s own case HINDUSTAN CHEMICALS COMPANY VERSUS COMMISSIONER OF C.E. & S.T. -SURAT-II [2024 (5) TMI 459 - CESTAT AHMEDABAD], this Tribunal held that 'We find that on the very same issue in the appellant’s own case, it has been decided that the Ammonium Sulphate being a by-product arising out of manufacture of final product namely, Potassium Cyanide and Sodium Cyanide, the same will not be liable for payment of an amount in terms of Rule 6(3) of Cenvat Credit Rules, 2004.'
Considering the above judgment in the appellant’ own case, the issue is no longer res-integra. Accordingly, the impugned order is set aside - appeal allowed.
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2024 (9) TMI 4
CENVAT credit on various items such as HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates which are in turn utilised in the manufacture of capital goods meant for construction of new plywood manufacturing unit during the period 13.09.2008 to October 2009 - HELD THAT:- The issue is no longer res integra, as far as the period prior to 07.07.2009 is concerned.
It is covered by the judgment of this Tribunal rendered in the case of M/S. BMM ISPAT LIMITED VERSUS THE COMMISSIONER OF CENTRAL EXCISE, BELGAUM [2024 (4) TMI 671 - CESTAT BANGALORE] wherein this Tribunal had elaborately discussed the ratios rendered in the case of M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] and M/S. THIRU AROORAN SUGARS, M/S. DALMIA CEMENTS (BHARAT) LTD. VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE [2017 (7) TMI 524 - MADRAS HIGH COURT] and also decision of Larger Bench of this Tribunal in the case of M/S. MANGLAM CEMENT LTD. VERSUS C.C.E., JAIPUR-I [2018 (3) TMI 1547 - CESTAT NEW DELHI], wherein it is held that CENVAT credit on various inputs such as MS Angles, MS Channels, MS beams, MS joists, MS plates, etc., used in the fabrication of various machineries, support structure, platforms for machineries and equipment, etc., used in the factory, is admissible.
For the period from 07.07.2009 to October 2009 the definition of ‘input’ under Rule 2(k). The Explanation 2 has been inserted to the said definition vide Notification No.16/2009CE(NT) dated 07.07.2009. Consequently, the items viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., has been specifically excluded from the scope of the definition of ‘inputs’.
Thus, for the period prior to 07.07.2009, the appellants are eligible to avail CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., and accordingly, demand confirmed is not sustainable; for the period 07.07.2009 to October 2009, in principle CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., are not admissible - the impugned order is modified and the appeal is remanded to the original adjudicating authority to recalculate the demand for the period after 7.7.2009, if any, payable. However, no penalty is imposable on the appellants.
Appeal disposed off.
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