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Central Excise - Case Laws
Showing 361 to 380 of 81317 Records
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2024 (9) TMI 3
Delayed adjudication of SCN without a reasonable cause - Delay in finalization of assessments and issuance of demand - Classification of goods - Sodium Carboxy Methyl Cellulose - to be classified under TI 68 or under Tariff Item 15 - finalisation of provisional assessment made earlier under Rule 9B - period of dispute is for the period 28.02.1892 to 27.02.1986 - HELD THAT:- There is absolutely no justification for the Department to wait for nearly one year after the Tribunal’s Final Order to start the proceedings belated by issuing the show cause notice on 04.04.2008 against the express direction of the Tribunal to conclude the Denovo proceedings itself within 4 months from the date of receipt of the Order dated 18.04.2007. From the Final Order dated 18.4.2007 of the Tribunal it gets clarified that the time frame of 4 months given was not only for issue of SCN, but also to complete the entire proceedings for determination of duty payable as a consequence to such finalization.
Since for the second time the Revenue has failed to adhere to the time frame to finalize the assessment, as mandated by the Tribunal, it is held that the confirmed demand is legally not sustainable.
The Revenue failed to finalize the assessment within the normal period. Then Tribunal intervened and saved the Revenue by directing them to complete the de-novo proceedings within Four months. Thus, a lenient view was taken by the Tribunal, which in the normal course could have set aside the impugned order confirming the demand which was made without actual finalization of the assessment. This lenient view came with a caveat that the process of determination has to be completed within four months. Finally, the proceedings were completed in about 14 months, violating the time frame condition specified by the Tribunal.
There is catena of judgments of Hon’ble Supreme Court, High Courts where delayed adjudication of SCN without a reasonable cause has been considered as a ground for setting aside the Order passed pursuant to the said SCN. In the present case there was clear direction in 14.10.1986 Order of the Assistant Commissioner for finalizing the assessment which should have been finalized within reasonable period of six months, at best. Even if the SCN was to be issued in time for finalizing, it should have been issued within some reasonable period. Admittedly, both these actions were not done and in fact appears to have been done by issuing show cause notice on 04.04.2008 and passing the OIO on 22.10.2008.
The delayed finalization of the assessment taking 14 months to do so, as against the direction to finalise within 4 months period given by the Tribunal vide its Final Order No. 462/2007 dated 18.04.2007 is fatal to the present proceedings and we set aside the impugned order and hence we allow the appeal - Once the classification issue was decided vide OIO dated 14.10.1986 with clear Order, no further action was taken for the next 22 years to finalize the assessment as per the demand made under Section 11A and that the assessee [appellant] is required to pay the differential duty,. The demand which was raised after 14 years [vide letter dated 19.09.2000] was also without finalizing the provisional assessment.
Appeal allowed.
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2024 (9) TMI 2
Denial of CENVAT Credit - appellant referred extensively to the letter dated 19.01.2017 submitted by the Assistant Commissioner in response to the letter submitted by the appellant for furnishing a certificate relating to CENVAT credit in terms of the order dated 22.05.2012 passed by the Commissioner - HELD THAT:- It clearly transpires from the letter dated 19.01.2017 sent by the Assistant Commissioner to the appellant that from the records, including the original invoices supplied by the appellant, the appellant had paid duty to the extent of Rs. 2,32,46,986/-.
The Principal Commissioner, however, without adverting to this letter has recorded a finding that the appellant failed to submit documents despite repeated opportunities having been granted to the appellant.
This finding recorded by the Principal Commissioner is perverse as the letter dated 19.01.2017 was on the record. This letter should have been considered by the Principal Commissioner before recording any finding on the admissibility of CENVAT credit - The appellant has not challenged the the order passed by the Principal Commissioner on merits.
The portion of the finding recorded by the Principal Commissioner in the impugned order that the appellant is not entitled for CENVAT credit deserves to be set aside and is set aside. The appellant is held entitled to CENVAT credit in terms of the letter dated 19.01.2017 sent by the Assistant Commissioner to the appellant.
Appeal disposed off.
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2024 (8) TMI 1492
Default in payment of duty beyond thirty days from the due date as prescribed in sub rule (1) of Rule 3 of Cenvat credit Rules 2004 - Violation of Rule 8(3A) of Central Excise Rules 2002 - main argument of appellant is that Rule 8(3A) of Central Excise Rules, 2002 has been struck down as unconstitutional by the Hon’ble High Courts and therefore the confirmation of demand cannot sustain - HELD THAT:- The Hon’ble High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT] has struck down Rule 8(3A) as unconstitutional on the ground that the prescribed Rule which says that the duty has to be paid without using the Cenvat credit is arbitrary and infringement of substantive right of Cenvat credit.
The Hon’ble High Court in the case of M/S. MALLADI DRUGS & PHARMACEUTICALS LTD. VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CENTRAL EXCISE [2015 (5) TMI 603 - MADRAS HIGH COURT] had declared the provision to be unconstitutional. Once the provision is declared by any High Court as unconstitutional then the said provision is non-existent.
The demand cannot sustain. In the result, the impugned order is set aside - The appeal is allowed.
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2024 (8) TMI 1491
Wrongful availment of CENVAT Credit on capital goods - contravention of provisions of Rule 4(2)(a) of CCR, 2004 - HELD THAT:- In the present case, the appellant had transferred the capital goods from their Vellore factory to the appellant unit situated in Ranipet on account of shifting of the entire factory. Rule 10 of CCR, 2004 allows transfer of credit in case of shifting of factory. Hower, the appellant had opted to raise an invoice for shifting the capital goods to their unit at Ranipet. They paid the duty on the capital goods as per the invoice raised while shifting and the credit of such duty was availed in the Ranipet unit. Being shifting of the capital goods, the appellant took entire credit in the same year. The allegation is that the appellant ought not to have taken entire credit in the same financial year. For this reason, 50% of the credit to the tune of Rs. 26,97,256/- has been denied by the Department and the said amount has been confirmed alleging violation of Rule 4(2) of Central Excise Rules, 2002. It is to be noted that even if the appellant is entitled to take only 50% credit in the first financial year, they would be able to take the balance credit in any subsequent year. The error is only with regard to the procedure of taking credit - When the appellant is eligible to take the balance credit in subsequent financial year and has paid the interest and penalty in this regard, the Department ought not to have issued any Show Cause Notice. In any case, it is only a procedural infraction, and the appellant having paid interest as well as the penalty, the demand of duty confirmed along with interest and penalties in this regard requires to be set aside.
Demand of duty raised alleging violation of Rule 8(3A) of Central Excise Rules, 2002 - HELD THAT:- The Hon’ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS NASHIK – II COMMISSIONERATE VERSUS M/S. NASHIK FORGE PVT. LTD. [2018 (9) TMI 1582 - BOMBAY HIGH COURT] has held that Rule 8(3A) to be unconstitutional as it infringes upon the substantive right of an assessee to utilize Cenvat credit. Further, the Tribunal in the case of INDUS TROPICS LTD VERSUS C.C.E. & S.T. -RAJKOT [2023 (3) TMI 950 - CESTAT AHMEDABAD] has followed the decisions of various High Court to set aside the demand alleging violation of Rule 8(3A) of Central Excise Rules, 2002.
The demand raised alleging violation of Rule 8(3A) cannot sustain and requires to be set aside - the impugned order is set aside - The appeal is allowed.
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2024 (8) TMI 1468
Refund of the Service Tax paid on ‘Scientific and Technical Consultancy Service’ and legal service on which Service Tax was belatedly paid under reverse charge mechanism, in terms of Section 142(3) of CGST Act, 2017 read with Section 11(B) of Central Excise Act, 1944 - rejection of refund on the ground that the payment of Service Tax was made after 01.07.2017 during GST regime for the period prior to 01.07.2017 - Whether Section 142(8)(a) puts any bar for granting the refund of Cenvat credit in terms of Section 142(3) of CGST Act, 2017?
HELD THAT:- From the plain reading of the Section 142(3), it is observed that the said Section deals with the eventualities when the assesse is not in a position to avail the Cenvat credit. Therefore, the amount of Cenvat credit is refunded in cash, under the said provision. The Section 142(3) also deals with the amount which is accrued prior to GST regime. Accordingly, the situation arose in the present case is exactly the same for which provision of Section 142(3) was enacted. The amount of service tax was pertaining to the period prior to 01.07.2017 which is payable under the existing law. Subsequently, the said amount became admissible as a Cenvat credit under existing law and since the same cannot be availed as Cenvat credit after 01.07.2017, the only option is to refund the same in terms of Section 142(3).
Section 142(8)(a) of CGST Act, 2017 provides that any amount of tax which was recoverable under the existing law before 01.07.2017 and the same is recovered, the amount recovered shall not be admissible as input tax credit under this Act. There is no ambiguity in the provision that any amount of tax paid under the existing law as was done in the present case no input tax credit is admissible - Both the lower authorities have gravely erred in interpreting the input tax credit as if the same is Cenvat credit. Therefore, the finding of both the lower authorities dealing with the Section 142(8)(a) of the CGST Act, 2017, for rejecting the present refund claim is absurd and absolutely illegal. Therefore, on this ground also refund could not have been rejected.
As regard the contention of the lower authorities that since the amount of service tax was paid on pursuance by the audit party, the refund is inadmissible. In this regard, it is found that neither any show cause notice for recovery of the service tax invoking any extended period was issued nor adjudication of such proceeding was done. Therefore, in not paying the service tax, no mala fide intention or suppression of fact is involved. Therefore, merely because the appellant have paid the service tax on pursuance by the audit will not be a reason for denying the refund under Section 142 - except the grounds for rejection no other issues have been dealt by the sanctioning authority such as admissibility of the input service for Cenvat credit, unjust enrichment and relevant documents verification. Accordingly, the matter deserves to be remanded to the adjudicating authority only for the limited purpose.
The impugned order is set aside - Appeal is allowed by way of remand to the adjudicating authority.
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2024 (8) TMI 1465
CENVAT Credit on goods received from other manufacturers - denial of credit on the ground that for the goods received from other manufacturers since the goods are already the finished goods of the appellant - value addition on goods - HELD THAT:- While discharging this Excise Duty, they have utilized the CENVAT Credit of 1,63,96,895/- and paid the balance amount of Rs. 7,58,271/- by cash. This shows that there has been some value addition and they have paid higher duty on the finished goods than whatever CENVAT Credit they have taken on the goods received from their vendors.
The Mumbai Tribunal in the case of Bunty Foods India Pvt. Ltd. v. CCE Thane [2017 (10) TMI 204 - CESTAT MUMBAI] has held 'In the facts of the present case, the appellants have brought the duty paid goods from various vendors and the same were repacked as per the requirements of export and goods were exported, even though the activity was not amount to manufacture, they have discharged excise duty. Therefore, in our view, the appellants have complied with the provisions of Rule 16(1) and (2).'
In the present case, it is not in dispute that the appellant has reversed the entire CENVAT Credit and also paid further Rs. 7,58,271/- under PLA account while clearing the goods which they had bought from other vendors. Therefore, the ratio laid down by the Tribunal in the case of Bunty Foods is squarely applicable. A careful reading of Rule 16 of CER 2002 clarifies that any goods on which duty has been paid at the time of removal can be taken as CENVAT Credit. It does not specify that the finished goods of any other third party cannot be used as input by the assessee for availing the concession of Rule 16(1), 16(2). It is clearly stated that the amount of Excise Duty paid while clearing such goods received under Rule 16(1) should be either equivalent or more than the CENVAT Credit taken. This condition has been fulfilled in the present case.
In view of the foregoing, the impugned order is set aside and appeal allowed.
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2024 (8) TMI 1447
Refund of excise duty paid under protest - duty paid on by-product molasses, on its captive consumption (being exempted under Notification No. 67/95CE dated 16.3.1995, as amended) for the manufacture of exempted final products viz., Rectified Spirit and Extra Neutral Alcohol - duty paid during April 2008 to March 2010 - HELD THAT:- The issue has already been considered by this Tribunal in their own case in BANNARI SMMSN SUGAR LTD VERSUS C.C.,C.E. & S. T-MYSORE [2018 (2) TMI 813 - CESTAT BANGALORE].
Also taking note of the various aspects on the issue and precedent judgments and analysing the submissions made by both sides, recently this Tribunal in the case of M/S. NSL SUGARS LTD. (FORMERLY M/S. SCM SUGARS LTD.) VERSUS THE COMMISSIONER OF CENTRAL EXCISE MYSORE-I DIVISION, MYSORE [2024 (8) TMI 992 - CESTAT BANGALORE] following the judgment rendered in the case of GODAVARI SUGAR MILLS LTD. VERSUS COMMISSIONER OF C. EX., BELGAUM [2006 (11) TMI 497 - CESTAT, BANGALORE] has held 'relevant provisions of Rule 6 of CCR, 2004 has taken a view that credit on inputs availed and used in the manufacture of molasses, an input and intermediate by-product, which in turn is used in the manufacture of exempted final products viz., Ethyl Alcohol and denatured spirit, therefore, inputs attributable to the manufacture of molasses, on its reversal, is a sufficient compliance of Rule 6 of CCR, 2004; hence, eligible to the benefit of Notification No.67/95-CE dated 1.3.1995.'
The impugned order is set aside and the appeal is allowed.
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2024 (8) TMI 1403
Rejection of appellant’s preliminary objections - Appellant had raised a preliminary objection that the pre-deposit made by the Electronic Credit Ledger was not valid as due compliance to Section 83 of the Finance Act, 1994 read with Section 35F of the Act - HELD THAT:- The preliminary objections by revenue was rejected because the CESTAT rightly concluded that the circular had come into force only on 28th October 2022 and the appeal had been filed much before the circular came into force. Relying upon the judgment of the Hon’ble Apex Court in COMMR. OF C. EX., BANGALORE VERSUS MYSORE ELECTRICALS INDUSTRIES LTD. [2006 (11) TMI 202 - SUPREME COURT] the CESTAT held that the circular would apply only prospectively.
In fact, this court in OASIS REALTY, ROMA BUILDERS PVT LTD. AND MACROTECH DEVELOPERS LIMITED, VERSUS THE UNION OF INDIA, THROUGH THE SECRETARY, (REVENUE) MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI THE JOINT COMMISSIONER OF STATE TAX, (APPEAL) – V, THE DEPUTY COMMISSIONER OF STATE TAX, MUMBAI – LTU THE STATE OF MAHARASHTRA [2022 (10) TMI 42 - BOMBAY HIGH COURT] has held that assessee may utilize the amount available in the Electronic Credit Ledger to pay 10% of the amount of tax in dispute under Section 107 (6) of the Maharashtra Goods and Services Tax Act, 2017.
Appeal dismissed.
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2024 (8) TMI 1402
Area based exemption under the provisions of the N/N. 50/2003-CE dated 10.06.2003 - denial of benefit on the ground that the khasra numbers on which the appellant unit is situated, is not notified in the Annexure II or III appended to the said Notification dated 10.06.2003 - benefit of cum-duty price - HELD THAT:- An identical issue pertaining to the previous period has been decided by the Division Bench of this Tribunal in M/S PARVATIYA PLYWOOD PRIVATE LIMITED AND AKHILESH PRATAP MD VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX-MEERUT-II AND COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS AND CENTRAL EXCISE-DEHRADUN [2022 (12) TMI 451 - CESTAT NEW DELHI] where it was held that 'the appellant is entitled to the benefit of recalculation of demand on cum- duty basis in accordance with explanation to Section 4(1)(b) of the Central Excise Act. We find that admittedly appellant have not collected Central Excise duty in addition to the sale price, in view of their claim of Area based exemption. Thus, the appellant shall be entitled to benefit of calculation of duty on cum-duty-price.'
Cum duty benefit - HELD THAT:- It is also noted that the impugned order has allowed the benefit of cum-duty and has denied the benefit of CENVAT credit on inputs.
The matter to the original authority for verifying the claim for availing Cenvat credit on the duty paid inputs, giving an opportunity to the appellant to produce all relevant invoices/ledgers and other relevant documents before the adjudicating authority to substantiate their claim for CENVAT credit - Appeal allowed by way of remand.
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2024 (8) TMI 1401
CENVAT Credit - inputs - whether Cenvat credit availed on inputs such as HR Plates, Shape & Section, Channels under Tariff Chapter No.72 & 73 and Welding Electrode under Tariff Heading No.8311 would be admissible or not? - HELD THAT:- In the impugned order demand has been confirmed only on the basis of the Larger Bench decision in the case of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] which is no longer a correct law and which has been set aside by the Hon’ble High Court in the decisions cited supra by the Appellant.
Further, it is found that this issue is no more res integra and it has been consistently held by the High Court that the decision of the Larger Bench in Vandana Global is not a good law and once the decision in the case of Vandana Global has been held to be not a good law, therefore, the Appellant is entitled to avail the Cenvat Credit on various steel items and welding electrodes.
The impugned orders are not sustainable - the impugned order is set aside - appeal allowed.
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2024 (8) TMI 1400
Reversal of SAD in terms of Rule 3 (5) of Cenvat Credit Rules, 2004 - applicability of Section 11D when the SAD credit has been reversed but shown in the invoice - HELD THAT:- From the above rule 3 (5) it is clear that when any input is cleared as such whatever credit is availed on such input is required to be reversed. Therefore, the appellant have rightly reversed the amount equal to cenvat credit on such input. From the provision Section 11 D it is clear that any amount collected in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. This shows that any amount showing as excise duty collected but not paid shall be paid to the credit of Central Government.
In the present case, admittedly the amount was determined and paid in terms of Rule 3 (5) of Cenvat Credit Rules, 2004. Therefore, the provisions of Section 11 D is not applicable.
In the case of UNISON METALS LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD-I [2006 (10) TMI 171 - CESTAT, NEW DELHI-LB], the larger bench of this tribunal held that 'The scheme of the law is that manufacturers shall not collect amounts falsely representing them as central excise duty and retain them, thus, unjustly, benefiting themselves. In the present cases, (irrespective of whether the 8% payments were duty or not) since the 8% amount remain already paid to the revenue, and no amount is retained by the assessee, Section 11D has no application.'
In view of the above judgment, it is clear that once the amount of duty has been paid to the Government and the same is charged in the invoice, provisions of Section 11 D will not apply. The similar facts are available in the present case also in as much as the appellant have paid the amount shown in the invoice by reversing the credit in their Cenvat account. Therefore, in this fact the demand under Section 11 D is not sustainable.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1399
Remission of excise duty on the goods destroyed in fire - requirement to pay the Cenvat credit in respect of the inputs contained in the finished goods which were destroyed in fire.
Remission of duty - HELD THAT:- There is no dispute that the goods were destroyed in fire . The fire accident was unavoidable and on the entire fire accident the Insurance Company also processed the insurance claimed and the same has been sanctioned to the appellant. In such case the appellant is clearly entitled for the remission of the duty in respect of the goods destroyed in fire as provided under Rule 21 of the Centra Excise Ryles, 2002 - From the plain reading of the rule 21, the objective of the Rule is that if the goods have been lost or destroyed by natural cause or by unavoidable accident at any time before the removal , the commissioner may remit the duty payable on such goods subject to conditions as may be imposed by him by order in writing.
In the present case, there is no dispute that the goods have been destroyed in fire which is an unavoidable accident and there is no evidence of any mis-chief or malafide intention of the appellant in the fire accident. Therefore, as per the facts and circumstances on record, the appellant ‘s case is clearly covered by Rule 21 of the Central Excise Act, 2002.
Reversal of Cenvat credit on input as such destroyed in the fire - HELD THAT:- The appellant is not contesting as the same as has been reversed by the appellant. Accordingly, the said reversal is maintained.
In the present case also the period involved is January-2006 during which there is no specific provision for reversal of credit which was brought by Rule 5 (D) (C) of Rule 3 of Cenvat Credit Rules, 2004 vide Notification No 33/2007 – CE (NT ) dated 07.09.2007. Therefore, prior to September, 2007 there was no requirement of reversal of Cenvat Credit as held in the above judgments. Therefore, the appellant is not required to reverse the Cenvat credit in respect of inputs contained in the finished goods which were destroyed.
The impugned order stands modified - Appeal allowed.
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2024 (8) TMI 1398
Availment of credit on jumbo bags and after printing and repacking these jumbo bags cleared for export - printing of the supplier’s name on the jumbo bags - process amounting to manufacture or not - Extended period of limitation - suppression of facts or not.
CENVAT Credit - process amounting to manufacture or not - HELD THAT:- The jumbo bags received by the appellant even after printing remains as jumbo bags and the same are marketable even without printing. Hence, printing cannot be incidental or ancillary to the completion of a manufactured product as is held in the case of BRAKES INDIA LTD. VERSUS SUPERINTENDENT OF CENTRAL EXCISE [1997 (3) TMI 120 - SUPREME COURT] where the Hon’ble Supreme Court clearly held that 'When adopting a particular process, if a transformation takes place, which makes the product have a character and use of its own, which it did not bear earlier, then the process would amount to manufacture within the meaning of Section 2(f) irrespective of the fact whether there has been a single process or have been several processes.'
Therefore, availing cenvat credit on the jumbo bags as inputs which have been received for the purpose of printing is irregular in as much as the jumbo bags remains the same even after printing.
Extended period of limitation - suppression of facts or not - HELD THAT:- The revenue was aware of the irregular of availment of credit in the month of August 2008 itself. Having not issued show-cause notice during the first audit they cannot allege suppression at the time of second audit - unless there is evidence to show there is wilful suppression on the part of the appellant the demand cannot be sustained beyond the normal period.
The impugned order is set aside on limitation and the appeal stands allowed.
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2024 (8) TMI 1397
Method of valuation - to be valued on MRP basis under Section 4 A or under Section 4 of Central Excise Act, 1944 - sugar confectionery falling under chapter heading under 1704.90 and 1804.90 being manufactured by the appellant, the individual piece weighing less than 10 grams per piece and the same are packed in 500 grams pack - HELD THAT:- The same issue decided in the appellant’s own case SWAN SWEETS PVT LTD VERSUS C.C.E. & S.T. -RAJKOT [2023 (7) TMI 538 - CESTAT AHMEDABAD] where it was held that 'In the identical facts in the appellant’s own case SWAN SWEETS PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT [2006 (1) TMI 269 - CESTAT, MUMBAI] it was held that wholesale pack of 500 grams to 1 kg is not retail pack and therefore taking the weight of individual piece of confectionery which is less than 10 grams will not be governed under Section 4A.'
In view of the above decision in the appellant’s own case the issue is no longer res-integra - the impugned orders are not sustainable and the same are set aside - appeal allowed.
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2024 (8) TMI 1396
Classification of goods - Salmonella Antigens Sets - to be classified under Central Excise Tariff Heading No. 3822 as claimed by the Revenue or 3002 as declared by the Appellant? - HELD THAT:- The identical issue decided in the appellant’s own case RECKON DIAGNOSTICS P LTD VERSUS C.C.E. & S.T. -VADODARA-I [2023 (11) TMI 718 - CESTAT AHMEDABAD] and RECKON DIAGNOSTICS P LTD VERSUS C.C.E. & S.T. -VADODARA-I [2023 (11) TMI 884 - CESTAT AHMEDABAD] for the previous period, this Tribunal has passed order dated 17.11.2023 & 27.09.2023, holding that 'the classification of product ‘WIDAL-SALMONELLA ANIGENS KIT’would be correct by classified under Chapter heading 30.02, as claimed by the assessee.'
The issue in the appellant’s own case stand settled and the same is no longer res-integra - Appeal allowed.
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2024 (8) TMI 1395
Time limitation for issuance of SCN - relevant date in terms of section 11A of the Central Excise Act - levy of penalty under the provision of section 11AC (1) (c) of the Central Excise Act - HELD THAT:- There is no error in the finding recorded by the Commissioner (Appeals) that the relevant date in terms of section 11A of the Central Excise Act would the date on which the Supreme Court delivered the judgment i.e. 24.09.2014. If that be so, the show cause notice was issued within the normal period of limitation and there was no necessity at all of taking recourse to the extended period of limitation.
Though the impugned order proceeds to impose penalty under the provision of section 11AC (1) (c) of the Central Excise Act but as it has been found that the notice was issued within the normal period of limitation, penalty can be imposed under section 11AC (1) of the Central Excise Act which would not exceed 10% of the duty or Rs. 5,000/- whichever is earlier.
When the duty was levied pursuant to the directions issued by Supreme Court and the appellant was under an impression that the judgment is prospective in nature, it would be appropriate to reduce the penalty to Rs. 10,000/-.
The order impugned dated 22.03.2018 is modified to the aforesaid extent only - Appeal allowed in part.
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2024 (8) TMI 1329
Classification of goods - bins - to be classified under Tariff Sub-Heading 8474 90 or under Tariff Sub-Heading 7308 90? - Applicability of Rule 57U and Rule 57AH - HELD THAT:- The SCN was issued under Rule 57U and not under Rule 57AH. Admittedly, Rule 57U was omitted by the time the SCN was issued. This issue was never argued at any stage by either side nor had this Tribunal examined if Rule 57U existed at all while passing the final order remanding the matter to the Commissioner. Everyone including this Tribunal proceeded on the presumption that it had existed at that time.
Even in the written submissions given to the Commissioner on 8.3.2021, the appellant did not raise this issue. After two years, on 26.4.2023, the Commissioner held a personal hearing when the appellant had appeared and made submissions. It does not appear that at any of these stages, the Commissioner had pointed out to the appellant that their case would be examined under Rule 57AH and not under 57U and had given then an opportunity to examine Rule 57AH and make submissions. Only in the discussions part of the impugned order, the Commissioner held that Rule 57U was already repealed and examined the case under Rule 57AH - there are no reason why the Commissioner did not point out that Rule 57U had not existed at the relevant time and therefore, he would be examining the case under Rule 57AH.
Also, the new Rule 57AH increased the time limit from 6 months to one year and therefore, the liability of the appellant was increased in the impugned order behind the appellant’s back without ever giving the appellant even an opportunity to defend itself.
The SCN was issued under Rule 57U which was not existing at that time and the appellant was never given an opportunity defend against or were even put to notice that their case will be examined under a new Rule 57AH which increased their liability.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1328
Eligibility for input Cenvat credit and its utilisation for payment of duty demanded on job worked goods - invocation of Extended period of limitation - levy of fines and penalties.
Whether the Appellant is eligible to the input Cenvat credit and its utilisation for payment of duty demanded on job worked goods? - HELD THAT:- There is no evidence on record to show that the goods have been directly received by the Appellant on the directions of the principals. The Appellant (A1) has failed to comply with Rule 9(5) of CCR as they have failed to maintain proper records for the receipt, disposal, consumption and inventory of the inputs in which the relevant information regarding the value, duty paid and Cenvat credit taken and utilised, the persons from whom such inputs are procured is recorded and the burden of proof regarding the admissibility of Cenvat credit shall lie upon the manufacturer which is the Appellant (A1) in this case.
It is a settled law that adjustment of Cenvat credit of inputs is permissible whenever demand is made by the Department on the final manufactured goods.
The Appellant (A1) is eligible to avail Cenvat Credit on the inputs used in the manufacture of job worked goods provided the suppliers of these raw materials endorse the documents in favour of the Appellant (A1) and subject to verification of the duty paid nature of input invoices / documents / Bills of Entry, which were already submitted to the Adjudicating Authority. In paragraph 46.15 of the Order of Adjudicating Authority, it was mentioned that all the documents in five spiral bound booklets for examining the Appellant’s eligibility for input Cenvat credit were sent to the Assistant Commissioner of Central Excise, Coimbatore-II division for conducting verification - As there is a considerable delay, verification of the documents submitted to be got completed within a period of 6 months from the date of communication of this order.
Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT:- The Appellants have not given the true picture of the activity carried out by them on job work. It is also to be noted that the Appellant (A1) has not paid service tax till the raising of the Audit objection in March 2012 though they have started job work production for the suppliers of raw materials from June, 2010. Neither they have paid excise duty nor service tax during this period. The details relating to manufacture of excisable goods on job work basis out of the raw materials supplied by the traders and non-payment of central excise duty thereon was not disclosed by the Appellant (A1) either in the ER-1 Returns filed or by service tax payment or in any other manner - Even, the conduct of appellant defies logic when they have not discharged the excise duty on job worked goods but were paying on its own production of identical goods. In view of the above detailed reasoning, it is held that larger period has been rightly invoked.
Whether the imposed fines and penalties are justifiable or not? - HELD THAT:- There are no merit in submission of Shri Vikas Sanghrajka (A5), Executive Director of Appellant (A1) that they were under mistaken impression that job work activity undertaken by them would not be manufacturing activity when they have obtained registration and treating the identical activity as manufacture. He is well aware that there was no difference between the manufacturing activity in respect of their own goods and the job work done in respect of suppliers’ goods - As in charge of day to day activities of the company, he is accountable for deliberate and well planned contravention of the provisions of law in job work manufacture and clearance of the excisable goods without payment of duty. The statement of Smt. Libra, Director of Appellant (A1) to the effect that the company had made incorrect mention of the activity as ‘cutting’ with an objective to limit duty liabiity supports wilful contravention of law to evade payment of applicable excise duty. Thus, he has played a crucial role in facilitation of removal of excisable goods manufactured on job work without payment of duty.
The Appellants (A2-A4) had connived in the commission of offence of non payment of duty on the job worked goods and so are liable to penalty under the Rule 26 (1) of the Central Excise Rules, 2002 - however, the penalties imposed are on the higher side and to meet the ends of justice, the same are reduced.
The appeals are partly remanded and partly allowed.
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2024 (8) TMI 1327
Special Additional Excise Duty (SAED) levied as a Surcharge under Section 147 of the Finance Act 2002 - Additional duty of Excise (AED) levied as Road and Infrastructure Cess under Section 112 of the Finance Act 2018 - goods manufactured and exported by the Respondent viz. Reliance Industries Limited - rejection of refund application on the ground that SAED (Surcharge) and AED (Cess) were payable on MS, HSD and ATFwith effect from 1-7-2022 under the said Notification no.4/2022-CE dated 30-6-2022, Notification No.5/2022-CE dated 30-6-2022 and Notification no.10/2022-CE dated 30-6-2022.
Whether the levy of special additional excise duty as surcharge under Section 147 of the Finance Act, 2002 and additional duty of excise levied as road and infrastructure cess under Section 112 of Finance Act, 2018 read with relevant Notifications Nos.04/2022-CE dated 30.06.2022, 05/2022-CE dated 30.06.2022, 10/2022-CE dated 30.06.2022 and 19/2022 dated 19.07.2022 in respect of SEZ unit is correct and if not whether the respondent are eligible for the refund of the duty which has already been paid by the respondent?
HELD THAT:- Under both the Sections 147 and 112 of the Finance Act, 2002 and 2018 respectively, it is clear that both the duties are in addition to the duties of excise chargeable on such goods under the Central Excise Act. Therefore, these duties are in other words become a part of duties of excise chargeable on such goods in terms of Section 3 of the Central Excise Act, 1944. Moreover, sub section (3) of both the Sections 147 of the Finance Act, 2002 and Section 112 of Finance Act, 2018 clearly provide that the provision of Central Excise Act and the Rules made there under, shall as far as may be apply in relation to levy and collection the SAED and AED on the goods in question under that Act or those rules as the case for. In view of this clear position since the levy of SAED and AED under Section 147 and 112 of the Finance Act 2002 and 2018 respectively are in addition to the duties of excise chargeable on such goods under the Central Excise Act, the provision of relevant Section 3 of Central Excise Act, 1944 shall be statutorily invoked and applied in this case.
From the Section 3 which is Parent Act for levy of Excise duty clearly provides that the duties of excise to be called as central value added tax shall be levied and collected on all excisable goods which are produced or manufactured in India. However, it clearly eschewed the goods produced or manufactured in Special Economic Zone. The levy of SAED and AED cannot be made in isolation in terms of Section 147 of the Act, 2002 and Section 112 of Finance Act, 2018 without applying the provision of Section 3 of the Central Excise Act as per the mandate given in sub Section (3) of Section 147 and Section 112 of the Finance Act, 2002 and 2018 respectively - in view of the clear statutory provision as reproduced above. In respect of goods manufactured or produced in special economic zones, no excise duty as well as SAED and AED is levied.
It is a settled law that the subordinate legislation cannot overrule the primary legislation. The primary legislation is enacted by parliament and under the said legislation the executive power is given to make laws in order to implement and administer the requirements of the primary legislation. Such law is the law made by a person or body other than the legislature but with the legislature’s authority. Article 13(3) of the Indian Constitution includes within the definition of law forms of subordinate legislation such as order, rule, regulation, notification. Therefore, the subordinate legislation in the present case i.e. Notification No.19/2022-CE dated 19.07.2022 which was issued contrary to the provision of Section 3 of Central Excise Act read with Section 147 and 112 of Finance Act, 2002 and 2018 respectively. Hence the same cannot prevail over the primary legislation - even though, the Notification No.19/2022- CE created the same is not binding for the reason that the same is not in consonance with primary legislations which is Section 3 of Central Excise Act, 1944 read with Section 147 of the Finance Act, 2002 and Section 112 of the Finance Act, 2018. This Tribunal has to give primacy to the primary legislation and not to the subordinate legislation.
For levy under Section 147 and 112 of 2002 and 2018 Act respectively the taxable territory needs to be decided on the basis of Section 3 of Central Excise Act 1944 which excludes the territory of SEZ. Therefore as regard the taxable territory such exclusion shall apply mutatis mutandis for levy of SAED and AED under Section 147 of 2002 Act and 112 of 2018 of Finance Act.
Similar issue has been considered in the respondent’s own case by this Tribunal RELIANCE INDUSTRIES LTD. VERSUS C.C.E & ST-CGST & CE-RAJKOT [2024 (2) TMI 1419 - CESTAT AHMEDABAD] wherein, this Tribunal held that goods manufactured in the SEZ unit are not liable to said SAED ( surcharge ) AED (road and infrastructure cess) under Section 147 of Finance Act, 2002 and Section 112 of Finance Act 2018 respectively.
From the plain reading of the Section 51 of SEZ Act, 2005, it makes clear that the provision of SEZ Act shall have overriding effect on any law or Act in respect of the provision which is inconsistent with the provision of SEZ Act. In the present case, the SEZ Act exempts all duties in respect of the goods manufactured in the SEZ whereas the Revenue contented that Section 147 of Finance Act 2002 and Section 112 of Finance Act, 2018 are independent Act under which the levy of SAED and AED are applicable on SEZ unit also. In this position, since the Section 147 of the Finance Act, 2002 and 112 of Finance Act, 2018 creating an inconsistency with the provision of SEZ Act then the provision of SEZ Act overrides the provision of Finance Act, 2002 and 2018. For this reason also, the Revenue’s proposal for levy of SAED and AED on the respondent’s SEZ unit is illegal and incorrect.
The respondent was not liable for payment of SAED and AED being an SEZ unit. Hence the said duties so paid are refundable to the respondent along with interest, in accordance with law. As a result the revenue’s appeal is dismissed.
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2024 (8) TMI 1275
Passing on fraudulent Cenvat Credit, for the period from April 2016 to June 2017 - fake invoices without actual supply of goods was investigated - evidence to indicate non supply of goods produced or not - HELD THAT:- The whole chain of evidence as mentioned by the department indicates that the goods did not move from various parties to M/s. Ridhi Sidhi as per testimonial evidence nor were supplied to M/s. Ridhi Sidhi and documents on the record on the Books of Accounts of M/s. Ridhi Sidhi were not genuine. However, the second link in the chain of evidence, which had to indicate that the goods in turn were not supplied to appellants by M/s. Ridhi Sidhi is missing in investigation of the department. As against this, the appellants have produced various documentary evidences including transport receipts, proof of payments, proof of receipt of such goods in their premises and their output indicating that the goods were actually received as per accounts.
The department has not brought on record any worthwhile evidence to indicate non supply of goods from M/s. Ridhi Sidhi to the present appellants despite appellant’s having brought on record various evidence by name of transporters, their receipts, invoice and the receipt of goods as well as payments made to M/s. Ridhi Sidhi. The documentary evidence given by them therefore has not been rebutted by any credible evidence.
The stance of the department in upholding the second link in the chain of evidence is therefore purely based on presumptions and assumptions. Therefore, there is no reason to doubt the documentary evidence indicating receipt of finished material from M/s. Ridhi Sidhi. The same has also been left incomplete due to non-recording of statements of proprietor/director/authorised person of M/s. Ridhi Sidhi and also because of refusal of the adjudicating authority below to allow cross examination to afford opportunity to the present appellant who desired the same for their defence. Cumulatively department has failed to establish a case against the appellants making them eligible for relief.
The impugned order is set aside - appeal allowed.
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