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Central Excise - Case Laws
Showing 381 to 400 of 81813 Records
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2024 (12) TMI 526
Levy of duty on cash discount which is declared in the invoice even though in some cases the discount was not availed by the buyer and the same was not passed on - HELD THAT:- The issue in hand is no longer res integra. In view of the Hon’ble Supreme Court judgment in the case of Purolator India Limited [2015 (8) TMI 1014 - SUPREME COURT], the issue in the appellant’s own case has been decided by this Tribunal in M/S. GUJARAT GUARDIAN LTD VERSUS C.C. E-BHARUCH [2019 (8) TMI 869 - CESTAT AHMEDABAD] where it was held that 'cash discount which is not at or prior to clearance of goods being contained in agreement of sale between assessee and buyers must, therefore, be deducted from sale price in order to know the value of excisable goods at time.'
Thus, the issue is no longer res Integra, accordingly the demand of duty is not sustainable. The impugned order is set aside - appeal allowed.
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2024 (12) TMI 525
Invocation of extended period of limitation - suppression of facts - failure to obtain Central Excise registration by not observing the other statutory formalities required under Central Excise Law - CENVAT Credit demand - levy of penalty - Personal penalty imposed upon the partner.
Invocation of extended period of limitation - suppression of facts - failure to obtain Central Excise registration by not observing the other statutory formalities required under Central Excise Law - HELD THAT:- In this matter the show cause notice is dated 06.01.2016 and demand of duty pertains to the period December 2010 to June 2015. The extended period has been invoked on the ground that the Appellants had suppressed the material facts from the knowledge of the Department by not obtaining Central Excise registration and by not observing the other statutory formalities required under Central Excise Law. Thus, it appears that Appellant has deliberately and consciously suppressed material fact as to manufacture and clearances of excisable goods, contravened the provisions of Central Excise Act, 1944 and Rules, all with intent to evade payment of Central Excise Duty. However, the facts on record do not support the case of the Department for suppression.
It is found that based on books of account and records maintained by Appellants, Revenue has raised impugned demand of duty on goods manufactured and cleared. It is not disputed by the department on clearances of goods appellant also issued invoices showing appropriate VAT payment. This is not the case of the department is that appellant have not issued invoices during the disputed period. Appellants are also registered under the provisions of The Gujarat Value Added Tax Act, 2003, (VAT Act) and are assessee under the Income Tax Act, 1961 - It is not the case of the Revenue that appellants have indulged into clandestine manufacture and clearances of goods. When manufacture and clearances of goods and all other business transactions are duly recorded in the books of account and when books of account and other records are maintained by appellants, it cannot be alleged that non-payment of the duty is on account of deliberate and conscious suppression of material facts as to manufacture and clearance of excisable goods with intent to evade payment of excise duty as contemplated u/s. 11A(4) of the Act and larger period could not be invoked in such case. It is now well-settled that for invoking the proviso to Section 11A(4), there must be suppression of facts, fraud, mis-statement, etc., with an intention to evade payment of duty, the same are absent in this matter.
It is found that the appellant admittedly paid the Sales Tax/VAT on the entire transaction and also issued invoice/bills to customer for the clearance of the goods. The said invoices also account for in their books of account and department during the investigation also admitted the said facts. Therefore, the entire activity of appellant is very much on record - thus, no suppression or mis-declaration can be attributed to the appellant for invoking extended period of demand. Accordingly, the demand for longer period is not sustainable.
CENVAT Credit demand - HELD THAT:- Cenvat credit was availed in the month of September, 2015 and the same was also reversed in the month of September 2015 by the appellant as evident from the ER-1 return for the month of September, 2015. Appellant had taken the credit, they never utilized it and when the irregularity was pointed out the credit was reversed without demur. In these circumstances, it is found that neither cenvat demand nor interest demand is sustainable and this issue is squarely covered by the judgment of this Bench in the case of PAGE APPARELS PVT. LTD. VERSUS COMMISSIONER OF C. EX., BANGALORE [2006 (9) TMI 65 - CESTAT, BANGALORE] wherein it was held that the interest would not be payable when there is no utilization of Modvat credit. Further, the Hon’ble Supreme Court in the case of COMMR. OF C. EX. & CUS. (APPEALS), AHMEDABAD VERSUS NARAYAN POLYPLAST [2004 (11) TMI 112 - SUPREME COURT] held that once the credit was reversed, it amounted to not taking the credit at all.
Levy of penalty - HELD THAT:- As the appellant had no intention to evade duty, the appellant is also not liable for penalty. Accordingly, the entire penalty involved in the present case is set aside.
Personal penalty imposed upon the partner - HELD THAT:- It is found that since there is no malafide in nonpayment of duty by the appellant’s partnership firm as discussed, question of personal penalty upon the partner under Rule 26 does not arise. Moreover, it is settled in this jurisdictional High Court of Gujarat judgments in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS JAI PRAKASH MOTWANI [2009 (1) TMI 501 - GUJARAT HIGH COURT] that in a case against partnership firm separate personal penalty on it’s partner is not justified and hence not sustainable.
Appeal disposed off.
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2024 (12) TMI 524
Request for adjournment not accepted - non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982 - Applicability of Section 35C (1A) of the Central Excise Act, 1944 - HELD THAT:- In case of ISHWARLAL MALI RATHOD VERSUS GOPAL AND ORS. [2021 (9) TMI 1301 - SUPREME COURT]condemning the practice of adjournments sought mechanically and allowed by the Courts/Tribunal’s Hon’ble Supreme Court has observed 'the court shall be very slow in granting adjournments and as observed hereinabove they shall not grant repeated adjournments in routine manner. Time has now come to change the work culture and get out of the adjournment culture so that confidence and trust put by the litigants in the Justice delivery system is not shaken and Rule of Law is maintained.'
There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - The Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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2024 (12) TMI 523
Maintainability of petition - non-compliance of the statutory requirement of making the pre-deposit - failure to remove defects in the appeal - HELD THAT:- It would be seen from a bare perusal of section 35F of the Central Excise that after August 06, 2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 35F on August 06, 2014 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue.
The Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Others [2011 (3) TMI 1478 - SUPREME COURT], examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statute confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act.
The appellant has not made the pre-deposit. In view of the aforesaid decisions of the Supreme Court, the Delhi High Court and the Madhya Pradesh High Court, it is not possible to permit the appellant to maintain the appeal without making the required pre-deposit.
Appeal dismissed.
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2024 (12) TMI 467
Process amounting to manufacture or not - activity of building body structures of buses on the chassis - to be classified under CETH 8707 of the Central Excise Tariff Act, 1985? - error in issuance of SCN - Availament of CENVAT Credit - Exemption under N/N. 12/2012-CE dated 17.03.2012 under Sr. No. 276.
Error in issuance of SCN - HELD THAT:- It is found that there is a serious error in the entire issuance of show cause notice as well as passing of adjudication order in as much as the show cause notice ignoring the chapter Note of chapter 87, the vehicle was proposed to be classified under chapter 8707, on top of that the adjudicating authority has travelled beyond the scope of show cause notice and classified the motor vehicle not only one particular chapter heading but under chapter heading 8703 or 8704. Therefore, firstly the adjudication order travels beyond the scope of show cause notice. Secondly, the adjudicating authority is also not confirmed that whether the motor vehicle will fall under chapter 8703 or 8704. Therefore, on this basis itself, the entire adjudication proceeding is vitiated.
Classification of goods - HELD THAT:- Chapter 8703 is in respect of the passenger vehicle having sitting capacity of not exceeding 10 persons and chapter heading 8704 is for the motor vehicle for transport of goods - In the present case the motor vehicle manufactured by the appellant is having sitting capacity of 41 passenger. Therefore, it is neither classifiable under 8703 nor 8704. On this basis itself demand is not sustainable - From the invoice in respect of purchase of chassis by the appellant’s client, it is clear that the excise duty has been paid on the chassis.
Availament of CENVAT Credit - Exemption under N/N. 12/2012-CE dated 17.03.2012 under Sr. No. 276 - HELD THAT:- As regard the condition that Cenvat credit of such chassis is not availed by the manufacturer of motor vehicle, it is an admitted fact that appellant is neither registered with Central Excise nor paying any Excise Duty, Therefore there is no question of availment of Cenvat Credit either on the inputs or any other material used in the manufacture of such motor vehicle. With this fact, the conditions of the notification also stands scrupulously complied with. Therefore, the motor vehicle manufactured by the appellant is exempted under the aforesaid notification. Therefore, on this merit also the demand is not sustainable.
Thus, the appellant are not liable to pay Excise duty on the motor vehicle manufactured by them on the chassis supplied by their client, who is other than the manufacturer of a chassis manufacture. Accordingly, the impugned orders are not sustainable. Hence the same are set aside - appeal allowed.
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2024 (12) TMI 466
CENVAT Credit - denial of credit alleging that the input services in question were not received by the Paharpur unit., and therefore, it cannot be said that the input services were used directly or indirectly or in or in relation to the manufacture of final goods by Paharpur unit - HELD THAT:- In appellant’s own case [2024 (6) TMI 761 - CESTAT KOLKATA], this Tribunal has observed that 'For the period from 01.04.2012 to 31.03.2013, the appellants have claimed that they have taken the credit for the Service Tax paid by the Head Office for the services rendered to their Paharpur unit only. Thus the conditions set w.e.f. 01.04.2012 under Rule 7 of the Cenvat Credit Rules also have been fulfilled. However, without going into the factual details to ascertain this claim of the appellant, since we have already observed above that the proceedings are not sustainable on account of lack of jurisdiction, we hold that the confirmed demand in respect of the period April 2012 to March 2013 is also liable to be set aside on this count itself and we do so.'
As the issue has already been settled in favour of the appellant in their own case for the earlier period, therefore, the issue is no more res integra. Therefore, the proceedings against the appellant are not sustainable as the appellant has availed the Cenvat credit on the invoices issued by the I.S.D.(HO) without challenging at the end of the I.S.D.(HO).
There are no merit in the impugned orders, the same are set aside - appeal allowed.
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2024 (12) TMI 465
Valuation u/s 4 of the Central Excise Act, 1944 - related party transaction - additional discount of 8-10% given by the appellant to JEPL was a genuine discount or was “Commission” being given the colour of discount in the invoices to suppress the value to this extent of 8-10% - whole demand confirmed on the basis of list price whereas the discounts of 45% which have been passed on by the JEPL to their customers were never in dispute and these facts are on record in the show cause notice - HELD THAT:- The real nature of dispute as raised by the Revenue is limited to the contents as given in para 1.1 of the Revenue’s appeal filed with the Tribunal. Whether the extra discount passed on to JEPL in their invoices is a part of “trade discount” or is a “Commission”.
It is clear from the judgment in SESHASAYEE PAPER AND BOARDS LTD. Versus COLLECTOR OF C. EX. [1990 (2) TMI 52 - SUPREME COURT] that wherever the invoice is issued by the assessee showing two separate discounts in the invoice in whatever name they may be called one payable to the Indentor/ Distributor/ Dealer and other payable to the purchaser whose name is mentioned in the invoice itself, the discount payable to the Indentor/ Distributor/ Dealer is to be considered as a “Commission” and will not be entitled for an admissible deduction. But when the Indentor/ Distributor/ Dealer purchases in his own account, such a discount mentioned on the invoice will be considered as a normal discount and there can be no objection to the discount given to him and such discount need not be the same as passed on to the other purchasers.
The law does not require the same to be as the Indentor/ Distributor/ Dealer constitutes a separate class of buyers and there can be different prices for the separate class of buyers - it is further observed that the impugned order has misapplied the ratio of the Board’s Circular 354/81/2000-TRU dated 20.06.2000 in as much as the scope of the Circular is between the seller and the buyer i.e. “it must be established that the discount of a given transaction has actually been passed on to the buyer of the goods." Here in the facts of the case the buyer is JEPL and not their subsequent buyers as has been held in the impugned order. As no flow-back of money has been alleged in the impugned order between the appellant and the JEPL, the trade discount mentioned in the invoices is considered to be an admissible discount in the normal business transactions.
The 55% discount (including additional 8-10% given in excess of the other buyers) passed on by the Appellant to JEPL for their own purchases is entitled for an admissible deduction on account of trade discount and cannot be considered as a “Commission”.
The impugned order is set aside - appeal allowed.
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2024 (12) TMI 464
CENVAT credit in respect of service of construction of silos for storage of clinker, fly ash silo /handling system and conveying and feeding system etc for cement plant - cenvat credit in respect of hotel accommodation service - denial of cenvat credit on the ground that the service involving fabrication, erection, commissioning and installation of fly ash silo/handling system, clinker silo, conveying and feeding system etc. for cement plant has no connection directly or indirectly related to the manufacture of final product or clearance of final product up to the place of removal.
Credit of Rs. 54,73,269/- which is in respect of construction of silos for storage of clinkers etc - HELD THAT:- The period involved is 2010-2011 to 2013-2014, in this regard the learned counsel pointed out that out of credit of Rs 54,73,269/-. the credit of Rs.51,27,194/- pertains to the period prior to 01.04.2011. When this be so, prior to 01.04.2011 no service was excluded from the definition of input service under Rule 2 (l) of Cenvat Credit Rules, 2004. Moreover, the construction of silos and erection, commissioning and installation thereof is directly used in or in relation to manufacture of final product as the said silos are used for storage of clinkers which is used in the manufacture of final product. Therefore, on one hand the said service is directly covered under the main clause of the definition of input service and on the other hand the exclusion if any applicable, it is only with effect from 01.04.2011. Therefore, the cenvat credit in respect of 51,27,194/- cannot be disputed.
Credit is related to storage of raw material and the storage - to be included in the input services or not - HELD THAT:- The appellant’s submission agreed upon that there is no dispute that the silos are used in the storage of clinker therefore for this reason also credit is clearly admissible and the same will not fall under the exclusion clause even after 01.04.2011. It is also found that for the period 2010-2011, 2013-2014, the show cause notice was issued on 28.07.2014 covering the extended period.
It is found that firstly the issue involved is of interpretation of definition of input service and appellant have been filing regularly their ER-1 returns wherein the availment of credit was declared. Therefore, there is no suppression of fact on the part of the appellant. Accordingly, apart from the merit, the demand for the extended period is not sustainable on the ground of time bar also.
Cenvat credit in respect of hotel accommodation service - HELD THAT:- On the same issue in the appellant’s own case this tribunal has allowed the cenvat credit on hotel accommodation service in M/S. SHREE DIGVIJAY CEMENT COMPANY LTD. VERSUS C.C.C & S. T-RAJKOT [2019 (3) TMI 1842 - CESTAT AHMEDABAD].
The appellants are correctly and legally entitled for cenvat credit in respect of construction service, erection, commissioning, installation of silos, handling system and also hotel accommodation service. - the impugned order set aside - appeal allowed.
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2024 (12) TMI 406
Denial of benefit of exemption N/N. 67/1995-C.E. dated 16-03-1995 as amended - Short physical removal of goods - Revenue was of the view that though there was no physical removal of goods, the factum of sale indicates a transfer of ownership of the goods and that certainly amounted to nothing short of physical removal of goods and therefore the appellant ought to have paid the duty along with applicable interest - HELD THAT:- In the instant case when the Appellant manufactured the tools, they attract the levy of excise duty. Be that as it may, since the tools are not removed and are used within the factory, in view of the explanation appended to Rule 5, the date when such tools are issued for use within the factory, becomes the date of removal of such tools by virtue of the explanation to Rule 5, thereby giving rise to the requirement to discharge the duty liability thereupon.
The Central Government has, in exercise of the powers conferred by sub-section (1) of Section 5A, being satisfied that it is necessary in the public interest so to do, exempted, inter-alia, capital goods as defined in Cenvat Credit Rules, 2002 manufactured in a factory and used within the factory of production by way of the notification No.67/95-CE dated 16-03-1995 as amended. It is the benefit of this notification to which the appellant has staked claim. Since the said notification providing for exemption from duty is a beneficial exemption that the Central Government has notified in public interest, we find that the claim for exemption made by the appellant in respect of the tools manufactured in the factory and used within the factory is tenable, given that admittedly there is no physical removal of the said tools from the factory.
The appellant is entitled to the benefit of the notification No.67/95 dated 16-03-1995 as amended, as claimed and the demands of duty, appropriate interest and penalties imposed by the original authority as upheld by the learned appellate authority, are untenable. Having found that the appellant herein has succeeded on merits, there is no necessity to examine the claim of limitation raised and have not done so.
The impugned order is set aside - appeal allowed.
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2024 (12) TMI 405
100% EOU - rejection of refund claim - invocation of Section 3(b)(ii) ibid r/w Rule 17 of the Central Excise Rules, 2002, indicating that education cess and other cess would be chargeable again on the aggregate duties of customs, even though these were paid by the appellant under protest - HELD THAT:- The issue is no more res integra since the very same issue has been addressed to and answered in favour of the taxpayer by the Larger Bench of the Tribunal in the case of KUMAR ARCH TECH PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II [2013 (4) TMI 482 - CESTAT NEW DELHI - LB], which order has in fact been followed by this very Bench in the case of M/S. SKM EGG PRODUCTS EXPORT (INDIA) LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, ANAIMEDU, SALEM [2024 (6) TMI 1173 - CESTAT CHENNAI]. In the said order, this Bench has referred to the findings at para 5 of the Larger Bench order and held that the impugned order is not in accordance with law.
The impugned order cannot sustain for which reason the same is set aside - Appeal allowed.
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2024 (12) TMI 404
Eligibility to avail and utilize the input service credit - appellant is not a manufacturing unit - Availment of credit on the strength of the invoices issued for distribution of service tax credit - HELD THAT:- The matter is no longer res-integra as in the case of Sweety Industries vs. CCE &C-Anand [2024 (2) TMI 768 - CESTAT AHMEDABAD] has held that Input Service Distributor is also entitled to distribute Cenvat credit of various input services to its job work units.
The impugned order-in-original is devoid of any merits therefore, we set-aside the same. The appeal is accordingly, allowed.
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2024 (12) TMI 403
Valuation of Excise Duty - inclusion of freight charges collected from customers (shown separately in Invoice) in the course of sale of excisable goods, in the assessable value for the purpose of valuation under Section 4 of Central Excise Act, 1944 - HELD THAT:- From the invoice, it can be seen that the freight amount has been shown separately and the nature of supply is ex-factory supply. Therefore, the freight is not includable in the assessable value in terms of Rule 5 of Central Excise Valuation Rules 2000.
From Rule 5, it is clear that when freight is shown separately in the invoice, the same is not includable in the assessable value. Therefore, the fact of the present case is directly covered by the condition for exclusion of freight provided in Rule 5 of Central Excise Valuation Rules, 2000. Therefore, the freight in the fact of the present case is not includable in the assessable value.
The demand is not sustainable. Hence the impugned orders are set aside. Appeals are allowed.
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2024 (12) TMI 402
Irregular availment of Cenvat Credit of education cess and secondary and higher education cess on CVD which was debited from DEPB - It is the case of the Revenue that the exemption notification allow Cenvat Credit of CVD leviable under Section 3 of Custom Tariff Act but does not allow the credit of EC/SHEC on such CVD - HELD THAT:- The said issue has been dealt by this Tribunal in the case of M/S. LASER SHAVING (I) P. LTD. VERSUS CCE, HYDERABAD [2016 (6) TMI 868 - CESTAT HYDERABAD] wherein it was held that 'the contention of the appellants that Education Cess and Secondary & Higher Education Cess payable on that part of CVD which is equal to the basic excise duty is a part of CVD itself is not without substance.'
As issue is squarely covered by the decision of Laser Shaving (I) P. Ltd. (Supra) therefore, it is held that the Respondent is entitled to avail Cenvat Credit of additional duty quantified in respect of duty of Excise levied under different enactments is available is terms of Rule 3(7) of Cenvat Credit Rules, 2004 read with condition No. 6 of Notification No. 85/2005 Custom dated 4th October, 2005. As Rule 3(7) of the Cenvat Credit Rules specifically covers of CVD quantifies with respect to EC & SHEC levied under Section 93 and Section 138 of the Finance Act, 2004 and Finance Act, 2007 respectively.
Respondent has correctly taken the Cenvat Credit of Education Cess and Secondary Higher Education Cess on the imported goods in question. Therefore, there are no infirmity in the impugned order. The same is upheld and the appeal filed by the Revenue is dismissed.
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2024 (12) TMI 348
Refund of excess duty paid inadvertently for the months of February and March 2013 at the time of clearance from their factory gate to five institutional buyers - appellant has not produced evidence to prove that the tax element has not been passed on to the buyers - HELD THAT:- While it is true that new evidence is normally not allowed at the appeal stage, the C.A.’s statement is only a summation of the details in the appellants record already submitted to the department. Its use will only help answer the query’s raised. In fact it is a department prescribed document for the sanction of refunds.
Further what the appellant is claiming is only a double payment of excise duty which could easily have been verified from the invoices and the price agreed for sale, to the institution buyers. The appellants claim that since the excise duty alone was paid for the second time at the factory gate there was no mention about the exact quantum of other taxes viz., VAT, Additional. Tax, Octroi since no such deduction was being claimed from the cum-duty price and these taxes were being paid only on clearance by their C&F agents to the consumers, is also plausible and easily verifiable - The buyers having agreed to a pre-determined cum-duty price the chance of passing on the excise duty to them is remote. Denying substantive benefits on technical grounds needs to be avoided.
This being so the impugned order is set aside and the matter is remanded to the Original Authority for a decision afresh on the refund claim after taking into consideration all the documents submitted by the appellant including the CA’s statement and reconciliation sheet / statement - appeal disposed off by way of remand.
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2024 (12) TMI 347
Disallowance of CENVAT credit - input services - service received at premises other than the registered premises - recovery with interest and penalty - HELD THAT:- This issue is no longer res-integra.
In the case of M/S. ORIENTAL INSURANCE COMPANY LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, LTU, NEW DELHI [2023 (6) TMI 646 - CESTAT NEW DELHI] held that registration of premises with service tax department is not a condition precedent for claiming CENVAT credit of input services.
Once the requirement of rule 4A of the 1994 Rules and rule 9 of the 2004 Rules are satisfied, the benefit of CENVAT credit could not have been denied. Thus, the impugned holding to contrary cannot be justified.
Appeal is allowed.
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2024 (12) TMI 346
Process amounting to manufacture or not - process of slitting and cutting jumbo paper rolls into smaller rolls - admissibility of CENVAT Credit availed by the appellants in both Unit-I and Unit-II - Applicability of Section 11D of the Central Excise Act, 1944 regarding the collection of excise duty.
Whether the appellant’s activity of slitting/cutting jumbo paper rolls into small paper rolls amounts to manufacture or not? - HELD THAT:- In this case, two units under the same management are involved and there is no dispute regarding the use of paper within Unit-I for slitting, lamination, printing and heat-sealing coating. Similarly, there is no dispute regarding process undertaken at Unit-II with regard to slitted paper and payment of duty thereon. Further, there is no dispute regarding process of heat-sealing coating at Unit-I after receipt from Unit-II, payment of duty from Unit-I and CENVAT Credit thereon.
The process of slitting of papers in the present case amounts to manufacture since the paper in Unit-II cannot be used in the form it is received from Unit-I because it is required to be slit to the required size to fit into the machines of Unit-II. Further, there is a substantial value addition of raw material and huge investments were made in plant and machinery for slitting and after the process of slitting and cutting is completed, a new and distinct product emerges to which the starting material is not capable of being put or used. It is also found that the Department has never raised any concerns regarding the duty paid on final slit paper.
Thus, it is a settled law that once duty on the final products has been accepted by the Department, CENVAT Credit is not deniable even if the activity does not amount to manufacture.
CENVAT Credit availed by the appellants in both Unit-I and Unit-II - HELD THAT:- Once the Department has accepted the duty of the final products and has not raised the objection, then in that case, the CENVAT Credit is not deniable even if the activity does not amount to manufacture in view of the various decisions relied upon the appellants.
Applicability of Section 11D of the Central Excise Act, 1944 regarding the collection of excise duty - HELD THAT:- The first condition to invoke Section 11D of the Central Excise Act, 1944 by the Department to demand is not applicable in present case because Section 11D is applicable on the person who is liable to pay duty under Central Excise Act, 1944, whereas in the present case, in the impugned order itself, it has been held that the appellants were not liable to pay duty on slitted paper, therefore, this condition is not satisfied. Second condition that Section 11D is applicable when a person has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under Central Excise Act, 1944; whereas, in the present matter, it is not a case that the appellants have collected any amount in excess of duty assessed or determined. Hence this condition is also not met. The third condition that Section 11D is applicable when the said person has collected amounts from the ‘buyer' of such goods; whereas, in the present case, there is no distinct seller and/or buyer. It is a case of stock transfer to Unit-II within the same entity and there is no sale and consequently there is no ‘buyer’ from whom amount has been collected representing excise duty. Therefore, this condition is also not satisfied. Accordingly, demand made under Section 11D of Central Excise Act, 1944 is liable to be dropped.
The impugned orders are not sustainable in law, therefore, set aside - appeal allowed.
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2024 (12) TMI 345
Determination of the Retail Price - Central Excise duty on the Retail Price declared on the goods less such abatement - goods were sold at prices higher than the Retail Price declared on the goods - HELD THAT:- It is seen that Rule 4 nowhere provides for adopting a MRP indicated in a Price List but requires ascertainment of the RSP which is either declared on identical goods removed within a period of one month or the RSP in the retail market at which the goods are actually sold at or about the time of removal of such goods from the place of manufacture. The said Price List relied upon in the notice, itself under Terms and Conditions, at Sr. No.7 mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch. The same therefore does not represent the actual retail price at which the goods are sold. Moreover, the requirement is to ascertain the actual RSP at or about the time of removal of the goods to be valued. Therefore, a Price list of Feb 2005 cannot in any event be uniformly applied through out the period from 2005 to 2009.
It is settled law as laid down in CCE v Bell Granito Ceramics Ltd [2008 (11) TMI 99 - CESTAT, AHMEDABAD], that there is no requirement under Section 4A that the MRP on each package of goods has to be identical. Accordingly, a manufacturer can affix different MRPs on different packages of the same kind of goods. If the MRP on a given package has to be rejected under Section 4A (4) and redetermined under Rule 4 of the said Rules of 2008, then with regard to every package, it would be necessary to ascertain the actual RSP in the retail market at or about the time of removal of the package in question. An MRP indicated in a Price list of Feb 2005, which itself mentions that Prices therein are subject to revision without prior notice and ruling prices will be charged at the time of dispatch cannot be applied across the board for clearances made from 2005 to 2009.
It is further noticed that the Larger Bench of this tribunal in the case of Ocean Ceramics Ltd v CCE [2024 (1) TMI 1280 - CESTAT AHMEDABAD - LB], has held that in absence of the manner of ascertainment of RSP having being prescribed by Rules under Section 4A (4) for the period prior to 1-3-2008, it is not open to the adjudicating authority to ascertain the RSP for the period prior to 1-3-2008 and that the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules 2008 notified with effect from 1-3-2008 cannot apply retrospectively for the period prior to 1-3-2008, in that view, we find that the demand for the period prior to 1-3-2008 based on the ascertainment done in the impugned Order-in-Original is in any way not tenable.
The impugned Order-In-Original cannot be sustained and is set aside - appeal allowed.
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2024 (12) TMI 344
Trading of the goods or manufacturing activity - Revenue contended that the Appellant had actually undertaken the manufacturing activity by themselves and created a network of job workers to create an impression that the goods were manufactured by job workers - entire case has been built upon by the department on the basis of the statements recorded from the job workers - invocation of extended period of limitation.
Whether the appellant-company is the manufacturer or the job worker, who has undertaken the activities as per the designs supplied by the Railways, on the raw materials supplied by the appellant, is the actual manufacturer?
HELD THAT:- It is observed that the activities such as quality testing, labelling/branding etc may or may not amounts to 'manufacture'. It depends upon the facts and circumstances of each case. However, before going into the question whether quality testing, labelling/branding etc amounts to manufacture or not it must be established that the appellant has actually undertaken such activities in their factory premises.
In the present case, it is observed that the appellant did not have any manufacturing facility in their premises; there was no machinery found during the course of search; no raw material or manufactured goods were found in the process of manufacturing at the time of search; there was no manpower employed by them for undertaking the manufacturing process; the monthly electricity charges of the factory was within Rs.4,000/- to Rs.5,000/- which evidences that no manufacturing activity was undertaken in the factory. Thus, we observe that the evidences available on record does not support the conclusion arrived at by the adjudicating authority that the appellant has undertaken some activity amounting to 'manufacture' in their premises.
The adjudicating authority has not produced any other evidence to substantiate the allegation that the appellant has actually carried out testing, branding etc in their premises. In the absence of any such evidence, it cannot be presumed that the appellant has undertaken these activities after receiving the goods from the job workers.
Further, it is observed that the levy of Central Excise Duty is on the activity of “manufacture”, but in the Show Cause Notice it is nowhere mentioned as to what item had been manufactured and as to what quantity of the goods had been manufactured by them. It is observed that without identification and quantification of the goods, the Show Cause Notice issued is ex-facie bad in law.
The evidence available on record does not indicate that the appellant has undertaken any of the activities amounting to 'manufacture' in their factory premises. Accordingly, the demand of central excise duty confirmed in the impugned order set aside. Since, the demand of duty is not sustainable, the question of demanding interest or imposing penalty on the appellant-company does not arise.
Invocation of extended period of limitation to demand central excise duty - HELD THAT:- Since, there is no suppression of facts with intention to evade the tax established in this case, raising the demand by invoking extended period of limitation again is legally not sustainable. It is found that this view has been held by the Hon’ble Supreme Court in the NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT] wherein it has been categorically held that once a demand has been raised for any issue by invoking the extended period of limitation, then another demand cannot be raised again by invoking the extended period on the same issue for a subsequent period - the demands confirmed in the impugned order by invoking the extended period of limitation is not sustainable.
Since there is no corroborative evidence brought on record by the respondent to substantiate the allegation that the Appellant are the actual manufacturers of the goods in question, it is held that the job workers are the actual manufacturers of the goods in this case, as has been claimed by the Appellant.
The demand of Central Excise duty from the Appellant-company is not sustainable in law. Since the demand itself is not sustainable, the question of demanding interest or imposing penalty on the Appellant-company under Section 11AC of the Central Excise Act, 1944 or under Rule 25(1)(c) of the Central Excise Rules, 2002 does not arise - the demand of interest and penalties imposed on the Appellant-company are set aside.
Penalty imposed on the Partner of the Appellant-company - HELD THAT:- Penalty has been imposed on the ground that the Partner played a role in the commission of the alleged offence. Since it is already held that the demand of duty on the activity undertaken by the Appellant is not sustainable, the role of the appellant in commission of the alleged offence is not established. Accordingly, the penalty imposed on the Partner viz. Shri Sudipta Dey under Rule 26(1) of the Central Excise Rules, 2002 is also set aside.
The demands confirmed in the impugned order are set aside and the appeals filed by both the Appellants are allowed
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2024 (12) TMI 343
Clandestine removal - improper accountal of excess stock - Recovery of CENVAT Credit with interest and penalty - HELD THAT:- Appellant 1 has through well devised mechanism by way of issuance documents in name of non existent firms namely,- M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M's Aamir Enterprises, was clandestinely clearing their finished goods to their customers located across the country in Maharastra, Karnataka etc. Against the goods cleared against invoices made in name of the fictitious companies they were receiving the payment in cash. Where they were clearing the goods on the invoices issued in their name they were receiving the payment by cheque.
Undisputedly the searches were conducted at various location including the factory premises of the Appellant 1, and various residential premises owned by them and their Directors i.e. Appellant 2 and Appellant 3. Searches were also conducted at the premises of the agent of transporter booking the consignments of appellant 1 and also at the premises of the transporter namely Ghatg Patil Transport Company.
The document issued in the name of fake entity were accompanied with the transport documents prepared by the Ghatge Patil Transport Company, and there were no transport documents in respect of the invoices issued in name of Appellant 1. Investigations revealed that the invoices were issued in the name of appellant were to cover up the transport of the goods to the godown of transporter and were taken back by the booking agent, Appellant 4 and from the transporter godown goods were transported on the documents issued in the name of fake company along with the transport documents prepared by the transporter M/s Ghatge Patil Transport Company.
It is evident that the all the threads necessary to establish the case of clandestine clearance have been investigated and interwoven to unearth the scheme of clandestine clearance adopted by the Appellant 1, Appellant 2, Appellant 3, Appellant 4, Appellant 5 and Appellant 6. Each of the appellant was fully aware of the scheme and was playing the role assigned to him. It is also interesting to note that appellant during the period even after search conducted in his premises on 11/12.04.2012, continued with his activity of clandestine clearance. The truck cleared from his premises on 17.04.2013 and intercepted by the officers clearly establishes that Appellants are habitual offenders - Transporter has admitted the factum of transport of the clandestinely cleared goods on the basis invoices of fictitious entities and the Customers of the appellant have admitted to the receipt of the clandestinely cleared goods and fact of making payment in cash against these goods. All these aspects on the basis of the evidences have been appropriately discussed in the impugned order.
It is settled position in law that once the facts have been admitted the same need not be proved/ established again.
Appellant had asked for the cross examination of the transporter. It is found that no statement of the transporter has been relied upon. Transporter was made co-noticee in the matter and he has specifically asserted in the reply to show cause notice dated 24.03.2015 that even no statement of any of representative is recorded to find out whether involved in the transaction knowingly.
The charges of clandestine clearance of the goods resulting into evasion of Central Excise Duty, upheld - Demands in respect of shortages detected at the time of search in the premises of the appellant and admitted by them. Demands in respect of clandestinely cleared goods to various customers and also admitted by the Appellant.
Imposition of penalty on the customers of the Appellant 1, transporter and others who have not filed any appeal - HELD THAT:- For imposing the penalty Commissioner has in the impugned order discussed the role of each individual separately and have concluded that each was part of conspiracy to evade payment of Central Excise Duty and defraud the exchequer. Appellants being habitual offenders the penalties imposed also do not appear to be on higher side and are upheld.
There are no merits in the submissions made by the appellants - appeal dismissed.
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2024 (12) TMI 274
Clandestine removal of goods - evasion of duty - shortage of 3500 Kgs of copper scrap - assessee had been receiving substantial quantity of copper scrap without any bills/documents and was not entering the details of sale in the statutory records - proof beyond doubt - preponderance of probabilities - HELD THAT:- In criminal cases, the standard of proof as required to prove the charges in a criminal trial is “proof beyond doubt”, whereas, the adjudication proceedings are in the nature of civil proceedings and not criminal proceedings and therefore, the standard of proof of civil proceedings i.e. preponderance of probability is applicable in adjudication proceedings.
It is equally well settled that in adjudication proceedings to establish the charge of clandestine removal and under valuation, Revenue is not required to prove the case with mathematical precision. Such charges are to be established on the basis of “preponderance of probabilities.” However, the conclusions to be drawn are necessarily to be logical and not on the basis of presumptions and assumptions. Suspicion, howsoever grave, cannot replace the test of proof.
The mere fact that the respondent agreed to deposit the duty amount to avoid any kind of litigation, itself cannot be held to be the basis for confirming the duty demand against the respondent. CESTAT found that the case of unaccounted manufacture and clearance was built upon only sketchy evidence without concrete corroboration and whatever evidences formed basis for the case of Revenue, fell short of the minimum requirement of credible case of clandestine removal - the CESTAT conducted a meticulous exercise to examine and appreciate the evidence on record in the light of settled principles and came to a categoric finding that the case of unaccounted manufacture and clearance was built on sketchy evidence without any concrete corroboration and whatever evidence formed basis of the case of the Revenue fell short of the minimum requirement of credible case of clandestine removal.
In the absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods from the premises of the respondent, we hold that the impugned order dated 08.06.2017 passed by the CESTAT does not suffer from any serious error and does not merit interference.
The appeal is therefore dismissed.
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