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Central Excise - Case Laws
Showing 461 to 480 of 81317 Records
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2024 (8) TMI 200
Recovery of rebate of duty - eligibility to claim rebate on portion of the value which pertains to the special packing more so when the packing is done overseas - excess payment of duty on the value of additional protective packing in order to avail the rebate of the duty paid in a wrongful manner and the wrongfully claimed rebate - Rule 18 of the Central Excise Rules, 2002 - time limitation - penalties.
HELD THAT:- On going through the provisions of Rule 18, it appears that there is no ambiguity in the Rule in saying that rebate shall be sanctioned on the “duty paid” and not on the “duty payable”. Moreover, there is no distinction made in Section 4 to suggest that expenditure incurred by persons other than the manufacturer/ exporter shall not be included in the assessable value. A perusal of the above indicates that the price paid or payable by the buyer would become the transaction value notwithstanding the fact that the expenditure on such payment is borne by the assessee or somebody else - as the orders sanctioning rebate is not challenged, any demand under Section 11A cannot be sustained.
Time Limitation - HELD THAT:- The appellants have taken a plea that the demand is time barred; Revenue has not put forth any evidence to show that the appellants have indulged in any omission or commission of suppression of fact, mis-statement, collusion etc. with intent to evade payment of duty other than making a bald statement to the effect that the assessee was under self-assessment regime and the fact of over-valuation was not detectable but for the investigation. It is found that the reasoning given by the Revenue is not acceptable as the Department while sanctioning rebates over a period of time had the opportunity to verify the claims of the appellant and to call for documents, if required - it is not open for them to invoke extended period.
Penalties - HELD THAT:- The penalties imposed on the appellants, their CFO and DGM are also not maintainable.
The impugned order is not sustainable both on merits and limitation - Appeal allowed.
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2024 (8) TMI 199
Valuation - inclusion of bought-out items in the assessable value or not - extended period of limitation.
Valuation - HELD THAT:- It is seen that the appellants are supplying pre-fabricated buildings/ shelters to the Indian Army as per the purchase order place on them; however, the appellants are not manufacturing all the items required; some items they are procuring from outside and supplying the same along with the items manufactured by them which are basically steel structures. It is not the case of the respondents that the said bought-out items are supplied by them as per the requirement of the Indian Army; it is also not the case that these items are only accessories of the items supplied by them and are not essential parts of the items supplied by them.
Records indicate that the respondents are supplied pre-fabricated buildings to the Indian Army; the invoices issued by them were for the supply of pre-fabricated buildings only and not for the items which they have claimed to have supplied.
The assessment of the items cleared by a manufacturer is to be made on the basis of what is cleared from the factory. It is evident that the appellants have supplied pre-fabricated buildings, although in a disassembled manner, valuation has to be done accordingly. Therefore, the value of the bought-out items requires to be included in the assessable value of the goods.
Extended period of limitation - HELD THAT:- Understandably, looking into the fact that the supplies being to Indian Army and some items were bought-out and sent along with the goods manufactured by the respondents, it is possible that the respondents entertained a belief that the they are not required to include the value of bought-out items in the assessable value of the impugned goods. It has been held by the Tribunal that when a case is made out of audit proceedings, extended period cannot be invoked. Accordingly, the extended period cannot be invoked in the instant case and duty requires to be confirmed for normal period.
The duty confirmed for the extended period set aside - the duty for the normal period is confirmed - penalty imposed under Section 11AC is set aside - appeal allowed in part.
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2024 (8) TMI 153
Recovery of rebate already sanctioned on exported goods - rejection of claims of rebate which were pending for disposal - improper availment of CENVAT Credit - fake invoices - grey fabrics were never supplied by the dealers / manufacturers and only central excise invoices indicating duty payment were sent to the processors without supply of the goods - HELD THAT:- It would be germane to refer to the findings arrived at by the Revisional Authority on the basis of the records pertaining to the role of the petitioners which in no uncertain terms implicates the petitioners for the fraud which was detected during the course of the investigation for supply of the grey fabrics without there being any existent manufacturers and only paper invoices were issued without payment of excise duty. It is also revealed during the findings recorded by the Revisional Authority to the effect that the goods which were even provided to the processors by the petitioners which was purchased from the suppliers of the grey fabrics were not the same goods on which the CENVAT Credit was reversed later on by the processors.
In case of Diwan Brothers [2014 (9) TMI 147 - GUJARAT HIGH COURT], this Court did not grant the benefit of rebate on export on the ground that it was not proved that the supplier of the goods paid the duty on the very goods which came to be supplied and accordingly, held 'Under the circumstances, unless and until the same is established the case of the petitioner cannot be considered. In the present case as such it is found that the transactions between the petitioner and its supplier (M/s. Universal Textiles) were found to be fake. Even otherwise it is required to be noted that as such it is pointed out that M/s. Mamta Silk Mills Pvt. Ltd. has demanded the refund of the said duty in view of the subsequent proceedings initiated by it. Under the circumstances, on the aforesaid ground, the petitioner shall not be entitled to the rebate claim.'
Thus, no interference is called for in the impugned order passed by the Revisional Authority - petition dismissed.
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2024 (8) TMI 152
Refund of accumulated CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004 read with notification 27/2012-CE (NT) dated 18.6.2012 - although the claims were sanctioned after being verified by the Range Officer and also by the refund Sanctioning Authority, Revenue’s appeal was preferred based on the Post-Audit report without furnishing a copy of the same to the Appellants, which amounts to violation of natural justice.
HELD THAT:- The Commissioner, Appeals has forwarded the appeal memorandum [EA-2] filed by revenue to the appellant and granted personal hearing. It’s not clear whether the Audit note was enclosed along with the appeal memorandum or whether the allegations in the note were substantially a part of the appeal filed. However, it is felt that the appellant cannot demand a copy of the post-audit note which is an internal document of the department. The department is free to use the said note in its entirety or only in part as is felt necessary for framing its appeal. No violation of natural justice is done even if the post-audit note of the department which is a correspondence between one wing of the department and another is not supplied to the appellant. The appellant is only required to meet the averments made in the appeal arising from within the issues before the Original Authority.
A plain reading of the second proviso to Section 35A(3) of the CEA 1944 shows that if the Commissioner (Appeals) is of opinion that any duty of excise has been erroneously refunded, no order requiring the appellant to pay any duty erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in Section 11A to show cause against the proposed order.
It is found that both the issues, which are a mixed question of fact and law, were not taken up before the Ld. Commissioner Appeals. The Appellant did not file any cross-objections to the appeals nor did they appear for a personal hearing on any of the three dates given to them. The Tribunal has an inherent power, indeed a duty, to prevent the right of appeal being abused by an appellant who keeps back till the stage of appeal, points of law or fact which he could have raised before the lower authority, without showing any reason and thus places the other side at a disadvantage - due to the non-joining of the appellant in the appeal proceedings, the factual position relating to the audit note and the alleged non-issue of SCN or the view of the Commissioner Appeals on these legal issues is not available before me. In the circumstances of this case and in the interest of justice the matter merits to be remanded.
The matter remanded back to the Ld. Commissioner Appeals for a decision afresh - appeal disposed off by way of remand.
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2024 (8) TMI 151
CENVAT Credit - service tax paid on ‘Expat Cost’ - input service or not - reverse charge mechanism - jurisdiction of Learned Additional Commissioner, Chennai - I - responsibility of the jurisdictional officer with whom the ISD has registered to decide the dispute regarding eligibility or otherwise of the service tax credit that the ISD passes on to others (Appellant).
Jurisdiction of Learned Additional Commissioner, Chennai - I - responsibility of the jurisdictional officer with whom the ISD has registered to decide the dispute regarding eligibility or otherwise of the service tax credit that the ISD passes on to others (Appellant) - HELD THAT:- As regards the issue that it is the responsibility of the jurisdictional officer with whom the ISD has registered to decide the dispute regarding eligibility or otherwise of the service tax credit that the ISD has taken and proposes to pass on to others, it is seen that as per Rule 9 (5) of the Cenvat Credit Rules, 2004, the burden of proof regarding the admissibility of the CENVAT credit shall lie with the manufacturer or provider of output service taking such credit. This would be irrespective of whether the invoice is from an ISD or directly from a manufacturer / service provider. The Hon’ble Apex Court too examined a matter pertaining to the availing of credit under Section 70 of the Karnataka VAT Act, 2003, in THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [2023 (3) TMI 533 - SUPREME COURT]. The Hon’ble Court at the cost of repetition, observed and held that unless and until the purchasing dealer discharges the burden cast on him and proves the genuineness of the transaction/ purchase and sale by producing the aforesaid materials, such purchasing dealer shall not be entitled to Input Tax Credit.
A Coordinate Bench of this Tribunal in CLARIANT CHEMICALS (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2015 (10) TMI 2754 - CESTAT MUMBAI] held that it would be seen from the definition that input service distributor is neither a service provider nor a manufacturer but is only an office of the service provider or manufacturer. Since input service distributor neither manufactures the goods nor provides the service, there is no question of input service distributor liable to pay any excise duty or service tax - Since the ISD is responsible to ensure that only eligible credit is distributed as per the conditions mentioned in the Rules, he has not 'availed' of any credit for the same to be reversed or denied. It is the duty of the recipient to take only eligible credit and thereby of the jurisdictional officer of the recipient assessee to verify the credit taken and take suitable action thereon, if necessary.
Input service used in or in relation to the manufacture of final products - HELD THAT:- The input services received from the ISD should be meant for use in or in relation to the manufacture of final products being not satisfied. It is found that the list of services on which credit based on ISD invoice was taken and as to why it is not found to have been used in or in relation to the manufacture of finished products in the appellants factory where the credit has been availed, has not been dealt with in detail in the impugned order. Merely stating that revenue did not get a reply to their query from the appellant would not suffice. Moreover CBE&C, vide Circular No. 33/33/94-CX dated 4-5-1994 has clarified that there is no 1:1 correlation between input and final product under the Cenvat scheme for utilisation of credit. Hence the credit cannot be denied on assumptions and presumptions.
The demand in this case pertains to the period 2009 i.e. prior to the changes brought in by Notification No. 3/2011 dated 01/03/2011, w.e.f 01/04/2011 to the definition of ‘Input service' under Rule 2 (l) of the Cenvat Credit Rules, 2004 substituting the earlier definition and omitting the expression ‘activities relating to business'. Prior to the said date the scope of the term ‘input’ and ‘input service’ was very broad. On finding that the impugned order does not set out the actual facts for denying the credit, service credit wise or give any cogent reason for the denial and considering the broad scope of the term ‘input service’ prior to 01/04/2011, without there being a 1:1 corelation with input and output, we are inclined to accept the appellants plea.
The appellant was eligible for availing the credit and the demand for duty, interest and imposition of penalty in the impugned order cannot be sustained. The impugned order hence merits to be set aside and is so ordered - Appeal allowed.
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2024 (8) TMI 150
Distribution of credit of service tax paid to other two manufacturing units located at Pune and Gurgaon - Rule 7 of the CENVAT Credit Rules, 2004 - period April 2009 to March 2012 - HELD THAT:- There are no impediment in the appellant availing of the entire service tax credit paid on import of services for their unit at Gummidipoondi only and not distributing the credit of service tax paid on such services to their other two manufacturing units located at Pune and Gurgaon during the impugned period.
The appellant was eligible for availing the credit and the demand for duty, interest and imposition of penalty in the impugned order cannot be sustained. The impugned order hence merits to be set aside and is so ordered - appeal allowed.
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2024 (8) TMI 149
Clandestine removal - MS ingots - onus to prove on parties - violation of provisions of section 6 of the Central Excise Act, 1944 read with Rule 9 of Central Excise Rules, 2002 (CER 2002) and Rules 6, 8 and 10 of the above Rules - Penalty under Rule 26 of C.E.R. 2002 - HELD THAT:- It must be stated that it is for the department to establish by methods known to law that duty was evaded and to bring out the role of the parties alleged to have been involved in a satisfactory manner. That onus cannot be shifted to the parties against whom allegations have been made. It is only when sufficient evidence, either direct or circumstantial, in respect of its allegations was disclosed by the Revenue that adverse inference could be drawn against the noticees. In the case of imposition of penalty, it has to be proved further by revenue that the person penalised was involved in the blame worthy act with which he is charged.
On enquiry it was informed by revenue that the main noticee M/s. Vaibhav Corporation, Madurai has not filed an appeal. It is found that the impugned order is very cryptic about the part played by the appellants.
The case against all the appellants has been bunched together and disposed of in a single para on generalities without discussing the specific wrong doings in each individual case. The Department has built up the case of clandestine removal against the appellants based on the third-party documents which were recovered and statements that were recorded from the M/S. Vaibhav Mercantile without any evidence collaborating the alleged activity at the appellants end, like goods receipt register, stock register, transporters trip sheets, consignment note, VAT assessment of the appellant on the particular period, profit & Loss account/ yearly balance sheet of the appellants, statements etc. In fact, the appellants / company officials have in their statements categorically denied indulging in any unaccounted transactions. In such a situation it is difficult to sustain the charge of blame worthy conduct by the appellants merely on the assumptions and presumptions and hence no penalty could have been imposed on them. Revenue has failed to prove its case and hence the impugned order merits to be set aside.
The impugned order is set aside in as much as it relates to the appellants - appeal allowed.
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2024 (8) TMI 148
Clandestine removal - demand on the basis of electricity consumption - demand for M.S. Ingots which has been calculated on the basis of ledger pages - demand on the basis of ledger pages not recovered from residence of Directors - demand on basis of ledger pages and documents recovered from the residence - demand in respect of risers and runners alleged to have been manufactured but not accounted for based on the electricity consumption of the unit - inadmissible Cenvat credit on receipt of scrap.
Demand on the basis of electricity consumption - contention of the Appellant is that consumption of electricity varies between 900 to 1000 units per Ton - HELD THAT:- There is no corroborative evidence of procurement of any unaccounted raw material, transportation and/or seizure of any unaccounted raw material in the unit of the Appellant or during its transportation, payment trail for unaccounted raw material. No suppliers of unaccounted raw material have been identified. There was no discrepancy in stock of finished goods at the time of visit of the Officers. No finished goods were seized during their unaccounted removal. No purchasers of allegedly clandestinely cleared finished goods have been identified. No unaccounted cash has been recovered from the premises of the two units of the Appellant or from residence of Directors. Thus, allegation of clandestine removal is only on the basis of electricity consumption.
In the case of COMMISSIONER OF C. EX., MEERUT-I VERSUS RA CASTINGS PVT. LTD. [2010 (9) TMI 669 - ALLAHABAD HIGH COURT], Hon’ble Allahabad High Court, while upholding the order of the Tribunal RA CASTINGS PVT. LTD. VERSUS COMMISSIONER OF C. EX., MEERUT-I [2008 (6) TMI 197 - CESTAT NEW DELHI] held that mere electricity consumption cannot be the sole basis for determining duty liability.
The demand raised on the basis of electricity consumption is not sustainable and is set aside. Equivalent penalty on this ground is also set aside.
Demand raised on the basis of ledger pages as per table 7(A) of SCN which has been compiled on the basis of RUD 9 - HELD THAT:- The documents have been recovered from the briefcase of Shri Nitin Agarwal. It is found that in his statement, Shri Nitin Agarwal, Director has accepted these transactions. He has not retracted from his statement at any time. Further, his statement is corroborated by the said documents and vice-versa. The demand of Central Excise duty of Rs.18,32,131/- and education cess of Rs.36,643/- and imposition of equivalent penalty of Rs.18,68,774/- confirmed.
Demand on the basis of RUD-12 recovered from the briefcase of Shri Nitin Agarwal and on the basis of documents recovered from the residence of the Directors - HELD THAT:- These documents have also been accepted by Shri Nitin Agarwal in his statement. The demand of Rs.5,38,732/- and education cess of Rs.10,775/- along with imposition of equivalent penalty confirmed.
Demand in respect of clandestine removal of risers and runners which are alleged to have been clandestinely manufactured and removed but not accounted for - HELD THAT:- The three financial years for which demand has been raised are 2004-05, 2005-06 and 2006-07. The demand of risers and runners has also been raised on the basis of electricity consumption per unit. This issue has already been discussed in detail in preceding paras. Accordingly, the demand of Central Excise duty of Rs.4,13,177/- and education cess of Rs.8,264/- in respect of risers and runners set aside. Equivalent penalty of Rs.4,21,441/- is also set aside.
Demand on the basis of shortage in quantity of raw material noticed at the time of search - HELD THAT:- There is no record in panchnama of any weighment having been done. The SCN is silent on the mechanism adopted by the Officers who carried out the search to arrive at the shortage. The counsel for the Appellant also contended that the Officers have shown shortage only to book a case against the Appellant and the fact that there is no shortage in stock of any other raw material or in the stock of finished goods established the bona fides of the Appellant - the demand on alleged shortage and the equivalent penalty imposed for the alleged shortages set aside.
Demand in respect of inadmissible Cenvat credit on receipt of scrap for the years 2004-05 and 2005-06 - HELD THAT:- The demand has been raised on the allegation that waste & scrap shown to have been received by the Appellant from its sister concern Kunj Forgings Pvt. Ltd. were actually not received but were paper transactions only.
Appeal disposed off.
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2024 (8) TMI 89
Clandestine removal - shortage of goods - Whether the Tribunal is correct in holding that duty on 17943 kgs. of billets seized on 27.3.1999 is payable though the evidence recording quantity of goods and consumption thereof as well as s clearance of final product on payment of duty was available and placed on record? - HELD THAT:- In view of the concurrent findings of fact recorded by the Tribunal in respect of the 17,943 kgs of billets seized on 27.03.1999 by the respondent Department, it is not in dispute that the said billets were utilized by the appellant assessee without permission from the Competent Officer and could not have been produced at the time of inspection carried out on 04.07.2000. The CESTAT was therefore justified in holding that as per the material available on record and in absence of any evidence produced by the appellant to show that such final products manufactured by them out of the seized billets was recorded in RG-1 Register for the same was cleared under the cover of Central Excise, on payment of duty, the CESTAT was justified in confirming the demand, so far as the 17,943 kgs of billets found which were supposed to be kept in the custody of the appellant at the relevant time.
With regard to the contention raised by the appellant that the CESTAT has committed an error by not adopting the same reasonings which were given for granting relief in respect of 9247.5 kg of billets which were alleged to have been found shortage on the ground as recorded in para no.7 of the Impugned Order passed by the CESTAT, it is not tenable in view of the fact that the CESTAT has distinguished shortage of 17,943 kg of billets on the ground that the same was seized on 27.03.1999 whereas the shortage of alleged 92475 kg of billets was set aside only because in view of the finding arrived at by the CESTAT that there was no actual shortage of billets and that same was only pseudo and there was no evidence on record produced by the revenue to show that the billets are being used in the manufacture of final products clandestine.
The question of law is answered against the assessee and in favour of the revenue as there is no infirmity in the impugned order passed by the Tribunal - Appeal dismissed.
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2024 (8) TMI 88
100% EOU - Rebate claim/Refund of Cenvat credit under Rule 5 of the Cenvat Credit Rules - cash refund - transition of credit - time limitation - Revenue’s contention is that the Cenvat credit could have been transitioned as ITC under GST by filing Form TRAN-I - time limitation - HELD THAT:- It is undisputed that Cenvat credit was available to the appellant after the order of the Commissioner was passed in the remand proceedings. It is true that the appellant could have transitioned the credit under TRAN-I as ITC under GST. The appellant could also have claimed refund of this amount under Rule 5 of CCR. However, since the department had agitated the matter before the High Court, the appellant waited for the order of the High Court and only thereafter filed the refund claim. The appellant should have filed refund claim under Rule 5 of the CCR, but wrongly filed it under Rule 18 of the CER.
The undisputed legal position is that Rule 5 of the CCR provides for refund of Cenvat credit in cash in respect of the goods exported. It is a settled legal position in this case that the appellant was entitled for Cenvat credit of Rs. 76,72,000/-. Instead of claiming refund under Rule 5 of CCR, the appellant claimed it citing Rule 18 of CER. The Assistant Commissioner also wrongly sanctioned it quoting Rule 18 of CER. However, there cannot be any dispute about the fact that the appellant was entitled to refund of the said amount under Rule 5 of CCR because it pertained to exports and the appellant was a 100% EOU.
The appellant was not required to only transition the credit through TRAN-I. Section 142 (3) of the CGST Act provides for cash refund.
The appellant was entitled to refund of Cenvat credit of Rs. 76,72,000/- under Rule 5 of CCR. This substantive benefit of the appellant cannot be taken away because the appellant had quoted the wrong rule in filing its refund claim and the Assistant Commissioner also sanctioned the refund quoting the wrong rule.
Time Limitation - HELD THAT:- It was the Revenue which agitated the matter and appealed to the High Court. It is true that without waiting for the judgment of the High Court, the appellant could have filed the refund claim but the appellant waited the judgment of the High Court dated 13.12.2017 [2017 (12) TMI 1272 - DELHI HIGH COURT] and thereafter filed the refund claim on 08.01.2018. Thus, the claim was not hit by limitation.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 87
Rejection of the appellant’s application towards fixation of special rates - duty exemption on the value addition - benefit of N/N. 20/2007-CE dated 25/4/2007 - valuation of Aerated Water - Applicability of Section 4A valuation for goods falling under Chapter 22 - whether discounts and incentives will have to be removed from the total turnover to arrive at the net turnover? - HELD THAT:- N/N. 20/2007-CE dated 25/4/2007 specifies that for the goods covered under Serial No. 16, the minimum value addition shall be to the extent of 36%.This Notification grants Excise Duty exemption for this value addition of 36%. In terms of Para 3(1), if the value addition is more than 115% of this rate, the assessee can seek fixation of special rate. In this case, in order to be eligible for fixation of special rate, the value addition should be 41.4% (being 115% of 36%).
Even after considering both VAT amount and discount as not part of the turnover, still the turnover comes to Rs. 52,29,41,710, whereas the appellant/Chartered Accountant has taken the turnover as Rs. 52,85,90,385/-. Based on their figure of Rs. 52,85,90,385/-, the appellant has arrived at the figure of value addition of 91.57%. If the turnover is considered as 52,29,41,710/-, still, the value addition would be more than 85%, whereas the value addition required in this case is to the extent of 41.4%.
Rejection of turnover on account of discount - HELD THAT:- There are no merits in the arguments of the appellant. It is on record that the appellants have given the discount to the buyers in the same year and as a matter of fact the Chartered Account has removed this amount while arriving at the net turnover. Therefore, the Adjudicating Authority was correct in removing the discount/incentive amount from the total sales so as to arrive at the net sales turnover.
The goods in question ‘Aerated Water’ fall under Chapter 22. In terms of Notification No. 49/2008-CE (NT) dated 24/12/2008, the goods are subjected to Section 4A valuation. As per Section 4A Valuation, the Excise Duty is required to be paid based on the abatement given as a percentage of Retail Sale Price. Therefore, the provisions contained in Section 4 and Valuation Rule 2000 cannot be applied to arrive at the transaction value - even the Chartered Accountant has removed this amount, from the total turnover to arrive at the Valuation @ 91.57%. Hence, the appellant’s arguments for including the VAT amount for arriving at the net turnover, cannot be accepted.
Even if the turnover figure given by the appellant is different from the figure arrived at as per above calculation, still the value addition is likely to be more than 85%. Therefore, the matter remanded to the Adjudicating Authority to consider these aspects and arrive at the correct value addition. If it is found that the value addition is more than 41.4%, the request of the appellant towards fixation of special rate should be entertained.
Appeal disposed off.
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2024 (8) TMI 86
CENVAT Credit - only allegation is that suo moto recredit is not allowed under the Central Excise provisions - HELD THAT:- The refund of any duty has to be claimed through Section 11B of the CEA 1944. Hence the question of suo-moto credit/refund is not admissible as any duty paid by the appellant has to be refunded only through the process of Section 11B of the Central Excise Act, 1944.
As rightly argued by the Revenue it has been categorically held by the Hon’ble Supreme Court in the case of Mafatlal Industries [1996 (12) TMI 50 - SUPREME COURT], Sahakari Khand Udyog Mandal Ltd. [2005 (3) TMI 116 - SUPREME COURT] and by the Larger Bench in the case of BDH Industries Ltd. [2008 (7) TMI 78 - CESTAT MUMBAI-LB] that unless the duty is held to be unconstitutional there is no question of claiming refund under any other provisions other than what is specified in the Central Excise Act,1944. Therefore, the fact that the appellant should not have taken recredit of duty but should have filed a refund claim under Section 11B of the Central Excise, 1944.
Time Limitation - HELD THAT:- The refund claim could have been could have been filed at any given point of time. As rightly claimed by the appellant, there is no suppression of fact as the amount of recredit taken by the appellant was clearly shown in their cenvat credit account. There is nothing on record to show that this fact was suppressed except for stating that it came to notice of the Department only at the time of audit and the impugned order does not mention anything on suppression or invoking of proviso to Section 11A for demanding duty beyond the normal period. The Commissioner (Appeals) in the impugned order does not deal with suppression nor has given any reasons to invoke proviso to Section 11A except for confirming the demand along with interest under Section 11AB and penalty under Section 11AC. In view of the above, the demand being beyond the normal period cannot be sustained.
There were conflicting decisions which ultimately got settled by the Larger Bench, the question of suppression cannot be alleged against the appellant. Moreover, since the duty was paid under protest, there was no time limit for filing a claim of refund, that itself proves the fact that the allegation of suppression cannot be established against the appellant.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 85
100% EOU - Concessional Rate of duty for Fabrics of cotton and man-made fibres - entitlement for DTA sale under Para 9.9(b) and 9.20 of the EXIM Policy - contention of the department is that the Appellant had made clearances of their finished goods including rejects and wastes for DTA sales on the basis of 50% of the deemed export including rejects and waste for DTA sale on the basis of 50% of the deemed export value instead of 50% of the FOB value of actual physical exports - whether the appellant is eligible for benefit of exemption Notification No. 20/98 –CE as claimed by them or they were required to pay higher rate of duty under Notification No. 13/98-CE as held by Ld. Commissioner?
HELD THAT:- The Appellant during the period October 2000 to January 2001 had cleared rejects of Polyester Grey Fabrics classifiable under Chapter 52 of the CETA on payment of duty @50% of duty specified in the first schedule to the Central Excise Tariff Act, there is no dispute about the facts that the finished goods are manufactured wholly out of the indigenous raw materials and that the finished goods fall under chapter 52 and 54 as specified in the above Notification. Therefore, there are no irregularity in Appellant’s claim related to exemption notification.
The Department, however, took the view that Notification No. 13/98, dated 2-6-1998 is applicable, as per which, the Appellant was liable to pay duty at the rate of 30 per cent as this product was manufactured by 100% EOU and cleared in DTA and demanded differential duty - it is found that where there are multiple Notifications operating simultaneously in respect of the same commodity and extending different benefits, an option must be given to the assessee to choose the Notification that would be most beneficial to it.
The assessee has to be permitted to elect and choose the Notification of its choice and the Department cannot thrust a Notification of its choice upon the assessee - the view is supported by two judgments of the Supreme Court in the case of H.C.L. Limited v. Collector of Customs, New Delhi, [2001 (3) TMI 971 - SC ORDER] and Collector of Central Excise, Baroda v. Indian Petro Chemicals [1996 (12) TMI 66 - SC ORDER] where the Full Bench and Division Bench of the Supreme Court respectively have categorically confirmed the position that the option to select the benefits provided under Notification is clearly within the realm of choice of an assessee.
The appellant are entitled to the exemption under N/N. 20/98-CE. - the impugned orders are set aside - appeal allowed.
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2024 (8) TMI 12
Determination of interest on delayed refund in terms of Section 11BB of the Central Excise Act, 1944 - HELD THAT:- The learned Division Bench of this Court had directed payment of interest on the delayed refund to the respondent assessee therein within a period of two months from the date of the said order. However, it was observed that the assessee would have to furnish an undertaking that in case the revenue succeeds in the said SLP, the interest amount paid under the order so passed i.e. the order dated 22.03.2023 shall be reimbursed to the Department.
This Court, therefore, disposes of the instant writ petition by interfering with the impugned order dated 25.05.2024 - This Court directs the respondent authorities and, more particularly, the Assistant Commissioner, Central GST Division Dibrugarh to verify the amount of interest on the delayed refund of the dues of the petitioners and thereupon release the said amount within two months from the date of submission of the certified copy of this order.
Petition disposed off.
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2024 (8) TMI 11
Interpretation of statute - expression ‘capital goods cleared as such’ includes capital goods cleared as such after being used in terms of Rule 3(4) of the Cenvat Credit Rules, 2002 or not - Whether a two member bench of the Tribunal could have adopted an interpretation of the phrase ‘as such’ which is different from the interpretation given by a Larger Bench of the Tribunal in the case of MODERNOVA PLASTYLES PVT. LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2008 (10) TMI 51 - CESTAT, MUMBAI]?
HELD THAT:- The appellant has paid duty on the depreciated value of the capital goods. Thus, the duty has been discharged on depreciated value, therefore, the reversal of credit will be confined to the extent of use of capital goods i.e. value of the capital goods will be depreciated based on its use over the period of use. Keeping in view the above ruling of the High Court, as the removal cannot be treated as removed “as such”, therefore, the duty has to be discharged on the depreciated value. Accordingly, the view taken by the Customs, Excise & Service Tax Appellate Tribunal in its order dated 07.07.2011 would go contrary to the law as held in COMMISSIONER CENTRAL EXCISE COMMISSIONERATE VERSUS M/S RAGHAV ALLOYS LTD. [2010 (4) TMI 294 - PUNJAB & HARYANA HIGH COURT].
Appeal allowed.
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2024 (8) TMI 10
Entitlement to Excise Duty exemption - Marketability of the product Low Sulphur Heavy Stock (LSHS) - Department took the view that the electricity generated by the usage of LSHS, is not only used in relation to manufacture of final product but also such electricity is being used for the day to day requirement of running their township, refinery hospital, etc. - Time limitation.
HELD THAT:- On going through the Test Report given by the Quality Control Department of IOC, it is seen that they have compared the test results of the product vis-à-vis BIS standards. In many cases, the parameters are not matching. In particular, the flash point of the LSHS is given as 50oC to 64oC the minimum requirement is 76oC. Similarly the water content found is 1.5% to 5% whereas the maximum permissible limit is 1% only. When such critical parameters are not met, the product cannot be marketed/sold by the Appellant to any third party. In respect of the petroleum products unless the BIS specifications are met, it would be illegal to sell such products. Therefore, the Test Report on the face of it, clarifies that the product is not marketable.
The very same issue was before the Banglore Tribunal in the case of MANGALORE REFINERY & PETROCHEM. LTD. VERSUS C. CE & CUS., BANGALORE [2006 (4) TMI 361 - CESTAT, BANGALORE], wherein the Tribunal has held 'we are of the view that the impugned product, as such is not marketable even though it is loosely termed as LSHS. Since the impugned product is not marketable, the same is not excisable. If the impugned product is not excisable, there is no merit in the demand of duties.'
As on date, this decision of the Banglore Tribunal has not been stayed or overturned. Therefore, the issue has reached finality.
Time Limitation - HELD THAT:- All the records of the LSHS manufactured and utilized for generation of electricity which is used within the factory and used in the township etc. are very much recorded. The Department did not take any timely action on raising the demand in respect of the LSHS used for the electricity which was consumed at their township refinery, hospital etc. Therefore, the entire demand for the period January 2007 to March 2007 is time barred. Hence the confirmed demand is set aside even on account of limitation to this extent.
The appeal is allowed fully on merits and partly allowed on limitation.
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2024 (8) TMI 9
Valuation - inclusion of cost of free supply materials in the assessable value in terms of Rule 10 (A) (iii) of Central Excise Valuation Rules 2000, read with Rule 6 of the said Rules - time limitation - penalty - revenue neutrality.
Whether the demand of duty raised invoking Rule 10A (iii) read with Rule 6 of Central Excise Valuation Rules, 2000 alleging that the value of goods supplied free of cost by the principal manufacturer has to be included to arrive at the assessable value (transaction value) is legal and proper? - HELD THAT:- The provisions of Rule 10A can be applied when excisable goods are produced or manufactured by a job worker on behalf of a person and cleared to the buyer of the principal and/or cleared to a depot or a consignment agent. The intention of the Legislature was to capture the tax on the goods, on the value of the said goods when cleared to the ultimate consumers.
In the case in hand, it is found that provisions of Rule 10A (i) and (ii) does not apply as recorded correctly by the first appellate authority. Provisions of Rule 10A (iii) gets attracted as 10A(i) or (ii) does not apply. The said provision (iii) very clearly mandate that in a case not covered under clause (i) or (ii), the provisions of foregoing rules, wherever applicable shall mutatis and mutandis apply for determination of value of the excisable goods.
The provisions under Rule 10 A of Central Excise Valuation (Determination of Price of excisable goods), Rules 2000 has to be applied. In the present case, the Cenvated raw materials have been supplied free of cost to the appellant by the principal manufacturer. However, while clearing the wiring harness, the appellant has not included the value of these free materials in the assessable value - The cost of the intermediate product has been included for arriving at the assessable value by the principal manufacturer who has availed the credit on the free inputs supplied. The principal manufacturer would be eligible to avail credit of duty paid on intermediate product (wiring harness) by the appellant. The whole situation is revenue neutral.
Time Limitation - Penalty - HELD THAT:- There is no positive act of suppression established against the appellant except for the allegation that the value of free materials was not included for payment of central excise duty. These free materials have been received by the appellant from the principal manufacturer on job work challans. These being the facts, the invocation of extended period cannot sustain. For this reason, the demand raised invoking the extended period requires to be set aside - For the same reasons, the penalty imposed in respect of both show cause notices are set aside. The appellant is liable to pay duty along with interest for the normal period only.
Appeal allowed in part.
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2024 (8) TMI 8
CENVAT Credit - issuance of invoices without supply the material - retraction of statements - burden of proof - personal penalty on the partner of the appellant firm - HELD THAT:- On perusal of the material on record, and also the statements of the persons recorded during the investigation, it appears that Sh. Varinder Kumar, who is the partner of M/s Blue Star Exports, is the mastermind of issuing invoices without supply the material. Further, it is found that Sh. Varinder Kumar of M/s Blue Star Exports has admitted in his statement that they purchased prime material and sell the same in the local market on cash basis and pass the Cenvat Credit of the same to the manufacturer by changing the description of the goods and the price so as to show as “scrap”.
It is found Sh. Kuldip Singh, the partner of the appellant in his statement dated 07.09.2017 has clearly admitted that they have taken the Cenvat Credit on cuttings which are basically “scarp” whereas the manufacturer’s invoices show the description of the goods as “prime finished goods”. Regarding the taking of Cenvat Credit whether the same is correct or not, he stated that he cannot say anything.
The appellant had voluntarily debited the Cenvat Credit availed on the strength of invoices issued by M/s Blue Star Exports on 14.12.2016 i.e. before the date of statement of Sh. Kuldip Singh, partner of the appellant, recorded on 07.09.2017 and he has not retracted his statement till date which clearly shows that he has accepted his lapse - as for Rule 4 of the Cenvat Credit Rules, 2004 read with Rule 9(5) of the Cenvat Credit Rules, 2004, the burden of proof regarding the admissibility of the Cenvat Credit shall lie upon the manufacturer or provider of output service before taking such credit.
There is no infirmity in the impugned order passed by the learned Commissioner (Appeals), accordingly the same is upheld by dismissing the appeal of the appellant - appeal dismissed.
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2024 (8) TMI 7
Interest of delayed refund - relevant date for calculation of such interest - rate of interest - HELD THAT:- The dispute in the present appeal is no more res integra and is squarely covered by the decision of the Tribunal in the case of M/S. MARSHALL FOUNDRY & ENGG. PVT. LTD., M/S. MARSHALL AUTO CAST PVT. LTD., M/S. MARSHALL FOUNDRY WORKS PVT. LTD., M/S. MARSHALL CASTING LIMITED AND M/S. MARSHAL ATUT INDUSTRIES LIMITED VERSUS COMMISSIONER OF CGST, FARIDABAD [2019 (11) TMI 1269 - CESTAT CHANDIGARH] where it was held that 'appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization.'
As the issue has already been examined by the Tribunal and consistent view has been taken all along. Therefore, the Appellant is entitled to claim of interest on the delayed refund from the date of deposit till the date of its realization.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
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2024 (8) TMI 6
100% EOU - remission of duty under Section 23 of the Customs Act 1962 read with Rule 21 of the Central Excise Rules, 2002 and in terms of N/N. 22/2023-CE dated 31.03.2003 - HELD THAT:- The undisputed facts are that the goods that were imported by the appellant who is an 100% EOU and stored in the warehouse licenced under Section 58 of the Customs Act, 1962 were destroyed in a fire accident. It is an admitted fact the goods were insured only for the value of the goods and not for the duty foregone at the time of import. It is also a fact that due to unforeseen circumstances, the fire accident occurred at the factory premises and the insurance company after thorough investigation, having satisfied that the fire was caused due to unavoidable circumstance, settled the claim of insurance. The department also had drawn Mahazar and taken stock of the goods that were destroyed in the fire. The fact that the goods were not insured for duty element does not prove that there was any negligence on the part of the appellant.
The issue stands settled in as much as in similar set of facts in appellant’s own case of M/S AMERICAN POWER CONVERSION (INDIA) PVT. LTD. (now known as M/s. Schenider Electric IT Business India Pvt. Ltd.) VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, BANGALORE. [2023 (10) TMI 1422 - CESTAT BANGALORE] has held 'as per the above provisions when the Assistant/Deputy Commissioner of Customs is satisfied that the imported goods have been lost, the question of demanding duty on these goods does not arise.'
In the present case since the fire occurred due to unforeseen reasons and the goods were destroyed in the fire, the question of demanding duty does not arise. In the result, the impugned order is set aside - Appeal allowed.
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