|
Advanced Search Options
Central Excise - Case Laws
Showing 501 to 520 of 81323 Records
-
2024 (7) TMI 1355
Approved 100% EOU under EHTP scheme - demand of duty - eligibility for the benefit of exemption N/N. 2/95-CE dated 04.01.1995 - reducing the penalty under Section 11AC of CEA.
Whether the duty demanded by the Commissioner in the impugned order for Rs.15,19,610/- is liable to be confirmed or the original demand of Rs.2,54,01,776/- is to be confirmed as claimed by the Revenue in their appeal? - HELD THAT:- With regard to Annexures II, the observations of the Commissioner have not been countered with any evidences by the appellant except to produce the same document that was placed before the Commissioner which has been disputed - the Commissioner observed that the Range Superintendent vide his letter dated 14.07.2008 had reported that no documents were produced by the assessee to show that the items were duty-paid. It is also stated that in respect of other clearances, the same has been admitted. In view of the above, the submissions of the learned counsel that subsequently duty was paid cannot be accepted. It is a settled issue that waste and scrap are liable to duty even if it is generated out of duty-paid raw material. In view of the above, the confirmation of the demand of Rs. 11,78,778/- is upheld.
With regard to the amount confirmed under Annexure III, the learned counsel has argued that the report placed by the Superintendent only states that connected invoices duly verified but invoice date (date of removal) does not tally with the dispatch date - The assessee could not put forward any evidence to prove that the goods were properly accounted and duty was paid on clearing the same.’ In view of the above, there are no reason to disagree with the Commissioner.
Coming to the demand at Annexure VI, it is very clear that the Commissioner had accepted the report dated 31.03.2009 from the Range Officer which states that duty was paid for Serial No.1,2,6 to 10 while for Serial No. 4 and 5 duty was not paid, hence duty was confirmed only for Serial No. 4 and 5. Therefore, this demand needs to be sustained.
Whether the appellant-assessee is eligible for the benefit of exemption Notification No.2/95-CE dated 04.01.1995? - HELD THAT:- Since the clandestine removals are beyond permissible limits by the Development Commissioner, the question of extending the benefit of Notification No.2/1995-CE does not arise. Hence, the entire demand of Rs.30,39,220/- is confirmed.
Departmental appeal is partially allowed only to the extent of denying the benefit of N/N. 2/1995-CE dated 04.01.1995 to the appellant and the matter stands remanded to the original authority for re-determining the duty and with regard to penalty, to extend the benefit of Section 11AC(d) if the duty along with interest and reduced penalty is paid within the stipulated time as per law. The Revenue’s appeal stands remanded, needless to say that an opportunity of being heard may be given to the appellant.
-
2024 (7) TMI 1354
Valuation - Admissibility of cross model utilisation of incentives/discounts - whether the incentive of discounts declared for small/mid segment cars be allowed to luxury model cars i.e., Fortuner, Innova and Corolla attracting higher rate of duty? - Extended period of limitation - suppression of facts.
HELD THAT:- In Tata Motors Ltd. case [2014 (6) TMI 162 - CESTAT MUMBAI], this Tribunal held that discounts passed on by the appellant to the dealers does not satisfy the requirement of a trade discount to qualify for deduction in as much as if the discount is declared for a particular model of car, the end-user is not receiving the discount and the discount is purely arbitrary; hence, not available as an abatement from the price of the goods.
Invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The appellant has been following the said mechanism of passing incentives/discount since 2008 and no objection has been raised by the department. The issue raised only after the judgment of the Tribunal in Tata Motors Ltd.’s case by Central Excise Revenue Audit and the demand has been computed on the basis of available records; show-cause notice was issued to the appellant demanding differential duty proposing denial of said deduction from the price. Hence, there are no suppression or mis-declaration or mis-statement of facts on the part of the appellant. In absence of any suppression or mis-declaration of the facts, larger period of limitation cannot be invoked. Consequently, the demand is barred by limitation.
The impugned order is modified and appeal is allowed on the ground of limitation only.
-
2024 (7) TMI 1353
Classification of goods - process of printing, cutting and folding of a special paper and supplying the finished goods for use in the surgical glove industry - to be classified under Tariff headings 4823 9013 preferred by the department and 4817 3090 of CETA? - suppression of facts - extended period of limitation - HELD THAT:- The process of manufacture of the impugned product, is that special paper in reel form is fed into the machine where the product details and user instructions are printed on the paper and then it is cut to sizes and machine folded. The resultant end product is known as ‘surgical glove inner wrap’ or ‘surgical glove inner wallet’ by the trade. A single sheet of the inner wrap is used for wrapping both the left and right hand (pair), latex surgical / examination gloves and are marked / indicated on the exterior of the inner wrap.
The appellant has sought to classify the product under heading 4817 as a ‘wallet’. ‘Boxes, wallets and writing compendiums, of paper or paper board, containing an assortment of paper stationery’ mentioned under heading 4817 of CETA, 1985 and relied upon by the appellant, are basically in the nature of goods used to store or carry smaller items. The appellant has stated that the Merriam-Webster Dictionary defines wallet as a bag for carrying miscellaneous articles while travelling, a container that resembles a money wallet such as an usually flexible holding case fitted for carrying specific items. Therefore, a wallet is defined to be any article which is used to carry or hold any item. Since there is no definition for the term 'wallet' in the tariff, reliance can be placed on the dictionary meaning of the said word. Therefore, the product in question is clearly a wallet.
The nature and purpose of the inner wrap is to provide a sterile cover to the surgical gloves and is designed to facilitate the easy and uncontaminated wearing of the gloves by the users, who are generally in the medical profession. It is not designed to store and carry goods by hand and is open from three sides - The inner wrap is hence used as a packing and wrapping paper for surgical gloves and is appropriately classification under tariff heading 4823 9013 of CETA as determined by revenue. This being so the classification of the goods under heading 4817 3090 has correctly been rejected.
Extended period of limitation - suppression of facts or not - HELD THAT:- The issue involves the classification of a product known in the trade as ‘surgical glove inner wrap’ or ‘surgical glove inner wallet’. ‘Wallet’ figures under tariff heading 481730 of CETA, 1985. Even though, it is found that the classification of the product under the said heading is not correct due to its characteristics, the appellant could not be blamed for having thought otherwise. There is no suppression of fact that has been brought out by revenue, nor is an intention to evade payment of duty discernable. Hence the demand under the extended period of time has to fail along with the imposition of penalty.
The classification of the goods under tariff heading 4823 9013 of CETA 1985, as determined in the impugned order upheld, but the demand of duty limited to the normal period with appropriate interest - the penalty imposed is set aside - appeal allowed in part.
-
2024 (7) TMI 1312
Levy of Excise Duty - Process amounting to manufacture or not - activity of filling and marketing hydrogen gas cylinders - HELD THAT:- In the instant case, the process involved is that the gas received by the appellant through the pipeline has some accumulation of moisture and in order to remove the same from the gas, the compressor has an inbuilt system of drying the moisture. The treatment employed by the respondent-herein is oil filtration for the removal of moisture from gas by drying the inbuilt system of compressing gas into the cylinders. The said process does not amount to a manufacturing process.
There are no merit in the appeal. Hence, the appeal is dismissed.
-
2024 (7) TMI 1311
Denial of CENVAT Credit - ISD invoices issued to the appellant did not contain the particulars prescribed under Rule 4A of the Service Tax Rules, 1994 - appellant had availed credit by splitting the credit as service tax, education cess, secondary higher education cess and utilized the same - entitlement to avail the credit based on the ISD invoices as the appellant unit had not received the input services covered under the said invoices.
Splitting the credit as service tax, education cess, secondary higher education cess and utilising the same - HELD THAT:- It is found that ‘Secondary and Higher Education Cess’, has been made Cenvatable by suitably amending the Cenvat Credit Rules, 2004 vide Budgetary Notification No. 10/2007-CE (NT), whereby the credit of the education cess on excisable goods and the secondary and higher education cess on excisable goods and education cess on taxable services can be utilized, either for payment of the education cess on excisable goods or secondary and higher education cess on excisable goods or for the payment of education cess on taxable services. Hence there was no bar on service tax credit being split and utilized for paying education cess liability.
Availment of credit based on such ISD invoices as the appellant unit had not received the input services covered under the said invoices - HELD THAT:- The issue has been considered by the Hon'ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I COMMISSIONERATE VERSUS ECOF INDUSTRIES (P.) LTD. [2011 (4) TMI 560 - KARNATAKA HIGH COURT] wherein it was held that 'the assessee is entitled to distribute the Cenvat credit on the input services on its manufacturing unit or other units providing the output services. The view taken in the order in appeal that the distribution of credit is for the advertisement of the product, which is not at all manufactured at Malur Unit, therefore, cannot be accepted. The finding recorded by the Appellate Authority that the assessee is entitled to take credit only in the unit where the product is manufactured is therefore not the mandate of Rule 7 of the Cenvat Credit Rules.'
The appellant was eligible for availing the credit and the demand for duty 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.
-
2024 (7) TMI 1310
CENVAT credit on molasses used for the manufacture of rectified spirit and undenatured alcohol - department was of the view that undenatured ethyl alcohol in the form of rectified spirit, extra neutral alcohol and neutral alcohol etc. which is also manufactured in the distillery are not specified in the First Schedule to the Central Excise Tariff Act, 1985 as excisable goods - exemption of Notification No. 67/1995-CE dated 16.3.1995 on molasses used for captive consumption for manufacture of rectified spirit, undenatured alcohol.
HELD THAT:- The reason for denying the credit as well as the eligibility of exemption notification No. 67/95 is that the finished products rectified spirit, undenatured alcohol are non-excisable goods and that these cannot be treated as exempted goods as contended by the appellant. This issue stands covered by the judgment of the Hon'ble Supreme Court as reported in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S. DHARANI SUGARS AND CHEMICALS LTD. [2022 (3) TMI 274 - SC ORDER] where it was held 'We do not find any merit in the present appeal, as the respondent/assessee has enjoyed the benefit of the exemption Notification No. 67/95-C.E., dated 16-3-1995 till financial year 2005-06. The appellant-Revenue has predicated their case on the addition of the item “other” in Heading No. 22.04 made vide sub-heading 2204.90 with effect from 1-3-2005. In our opinion the aforesaid addition is not a substantive change or modification.'
The Tribunal in the case of M/S. DHARANI SUGARS & CHEMICALS LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE, TIRUNELVELI. [2024 (7) TMI 1163 - CESTAT CHENNAI] has considered the issue in detail. The view of the department as to whether rectified spirit and undenatured alcohol are not non-excisable has been considered by the Tribunal in detail, where it was held that 'The Board Circular No. 808/5/2005-CX dated 25.02.2005 was also relied. It has been clarified by Board that rectified spirit and extra neutral alcohol are covered under subheading 22 07 2000 after restructuring of the Tariff. Thus, it will be covered under Chapter 22.'
There are no ground to take a different view since the issue and facts are identical - the demand cannot sustain - appeal allowed.
-
2024 (7) TMI 1254
Method of Valuation - section 4 (on the transaction value) or under section 4A (on the RSP minus abatement)? - bulbs sold by the appellant to EESL - what should be reckoned as the RSP - it was held by CESTAT that 'The issue is found in favour of the appellant and against the Revenue, both on merits and on limitation' - HELD THAT:- There are no merit in the appeal and the same is accordingly dismissed.
-
2024 (7) TMI 1253
Levy of of the central excise duty - sale of the old machinery (sold by the appellant) as scrap - Rule 3(5A) in CENVAT Credit Rules, 2004 - eligibility of the cenvat credit of the service tax availed on outward freight under GTA services - place of removal - Extended period of limitation - penalty.
Levy of Central Excise Duty - sale of the old machinery (sold by the appellant) as scrap - Rule 3(5A) in CENVAT Credit Rules, 2004 - HELD THAT:- The machinery sold was ‘capital goods’ and the provisions of Rule 3(5A)(b) clearly provides that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on the transaction value - as observed by the Authorities below, the purchase bill and the sale bill, which are annexed along with the appeal here, do not show any correlation between the goods purchased and sold. The sale bill i.e. invoice no.180 dated 09.07.2016 do not provide any description as to the nature of the capital goods being sold. Though the appellant in the appeal has quoted the affidavit filed by Shri P.K. Mehra, Director of the appellant company to say that the said old and used machinery was sold in the year 2016 through the invoice no.180 dated 09.07.2016. However, neither the affidavit has any date nor does it specifies the period during which Shri P.K. Mehra was working as Director of the appellant company to show his bonafides as to his awareness of the sale and purchase. In any event, the appellant is liable to pay the duty in terms of the statutory provisions of Rule 3(5A)(b).
Availing the cenvat credit of service tax paid on outward freight and utilizing the same towards the payment of duty - Place of removal - HELD THAT:- The Adjudicating Authority has observed that the appellant had availed the cenvat credit of an input service in ER-I Returns for the month of August, 2014, Feb. 2015, March, 2015, April, 2015, June, 2015, July and August, 2015, however, there was no reversal entries in the ER-I Returns and the service tax payable ledger accounts. Hence, the cenvat credit on outward freight was not admissible to the appellant and is liable to be recovered under the provisions of Rule 14 of CCR, 2014. The appellant having failed to pay the central excise duty and wrongly availed the cenvat credit is liable to pay the interest under Section 11AA of the Central Excise Act, 1944.
Extended period of limitation - penalty - HELD THAT:- The cenvat credit of service tax taken by the appellant on the outward freight “beyond the place of removal” was knowingly and deliberately suppressed from the Department with intent to evade payment of duty and hence, the extended period of limitation has been rightly invoked and the penalty imposed thereon.
There are no reason to interfere with the impugned order and the same is hereby affirmed - appeal dismissed.
-
2024 (7) TMI 1252
Levy of Penalty u/r 26(2) of the Central Excise Rules, 2002 - it is alleged that the second stage dealers based in Jaipur were issuing cenvatable invoices to M/s. Amar Pratap Steel Pvt. Ltd. (main noticee) [APSPL] without delivering the goods - goods purchased from the first stage dealers and manufactured by non-existent or non-working manufacturers - HELD THAT:- In the given factual situation of the case, categorical findings have been recorded by the Commissioner (Appeals) in the case of APSPL, particularly that APSPL had duly received the goods as mentioned in the impugned invoices after making payment of duty, there is no justification in taking a contrary view on the same fact, which have been accepted by the Department and no appeal has been filed to challenge the same. In the circumstances, there is no reason to differ with the said order insofar as the appellant is concerned, who has been saddled with penalty of Rs.3,63,778/- under the Rule. When the demand in respect of the cenvat credit itself is not maintainable, there is no justification to affirm the penalty imposed on the appellant.
In the case of Drolia Electrosteel P. Ltd. [2023 (11) TMI 10 - CESTAT NEW DELHI], Learned Division Bench of this Tribunal was dealing with an identical situation, where the cenvat credit was denied and penalty was sought to be imposed on the allegations that DGCEI had investigated several manufacturers and traders including those who supplied the invoices, where the manufacturers indicated, either did not exist at all or had only supplied the documents to enable the manufacturers of the final products to take cenvat credit without actually supplying the goods.
Following the principles enunciated by the Division Bench in the case of M/s. Drolia Electrosteel P.Ltd., which is binding on me and also in the given circumstances, when the department has accepted the findings as recorded by the Commissioner (Appeals) in the order dated 11.12.2019, there is no justification to uphold the imposition of penalty on the appellant.
The impugned order, therefore, deserves to be set aside - The appeal is accordingly allowed.
-
2024 (7) TMI 1251
Valuation of goods - value adopted by the 1st appellant for payment of duty on clearance of the goods to the 2nd appellant - requirement to discharge duty under Section 4 (1) (b) of Central Excise Act, 1944 read with Rule 10A (ii) of Central Excise Valuation (Determination of Retail Price of Excisable Goods) Rules, 2000 - Extended period of limitation - penalty.
Valuation of goods - HELD THAT:- The Department has not done any inspection or verification at the premises of the 2nd appellant to conclude that further testing or repacking is being carried out on the products meant for exports. Without such investigation, the department cannot mechanically reject the consistent plea put forward by both appellants. In para 7 of the OIo No.12/2013 dated 26.4.2013 the statement given by the Senior manager of 2nd appellant (Sri Parthaarathy) is referred. It is deposed by him on 25.8.2009 before the Superintendent That their quality control department would carry out inspection of the products and then packing, palletization and shrink packing were done. As per section 2(f) of Central Excise Act, 1944, ‘manufacture’ includes any process, incidental or ancillary to the completion of a manufactured product”. Without quality control check, and inspection, the product cannot be said to be marketable. However, these aspects have not been considered by the original authority or the Commissioner (Appeals), Merely on the basis of difference in assessable value of the goods cleared by the 2nd appellant for export, the department has proceeded to issue SCN and confirm the demand.
Extended period of limitation - revenue neutrality - HELD THAT:- The situation is entirely revenue-neutral. Even if the 1st appellant discharges duty as confirmed by the Department, the 2nd appellant would be eligible to avail credit of such duty. The SCN has been issued invoking extended period alleging suppression of facts. There is no positive act of suppression established by the Department. Further, both appellants have paid duty during the disputed period. This itself would show that the 1st appellant had no intention to evade payment of duty - The entire demand falls within the extended period. The appellants succeed on the ground of limitation.
Penalty imposed under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- Since it is already found that the demand of duty on 1st appellant does not sustain, the penalty imposed on the 2nd appellant is also unwarranted. The view is supported by the fact that the 2nd appellant would be eligible to avail credit of the duty paid by the 1st appellant and is a revenue neutral situation. In such circumstances, penalty imposed on the 2nd appellant is also set aside.
-
2024 (7) TMI 1163
Exemption on molasses manufactured and cleared for captive consumption - benefit of N/N. 67/95-CE dated 16-03-1995 - eligibility for credit availed on inputs/input services / capital goods.
The department was of the view that the benefit of the Notification No.67/95 is available only when the final products suffer duty and the appellant is not eligible to avail the benefit of notification for the reason that the above mentioned products are non excisable goods, as per Section 2 (d) of the Central Excise Tariff Act 1944.
HELD THAT:- The very same issue was considered by the Tribunal in the appellant's own case for the earlier period in in Final Order No. 40789-40799/2014 dated 20.11.2014 [2014 (11) TMI 919 - CESTAT CHENNAI]. It is submitted that rectified spirit and extra neutral alcohol were classified under subheading 220490 prior to 01.03.2005 at nil duty. After restructuring of Tariff with effect from 01.03.2005, rectified spirit, extra neutral alcohol etc. were cleared without payment of duty as exempted goods by Notification No. 03/2005-CE dated 24.02.2005 and Notification No. 12/2012 dated 17.03.2005. The adjudicating authority has denied the benefit of Notification No. 67/2005 on the view that after the restructuring of Tariff, the rectified spirit and extra neutral alcohol were not mentioned in the Tariff. It has been consistently held by Tribunals and High Courts that after restructuring of Tariff, no item has been excluded from the Tariff. The Board Circular No. 808/5/2005-CX dated 25.02.2005 was also relied. It has been clarified by Board that rectified spirit and extra neutral alcohol are covered under subheading 22 07 2000 after restructuring of the Tariff. Thus, it will be covered under Chapter 22.
The above decision of the Tribunal has been affirmed and upheld by the Hon’ble Apex Court as reported in Commissioner of CE & ST versus Dharani Sugars & Chemicals Ltd. [2022 (3) TMI 274 - SC ORDER].
The demand, interest and penalties cannot sustain. The impugned order is set aside - Appeal allowed.
-
2024 (7) TMI 1073
Levy of short production duty - ratio of 93% finished goods viz-a-viz inputs consumed - setting aside the OIO without considering material facts - violation of principles of natural justice - HELD THAT:- The undisputed facts are that apart from the variation in production percentage as compared to the norms fixed by the ‘SAIL’, there was no other material available with the Department of the alleged excess production being cleared without payment of duty. The variation as per the Department was of only 2%. Further that the Plant and Machinery used by the respondent was not of the latest technology as that of the SAIL.
The findings of Tribunal have not been challenged or disputed in the present appeal. During the course of arguments, no factual distinction between the facts of the present case and of M/S H.R. STEELS PVT. LTD. VERSUS CCE & ST, ALWAR. [2018 (12) TMI 1950 - CESTAT NEW DELHI] has been made out. The addition was made only on the sole ground of 2% variation in production output of the respondent as compared to SAIL.
No question of law much less substantial question of law is involved - appeal dismissed.
-
2024 (7) TMI 1072
Interpretation of statute - Rule 6 (3) (b) of Cenvat Credit Rules, 2004 - Demand equal to 10%, if the assessee reversed/paid proportionate Cenvat credit in respect of common input service used in the manufacture of exempted goods - whether the Tribunal properly acted as the appellate authority under Section 35C of the Central Excise Act, 1944, because the Hon'ble Tribunal does not explicitly address/verify whether the conditions stipulated under Rule 6 (3) (b) of Cenvat Credit Rules, 2004 have been complied with by the assesse - HELD THAT:- In view of the findings of facts arrived at by the CESTAT, it is not in dispute that the respondent has reversed the Cenvat Credit proportionate to the credit on input service used for exempted goods along with interest. The credit though availed at the time of receipt of input service but after reversal thereof along with the interest, the respondent never availed the credit.
As per option given by Rule 6 (3) of the Rules which has come into effect from 01.04.2008, the appellant could not have insisted upon the payment of 10% amount of the value of the exempted goods when the petitioner has opted for the reversal of the Cenvat Credit on the input goods and services used for the exempted goods along with the interest. Merely because the respondent has reversed such credit in the year 2010, the appellant-Revenue cannot insist upon payment of 10% amount of the value of the exempted goods coupled with the facts that the respondent has paid interest at the rate of 24% per annum on the amount of reversal of the Cenvat Credit on 01.10.2010 which is not in dispute.
Thus, no question of law much less any substantial question of law arises from the impugned order of the CESTAT - appeal dismissed.
-
2024 (7) TMI 1071
Refund of excess duty paid on account of issue of credit notes to dealers and stockists after the clearance of the goods - rejection on the ground that incidence of duty has been passed on and the appellants have not given any evidence to the effect that the incidence has not been passed on to the ultimate customers - principles of unjust enrichment under Section 11B read with provisions of Section 12B of Central Excise Act - HELD THAT:- This issue as to whether in the given set of facts, it was not possible to identify the persons who ultimately borne out the amount of excise duty collected in excess and therefore such excess amount will remain in the fund which will be utilised for the benefit of the customers as provided under Section 12D of the Central Excise Act, 1944 needs to be examined. The appellants have not been able to establish that they had not passed on the excess excise duty to their ultimate customer. Merely because they were selling on MRP basis, it would not absolve them from the fact that they had not passed on the original duty charged by the appellant to the ultimate customer and therefore even if they are entitled for refund on merit, they would still not be entitled for refund on the grounds of unjust enrichment under Section 11B.
It is found that the judgment by Larger Bench of Hon’ble Supreme Court in the case of Commissioner of Central Excise, Madras Vs Addison and Co. Ltd., the Addison and Company case law [2016 (8) TMI 1071 - SUPREME COURT] is squarely applicable to the facts of the case in as much as while the appellant is entitled for refund on merits but clearly they are not entitled for refund on the grounds of unjust enrichment as they have not been able to clear the bar of unjust enrichment.
In so far as applicability of Section 12B is concerned, Commissioner (Appeals) has relied on various judgments including Grasim Industries Vs CCE, Bhopal [2003 (2) TMI 89 - CEGAT, NEW DELHI], Sangam Processors (Bhilwara) Ltd., Vs Collector of Central Excise, Jaipur [1993 (2) TMI 211 - CEGAT, NEW DELHI], Grasim Industries Ltd., Vs CCE, Bhopal [2011 (8) TMI 689 - SUPREME COURT]. He has placed reliance on Sangam Processors Ltd., [1994 (1) TMI 275 - SC ORDER] judgment passed by Three Member Bench of Hon’ble Supreme Court to come to the conclusion that in the given fact of the case principle of doctrine of unjust enrichment would be applicable. It is found that though the appellants have also relied on various case laws, all these case laws have been dealt with adequately by the Commissioner (Appeals) who has given reasons for relying on certain judgments for coming to the conclusion that in the facts of the case, the principle of unjust enrichment would be applicable.
Since the appellants have failed to prove that they had not passed on the excess excise duty to their ultimate customer, they would be hit by the provision of Section 12B. Therefore, while the refund is eligible on merits, the same cannot be disbursed to the appellant and is required to be dealt with in accordance with the provisions under Section 12D. Therefore, part of the observations of the Commissioner (Appeals) as regards non-entitlement of the refund on merit is not sustainable. However, his order is sustainable as regards applicability of unjust enrichment in the facts of the case.
Appeal disposed off.
-
2024 (7) TMI 1041
Refund claim of excess duty borne - denial on account of unjust enrichment - sale of goods on the basis of LME price index.
Revenue sought to deny the refund claim on the ground that during the impugned period, when the appellant paid duty at higher rate, the same was booked in the Books of Accounts as revenue expenditure and later on, after the decision, the ld.Commissioner (Appeals) held that the lower rate of duty is payable, the appellant booked in the Books of Accounts as recoverable from the Department, therefore, they are not entitled to claim the refund.
HELD THAT:- The said issue has been examined by this Tribunal in the case of COMMISSIONER OF CUSTOMS VERSUS M/S. U.T. ELECTRONICS PVT. LTD. [2019 (12) TMI 1219 - CESTAT NEW DELHI], wherein this Tribunal has observed 'the mere fact that the amount of differential CVD is shown as recoverable in profit and loss account is, in itself, not sufficient to prove that burden thereof has been passed by the assessee to the buyers. Onus otherwise rests upon the Department to prove the same. There is no such evidence produced by the Department. On the contrary, the assessee has placed on record the C.A. Certificate falsifying the allegations of unjust enrichment. Same cannot be ignored, that too. in absence of any evidence to the contrary.'
It is further noted that the appellant is selling the goods on the basis of LME price index. Therefore, the issue is to be examined when the goods are sold by the appellant on the basis of LME Price Index, whether Revenue would hit by unjust enrichment or not ? The said issue is examined by the Hon’ble Apex Court in the case of State of Rajasthan & Ors. V. Hindustan Copper [1997 (11) TMI 516 - SUPREME COURT], wherein the Hon’ble Apex Court has observed that 'It has been stated in the said affidavit that the price of copper has always been fixed by the Mineral & Metal Trading Corporation (MMTC) on the basis of the prevailing price fixed by the London Metal Exchange (LME) and this was done not only for the period in question but also for prior and subsequent period and that only such price could be charged and that no part of the duty in respect of rectified spirit captivity consumed in the manufacture of copper could be added to the price of copper which was fixed on the basis of the LME prices.'
Admittedly, in this case, the appellant is selling aluminium on the basis of LME Price Index. In that circumstances, the bar of unjust enrichment is not applicable to the facts of this case.
As the Revenue has failed to do so, admittedly, the duty element has been borne by the appellant, which has been paid by them to SAILRSP, therefore, they are entitled for refund claim of excess duty paid by them, which was rightly sanctioned by the adjudicating authority vide its Order dated 27.01.2010.
The impugned order set aside - appeal allowed.
-
2024 (7) TMI 1040
Clandestine removal - Job-work - burden of proof - appellant submits that clandestine removal, being a serious charge, is required to be proved beyond doubt on the basis of affirmative evidence and not on the basis of inferences - Penalty imposed on the Director, Shri Milan Kumar Mehra.
HELD THAT:- The submission of the appellant is agreed upon that clandestine removal must be proved and supported by sufficient evidence and the burden of proof in this regard is on the Department. Such onus to prove is required to be discharged by production of sufficient tangible and affirmative evidence, which is found to be absent in the instant case. Charge of clandestine removal cannot be made and confirmed against the appellant on the basis of assumptions, based on purported documents whose authenticity is disputed - all the goods mentioned in the challans have been supplied to established units, whose addresses are available. The Department could have conducted verification at the end of the recipients and easily ascertained what type of activities were undertaken by the appellant for them.
The appellant has submitted that the above said three SSI units have sent inputs under the job challans for processing and the semi-finished goods were returned to the respective companies under the appellant’s job challans and the appellant raised the bills on the said companies for the 'job charges' giving reference of both the challans. The only job work which the appellant undertook for these companies was 'printing' of the boards sent and returned the same. The activities undertaken by the appellant to these companies does not amount to 'manufacture' as defined under Section 2 (f) of the Central Excise Act, 1944. On receipt of the semi-finished goods, the respective units undertook further processing and the final product chargeable to duty emerge only at the premises of the respective units - the Department has not brought in any evidence to counter these submissions made by the appellant. The Department merely alleges that these units were not existing and hence they could not have sent the material for job work.
The demands of central excise duty confirmed in the impugned order on the basis of the Annexures D/1 to D/8 to the Notice, is not sustainable and accordingly, we set aside the same. Since, the demand of duty is not sustainable, the question of demanding interest and imposing penalty on the appellant-company does not arise.
Penalty imposed on the Director, Shri Milan Kumar Mehra - HELD THAT:- It is observed that the impugned order alleged that he is the mastermind in floating the fictitious units and instrumental in clearing the finished goods clandestinely without payment of duty under the guise of job work. Since the allegation of clandestine removal of the goods without payment of duty has not been established, it is held that no penalty imposable on the Director/Appellant No. 2. Accordingly, the penalty imposed on Appellant No. 2 is set aside.
The impugned order is set aside - appeal allowed.
-
2024 (7) TMI 1039
Clandestine manufacture and clearance of Sponge Iron - undervaluation of Sponge Iron removed during the period from January 2006 to June 2009 - entire demand has been calculated on the basis of the documents seized from the premises - retraction of statements - Section 9D of the Central Excise Act, 1944 - penalty on the Managing Director of the appellant-firm - Confiscation of 18,156.96 MT of Sponge Iron.
HELD THAT:- The impugned order has considered the documents seized from the premises of DCPWB as documents maintained by VSPL, on the basis of the statements recorded from the Managing Director on various dates. It is also alleged that some of the entries available in the seized documents tally with the invoices raised by the appellant for their actual transactions. Accordingly, the ld. adjudicating authority concluded that since Smt. Chunia Nandi is one of the Directors of VSPL and also the Proprietor of DCPWB, Shri D. Nandi has kept these documents in the premises of DCPWB and he has control over these documents. The ld. adjudicating authority cited the provisions of Section 36A of the Central Excise Act, 1944 and observed that these documents can be admitted as evidence and duty can be demanded based on the entries available in these documents.
A perusal of the provisions of Section 36A reveals that the documents seized from another premises can be admitted as evidence provided the author of the entries made in the documents has been identified. Once the identity of the person in whose handwriting the documents are written is established and his statement is taken admitting that it is his handwriting, then the documents can be admitted as evidence - the requirements as provided under Section 36A are not fulfilled in this case and hence the seized documents cannot be presumed to be documents relating to the appellant company and relied upon to demand Central Excise Duty from the appellant-company.
In the case of METAL FITTING (P) LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, DELHI [1997 (4) TMI 146 - CEGAT, NEW DELHI] it has been held that entries in private diary and loose papers are not sufficient evidence to establish charge of shortages and the burden is on the Department to prove shortages and clandestine removal.
In the case of DULICHAND SILK MILLS (P) LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD [2001 (4) TMI 147 - CEGAT, CHENNAI], it has been held that to establish the allegation of clandestine removal, the statement of manager of the assessee alone not sufficient.
It is observed that no statement has been recorded either from the owner of the premises or from the person who was in possession of the seized documents at the time of seizure. Regarding the admission statement recorded from Shri Nandi, it is observed that he has retracted his statements by writing a letter to the jurisdictional Commissioner and by filing a sworn in affidavit before the Notary Public and contented that on 30.06.2009; his statement was taken late in the night, when he was under custody, under coercion, threat and duress, at Bhubaneswar Headquarters. It is observed that an admission statement taken under such situation alone cannot form the basis for inferring clandestine removal.
The ld. adjudicating authority has simply brushed aside the retractions as mere afterthoughts. When the statements recorded are retracted, its evidentiary value comes down. In such circumstances, further corroborative evidences required to substantiate the allegations of clandestine removal. It is observed that other than the entries in the note books and loose sheets and the statements recorded, there is no other corroborative evidence available in this case.
The appellant relied on the decision in the case of KRISHNA & CO. VERSUS COLLECTOR OF CENTRAL EXCISE, JAIPUR [1997 (10) TMI 138 - CEGAT, NEW DELHI] wherein it has been held that demand based on note books without any other evidence of production and clandestine removal is not sustainable.
A perusal of Section 9D of the Central Excise Act, 1944 clearly establishes that unless a person who has made the statement is examined as a witness before the adjudicating authority, no reliance can be placed on any statement recorded under section 14 of the Central Excise Act. Any statement recorded under Section 14 of the Central Excise Act could be admitted in evidence only after the process of examination and cross examination is completed under Section 9D - it is observed that the procedure set out under Section 9D is a mandatory procedure and without following this procedure, no reliance can be placed on any statement recorded under Section 14 of the Central Excise Act, 1944.
The allegation of clandestine clearance cannot be sustained on the basis of statements alone. There must be some positive evidences like purchase and consumption of unaccounted raw materials, discrepancy between recorded stock and physical stock, seizure of any goods en route, consumption of excess electricity, actual clandestine removal of finished goods without payment of duty, mode of removal, evidence of transporters and buyers of the clandestinely removed goods and flow back of funds pertaining to clandestine removals - the demands confirmed on account of clandestine removal in the impugned order without any of the above mentioned evidences are not sustainable.
Since the demands of duty on account of clandestine removal and undervaluation is not sustained and set aside, the question of demanding interest and imposing penalty on the appellant company does not arise.
Penalty imposed on Appellant No. 2, the Managing Director, Shri Digambar Nandi - HELD THAT:- The alleged role of Appellant No. 2 in commission of the offence is not established. Accordingly, the penalty imposed on the Appellant No. 2 viz. Shri. Nandi, Managing Director of the appellant-company is set aside.
Confiscation of 18,156.96 MT of Sponge Iron - HELD THAT:- The allegation of clandestine removal and undervaluation is not sustained and set aside and hence, the question of confiscation of the goods alleged to have been cleared clandestinely without payment of duty does not arise. Accordingly, the order for confiscation and imposition of redemption fine in the impugned order is set aside.
The impugned order is set aside - appeal allowed.
-
2024 (7) TMI 995
Denial of CENVAT Credit - supplies made against International Competitive Bidding - goods manufactured in Maneja - Sub-Rule (6) of the Rule 6 of CCR, 2004 - HELD THAT:- It is clear from exception from Rule 6 of CCR, 2004 that where the goods are obtained for a contract which is obtained under International Competitive Bidding, and where the imports of such goods are totally exempted from basic and Additional Customs Duty, the Cenvat Credit availed also need not be reversed in terms of Rule 6(6) of the Cenvat Credit Rules, 2004.
The adjudicating authority has raised doubts about the use of all the goods supplied by the Maneja plant to the Savli plant being in the nature of the goods supplied in connection with the contract with DMRC. From the perusal of the appeal memorandum and synopsis submitted by the appellant, it is seen that this ground has not been contested. No specific evidence has been produced to establish that all the goods supplied by the appellant to their plant at Savli related solely to supplies with respect to DMRC contract.
The questions have not been answered in the appeal memorandum or in the synopsis, it is required to remand the matter back to the original adjudicating authority to give an opportunity to appellant to clarify this aspect. The appellant are liberty to submit all the evidences in support of the claim that the all goods supplied by them were indeed in the nature of supplies made for the fulfilment of the contract obtained from DMRC under International Competitive Bidding from their other factory. If such evidence is produced, the benefit of Rule 6 (6) of the CCR will be extended to the appellant.
Appeal allowed by way of remand for fresh adjudication.
-
2024 (7) TMI 994
Clandestine Removal - trading of goods and/or clearance of “inputs as such” or not - denial of CENVAT Credit - Liability to pay the duty, Interest, and penalty in connection with clearance of goods for the period from FY 2007-08 to 2011-12 - time limitation.
Demand of differential duty demand of Rs. 40,70,142/- - Appellant has contended that while transporting goods to depot, Appellant had paid Octroi and Municipal Cess and also given discount to the various buyers while selling of the goods from depot - HELD THAT:- It is settled law that in terms of statutory provisions and decision, show that deductions claimed from assessable value must be actual and not artificial - there are force in appellant’s submission that amount of discounts from price passed on to its customers and Octroi/ Cess paid by it to NMMC is required to be deducted from assessable value of goods. Various decisions relied upon by the Appellant on this aspect supports their submissions. Consequently, considering Octroi and Municipal Cess paid by Appellant and the discount given to the various buyers by Appellant, the net amount of duty difference payable Rs. 3,81,322/- is also accepted by Appellant in their written submissions as against confirmation of duty demand of Rs. 40,70,142/- by the Commissioner under the impugned order - the Appellant is liable to pay the differential duty of Rs. 3,81,322/- along with interest and penalty and Appellant would also be eligible for reduced penalty @ 25 % of the duty demand, subject to the condition that Appellant pay the differential duty Rs. 3,81,322/- with interest and reduced penalty @ 25 % of duty is also paid within 30 days of communication of this Order. This differential duty of Rs. 3,81,322/- with interest and reduced penalty @ 25 % payable may also be deducted from the amounts deposited during the proceedings which is appropriated by O-I-O.
Duty demand of Rs. 43,19,238/- confirmed on clearance of showers holding that the same were cleared as such after import and the process carried out thereon after import does not amount to manufacture - HELD THAT:- The definition of ‘manufacture’ under Central Excise Act, 1944 is very wide and includes any process incidental or ancillary to the completion of a manufactured product. The process carried out by the Appellant on subject goods was incidental and ancillary for making the product marketable in India. Thus, it would amount to manufacture and hence demand of duty Rs. 43,19,238/- is not sustainable - In the case of Shital Industries vs CCE, Ahmedabad-II [2024 (6) TMI 1261 - CESTAT AHMEDABAD], this Tribunal has held that the Rule 16 of Central Excise Rules 2002 unambiguously provide that if an assessee even does not carry out manufacturing activity but carried out any activity whether the same is amount to manufacture or not manufacture, assessee can avail Cenvat credit on the duty paid goods received in the factory. And after any process, if it is cleared from the factory, in case of activity amount to manufacture it is cleared on payment of duty on the transaction value and if the activity does not amount to manufacture then the same is cleared on payment of duty equivalent to the Cenvat credit. Thus, the transactions of appellant are covered by the provision of Rule 16 of Central Excise Rules, 2002 - the demand of duty Rs. 43,19,238/- is not sustainable. As the final product shower head was cleared on payment of duty and such duty amount was also recovered by the Appellant as per the law and therefore, the payment of duty on goods can not be considered as deposited in terms of Section 11D of Central Excise Act 1944.
Cenvat Credit demand of Rs. 27,61,517/- in respect of Cenvat credit taken for Additional Duty of Customs (CVD) paid on import of such parts of shower head as per law - HELD THAT:- It is observed that it is not open for Revenue to demand duty of Rs. 43,19,238/- for clearance of final product on one hand and demand of Rs. 27,61,517/- under Rule 14 of the Cenvat Credit Rules 2004 for Cenvat Credit contained in those very goods, on the other hand. It is also settled law that demand of duty on final product and also on inputs contained therein is impermissible.
Duty demand of Rs. 3,12,373/- on alleged Clandestine Clearance of Goods - HELD THAT:- The demand is based on confessional statements which have not been taken on record since the provisions of section 9D of Central Excise Act 1944 not followed in this matter. There are force in the submissions of Appellant on this ground. It is also found that demand on the basis of certain private records viz. dispatch Register recovered during search are not supported by any other corroborative clinching evidence not sustainable - since there is no evidence to support clandestine clearance of goods without payment of duty, confirmation of demand of duty amounting to Rs. 3,12,373/- also is not sustainable as we set aside the same.
Penalty imposed under Rule 26 of Central Excise Rules, 2002 - HELD THAT:- Since major/substantial demand of duty with interest & penalty is set aside, separate penalty imposed under Rule 26 of Central Excise Rules, 2002 on the co-Appellants Shri Shri Hemantkumar N. Shah, Director and Shri Kalpesh M. Sapa, Ex-Dy. Manager is not warranted and deserves to be set aside, and is set aside.
The differential duty of Rs. 3,81,322/- with interest and penalty are upheld. Remaining duty demands with interest and Penalty are set aside - Appeals are partially allowed.
-
2024 (7) TMI 926
Wrongful availment of Cenvat credit on different input services - recovery of credit with interest and penalty - HELD THAT:- The respondent-assessee availed Cenvat Credit on various services and Revenue denied on few which included CHA services for export, renting of immovable property service, CHA (import), legal consultancy service, company secretary service, convention services, real estate service, cargo handling service etc. These all services have been used in or relation to manufacture of finished goods and fall within the definition of ‘input service’.
There are no factual or legal infirmity in the impugned order warranting interference of this Court, thus, the instant appeals deserve to be dismissed and accordingly dismissed.
............
|
9911796707
