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Central Excise - Case Laws
Showing 61 to 80 of 81316 Records
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2024 (11) TMI 714
Reversal of CENVAT credit - availment of credit of the duty earlier paid under Rule 16(1) of the Central Excise Rules, 2004 as if it is an input - credit sought to be reversed on the ground that machine was not subjected to the process of manufacture - whether the availment of differential cenvat credit of Rs.1,59,543/- and Rs.3371/- by the appellant under Rule 16(2) of Central Excise Rules, 2002 is justified? - Admissibility to credit on demurrage charges.
Credit sought to be reversed on the ground that machine was not subjected to the process of manufacture -HELD THAT:- The appellant after receipt of the machine, in response to the Department’s query submitted that the lathe machine is a customised capital goods and it is fabricated according to the required specifications of the customer. They contended that after the machine was received from the Pune customer, it was remanufactured by dismantling and thereafter adding certain materials / inputs enhancing its features and assembled it to make it customer-worthy. These works carried out on the lathe machine cannot be termed as process of repairing of rejected machine but results into manufacture.
The said goods has been cleared to another customer after customising it according to his specifications. Also, on going through the list of materials appended with the appeal paper book, it is seen that certain features of the earlier machine after dismantling it had been added and as a new commodity with distinct use had emerged as a result of the processes; therefore, bringing out a new machine. Hence, the processes resulted into manufacture. In these circumstances, the payment of the duty on the transaction value of remanufactured machine is justified.
Admissibility to credit on demurrage charges - HELD THAT:- It is seen that the same was taken on proper tax paid invoices and leviability of tax and its classification was is not disputed; hence, availment of credit cannot be disputed.
The impugned order is set aside and the appeal is allowed.
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2024 (11) TMI 713
Reversal of CENVAT Credit - denial of credit on the ground that the drawback is admissible on the exported goods and the conditions that no Cenvat Credit of input and input services is availed in respect of the goods exported - Time limitation.
Whether demand is barred by period of limitation or not? - HELD THAT:- The department was aware fully about the facts of the matter since 28.04.2008 as the appellant has informed them in detail regarding reversal of Cenvat Credit done by them on various inputs as mentioned in the annexure to their letter dated 28.04.2008. These facts categorically establish that it was well within the knowledge of the department regarding the reversal of Cenvat Credit by the appellant.
The impugned show cause notice came to be issued on 29.03.2013 invoking the extended time proviso under section 11A(4) of the central excise act 1994 read with rule 14 of the Cenvat Credit rule 2004 which is not legally sustainable we are therefore are of view that the show cause notice is hit by period of limitation and we hold that extended time proviso is not invokable in this case as the department was in know of facts since 28.04.2008. The show cause notice has been issued in the month of March, 2013 much beyond the normal period of limitation. The impugned show cause notice as well as impugned order-in-original are bared by period of limitation.
The impugned order-in-original is without any merit and therefore same is set aside - appeal allowed.
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2024 (11) TMI 712
Recovery of the cenvat credit availed by the appellant against three supplementary invoices pertaining on the differential duty paid by the job worker - Rule 9(1)(b) of Cenvat Credit Rules, 2004 - HELD THAT:- The job worker after payment of differential duty issued supplementary invoices to the appellant who have availed cenvat credit on the said documents. Even though initially adjudication order confirmed the demanded amount with interest invoking suppression of facts against the job-worker, later on appeal, the same was set aside.
On appeal by the job-worker against the confirmation of demand, it has been now held by the Tribunal in favour of the job-worker by dropping the demand and upheld by the Hon’ble Supreme Court holding that the method of valuation adopted by the job worker is in order. Since the demand being not sustainable against the job-worker, the recovery of cenvat credit on the ground of suppression in making the differential duty payment from the appellant is unsustainable.
The impugned order is set aside and the appeal is allowed.
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2024 (11) TMI 664
Classification of goods - end product emerging after certain processing undertaken on dry dates - classifiable under sub-heading No.080410300 or 20089999 of the Central Excise Tariff - processes undertaken on dry dates amount to "manufacture" under the Central Excise Act - process of washing, pressing, deseeding, cutting, drying in oven, sieving and packing resulted in the production of new product in respect of dry dates or not - denial of SSI exemption Notification No.08/2003-CE dated 01.03.2023 - imposition of penalty under Section 11AC of the Central Excise Act, 1944.
Whether the end product emerging after certain processing undertaken on dry dates is classifiable under sub-heading No.080410300 or 20089999 of the Central Excise Tariff? - HELD THAT:- It is found that the said product was sold as “dry dates cut” or “dry dates chura” in the packing of 25 Kg or 50 Kg as shown on invoices issued by the Appellant. The Appellant has contented that the product emerging after the above processes is again dry dates and as such classifiable under Sub-heading 08041030 as dry dates while the Department has viewed that the end product is processed dry dates different from dry dates and is classifiable under Sub-heading 20089999 of the Central Excise Tariff as prepared fruit.
The classification of an item in the Central Excise Tariff is regulated in accordance with the principles enunciated in General Rules for Interpretation (GIR). Rule 1 of GIR provides that classification shall be determined according to the terms of the headings and any relative Sections or Chapter Notes. If the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading applies - As per GIR if goods are ambiguous and two or more headings appear to be applicable, then Rule 3 should be applied which provides that specific heading should be preferred to general heading. Rule 3 of GIR provides, “when by application of sub-rule (b) of rule 2 or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as given in rule 3(a), 3(b) or 3(c)”. The heading which provides most specific description shall be preferred to heading providing a general description as held in CCE Vs. Maharshi Ayurveda Corp Ltd. [2005 (12) TMI 93 - SUPREME COURT], where it has been held that as per Rule 3(a) of GIR, the heading which provides specific description should be preferred to heading which provides general description.
It may further be seen that HSN 2008 covers only those fruits, nuts and edible parts of plants which are not specified elsewhere. For dry dates, there is specific entry under SH 0804 of the Central Excise Tariff. Hence, dates without seeds and dried in oven are again dates. So, it would be classifiable under SH 0804 of the Central Excise Tariff.
The product emerging subsequent to the processes undertaken by the Appellant can be consumed as such. Going by the entry of Chapter-08, we are of the considered view that the product can rightly be classified as dry date. When the product is covered under Chapter -08, the need to go to the Chapter-20 which is residuary in nature does not arise. Therefore, the contention of the Appellant to classify the processed dry dates under Chapter-08 attracting nil rate of duty, fully agreed upon.
Whether the process of washing, pressing, deseeding, cutting, drying in oven, sieving and packing resulted in the production of new product in respect of dry dates? - HELD THAT:- The Appellant carried out washing with water for dust removal from dry dates, breaking dry dates for removal of seeds, removing seeds from dry dates, cutting deseeded dry dates into small piece, such small pieces of deseeded dry dates are subjected to oven drying for removal of moisture which occurred during washing, for getting requisite size sieving of moisture free dates is undertaken and thereafter packing in 25 Kgs and 50 Kgs bags for sale - according to Chapter Note 7 of Chapter 20, the processes undertaken by the Appellant amounts to manufacture under deemed concept even if the said processes do not amount to manufacture under general concept. This view is incorrect inasmuch as that after subjecting the above processes, the end product remains the same in regard to characteristics, name and quality. Sub heading 2008 of the Central Excise Tariff covers only those fruits which are not classifiable elsewhere. As dry dates in all forms find entry in Chapter 8 of the Central Excise Tariff, it would not be classifiable under SH 2008. When the item does not fall under Chapter 20, there is no applicability of Chapter Note-7 of Chapter 20.
SSI exemption - HELD THAT:- SSI exemption has been denied to the Appellant on the ground that value of clearances of cut dry dates and chura dry dates is required to be included for determination of aggregate value of clearances as the said goods were dutiable excise goods. Since said goods namely cut dry dates and chura dry dates were fully exempted from excise duty as processes undertaken thereon were not amounting to manufacture, the value of clearances of such cut dry dates/chura dry dates would not be includible for determination of aggregate value. Thus, denial of exemption granted under SSI exemption Notification is improper and not sustainable.
Imposition of penalty under Section 11AC of the Central Excise Act, 1944 - HELD THAT:- It is found that the same is leviable proportionate to duty amount confirmed. If no duty is confirmed, no penalty would be imposable under Section 11AC of the Central Excise Act, 1944. In this context reference made to the decision of the Tribunal in the case of Deek Printers [2013 (9) TMI 278 - CESTAT AHMEDABAD] wherein it has been held that in case demand is not sustainable, penalty would not be imposable. Hence, in the present case, no penalty is imposable.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 663
Reversal of common Cenvat Credit for exempted goods - demand of 5/6% of the value of exempted goods - HELD THAT:- It is seen that the impugned order has been passed by the Adjudicating Authority as per the directions of the this Bench vide Final Order No. A/55751/2016 dated 08/12/2016 [2016 (12) TMI 841 - CESTAT NEW DELHI]. In this Order, the Tribunal has held 'the failure of the appellant to follow the procedure perfectly should not come in the way of extending the substantial benefit of proportionate reversal. However, we find that in the order passed by the lower authority, he has not given any finding as to whether the reversal already made satisfies the test of proportionate reversal in terms of quantum of reversal. Hence, we are of the considered opinion that the matter is to be remanded to the original adjudicating authority to verify whether the amount of Cenvat credit already reversed along with interest satisfies the requirement of proportionate reversal.'
It is seen from the impugned order that the Adjudicating Authority has verified all the documents placed before him and has passed very detailed order. He has considered the Cost Account’s Certificates and has relied on the decision of Hyderabad Tribunal in the case of Aster Pvt. Ltd. Vs. Commr. of Central Excise, Hyderabad [2016 (6) TMI 866 - CESTAT HYDERABAD] & Madras High Court in the case of Pepsico holdings [2015 (8) TMI 249 - MADRAS HIGH COURT] to come to conclusion that demand of 5/6% of the exempted value is not legally sustainable.
The Adjudicating Authority has followed the directions of this Tribunal’s Order and applied the ratio of the relevant case laws and all the facts were verified by the Range office. Only after this he has passed the impugned order in a considerable detailed manner.
There are no reason to interfere with the same - the appeal filed by the Revenue dismissed.
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2024 (11) TMI 612
Abatement claim as stipulated in Rule 10 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - less than 15 days continuous closure in each calendar month or otherwise - HELD THAT:- Rule 10, which provides for abatement, requires a continuous period of 15 days or more and there is no stipulation in the said Rule as to the period of 15 days or more being in one month or more than one month. The only stipulation being that the continuous period without a break has to be more than 15 days. In the instant case, there was no production of notified goods for a period of 41 days in the factory of the respondent.
Similar issue arose before the High Court of Punjab and Haryana in COMMISSIONER CENTRAL EXCISE VERSUS M/S KAY FRAGRANCE P. LTD. [2013 (9) TMI 697 - PUNJAB & HARYANA HIGH COURT], wherein in similar circumstances, the Division Bench of Punjab and Haryana High Court held that the continuous period of 15 days or more prescribed under Rule 10 could not be read in isolation to raise an inference that if closure in a month, was less than 15 days, a party would not be entitled to abatement of duty.
Consequently, the questions of law raised are thus answered by holding that closure of a continuous period of 15 days or more is not restricted to a calendar month and can be spread over in more than one month. Even in a particular month, if the closure is less than 15 days, the Assessee would still be entitled to abatement provided the continuous period of closure is more than 15 days and other stipulations of Rule 10 are satisfied by the Assessee.
The questions of law are thus answered in favour of the Assessee and against the Revenue - the appeal of the Revenue is dismissed.
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2024 (11) TMI 611
CENVAT Credit on outward transportation when the sale of excisable goods is on FOR basis - denial of credit availed on the strength of the invoices after 6 months/ 1 year from the date of invoices, in terms of Rule 4(1) of Cenvat Credit Rules, 2004.
CENVAT Credit on outward transportation when the sale of excisable goods is on FOR basis - HELD THAT:- Certain facts needs to be ascertained in order to allow the Cenvat Credit as prescribed under Board Circular No.1065/4/2018-CX dated 08.06.2018. Though, the appellant have vehemently submitted that the sale is on FOR basis and the price of goods is inclusive of excise duty, the same needs to be verified. The adjudicating authority has heavily relied upon the Hon’ble Supreme Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT]. However, after considering the said judgment, this Tribunal in the case of Ultratech Cement Limited itself has allowed the Cenvat Credit which was upheld by the Hon’ble High Court of Gujarat in the judgment [2020 (3) TMI 1206 - GUJARAT HIGH COURT]. However, this subsequent development has not come in the light of the learned adjudicating authority. Therefore, the overall matter after considering the subsequent development and verification of facts needs to be reconsidered.
Denial of credit availed on the strength of the invoices after 6 months/ 1 year from the date of invoices, in terms of Rule 4(1) of Cenvat Credit Rules, 2004 - HELD THAT:- The facts of date of invoices availment of the Cenvat Credit, the amended provision of Rule 4 of Cenvat Credit Rules needs to be verified and the judgment relied upon by the appellant which prima facie covers the issue herein also to be considered.
The impugned order set aside - appeal allowed by way of remand.
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2024 (11) TMI 610
Eligibility for cenvat credit in respect of the input service received and used at the job-workers premises for the purpose of manufacture of goods of the appellant on job work basis - job work done under Rule 4(5)(a) of Cenvat Credit Rules, 2004 - HELD THAT:- The identical issue in the assessee’s own case has been decided by this Tribunal in SHRI RAMNIWAS SAINI, INTERNATIONAL PACKAGING PRODUCTS PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, DAMAN [2019 (10) TMI 1597 - CESTAT AHMEDABAD], wherein this Tribunal has held that 'the very same issue has been considered by this Tribunal in the case of KKALPANA INDUSTRIES (INDIA) LTD., SHRI VISHAL RANKA, SHRI AJIJUL RAHAMAT KHAN VERSUS C.C.E. & S.T., SILVASA [2019 (7) TMI 2044 - CESTAT AHMEDABAD] wherein, by interpreting Rule 3 of Cenvat Credit Rules, it was held that input service used for job work, the Cenvat credit thereof is admissible to the principal.'
From the above decision in the assessee’s own case, the issue is no longer res-integra. Accordingly, the impugned order in the assessee’s appeal is not sustainable and impugned order in Revenue’s appeal is liable to be upheld - appeal of assessee allowed.
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2024 (11) TMI 609
Confiscation of goods - imposition of penalty under Rule 25 of CER, 2002 - HELD THAT:- As far as the confiscation of goods and imposition of penalty under Rule 25 are concerned, following the decision of Gujarat High Court in COMMISSIONER OF C. EX. & CUSTOMS VERSUS SAURASHTRA CEMENT LTD. [2010 (9) TMI 422 - GUJARAT HIGH COURT], the Delhi High Court held in COMMISSIONER OF CENTRAL EXCISE DELHI-II VERSUS GANPATI ROLLINGS PVT. LTD. & ANR. [2016 (6) TMI 157 - DELHI HIGH COURT] that Section 11AC is a condition precedent for taking action under Rule 25.
Section 11AC provides for penalty for not paying or short paying duty by reason of fraud, collusion, wilful misstatement or suppression of facts. No demand of duty was confirmed in the impugned order nor was any penalty imposed under section 11AC. Therefore, confiscation of goods and imposition of penalty under Rule 25 need to be set aside.
A plain reading of Rule 26 shows that it is a consequence of the confiscation. This penalty also needs to be set aside.
The impugned order is set aside qua the appellants - appeal allowed.
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2024 (11) TMI 608
Refund of Education Cess/Secondary and Higher Education Cess - classification of Triacontanol - whether the case requires to be remanded back to the original authority to decide the classification and to requantify the amount of refund accordingly?
Eligibility of refund of Education Cess/Secondary and Higher Education Cess - HELD THAT:- The issue is no long res integra. Hon’ble Supreme Court of India held in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA & OTHERS [2019 (12) TMI 286 - SUPREME COURT] that the appellants, operating under area based exemption notification, are not eligible for refund of Education Cess/Secondary and Higher Education Cess.
While the original dispute in the matter was the classification of Triacontanol and the dispute was whether the same was a plant growth regulator or a plant growth promotor. It is found that Commissioner (Appeals ) relied upon the decision of Tribunal in the case of BAHAR AGROCHEM & FEEDS PVT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [2011 (2) TMI 600 - CESTAT, MUMBAI]. The Tribunal held that 'it is clear that the product under consideration merits classification as an insecticide and not as a plant growth regulator'.
The classification of Triacontanol has been settled by the Tribunal. Though, it is reported that the decision of the Tribunal has been challenged before the Apex Court, no stay has been granted and therefore there is no occasion to differ with the decision of the Tribunal. Therefore, no purpose will be served if the case is remanded back to the original authority for the classification of the impugned product i.e. Triacontanol as the original authority is bond by the decision of the Tribunal.
Thus, the classification of the impugned product can be held to be under CETH 3808.10 as an insecticide - there is not reason to remand the matter back to the original authority for quantification also. The original authority can very well sanction the refund to the appellant as per the classification arrived at.
The classification of Triacontanol shall be done under CETH 3808.10 - appellants are not eligible for refund of Education Cess/Secondary and Higher Education Cess - original authority shall calculate the amount of refund payable to the appellants - Appeal allowed in part by way of remand.
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2024 (11) TMI 607
CENVAT Credit - input service - Construction Service - Architect Service - Mandap Keeper and Outdoor Catering Service - Club or Association Service - Rent-a-Cab Service - Asset Management Service etc.
Rent-a-Cab Service - HELD THAT:- The services in respect of Rent-a-Cab Service have been availed for use by the officers of the company to attend the office work; however, in respect of services availed after 01.04.2011, they have paid up the amount of Rs.1,08,463/- disputed in the SCNs and they are not in appeal against the same.
Mandap Keeper and Outdoor Catering Services - HELD THAT:- It is the contention of the appellants that these services are availed for organizing conferences, field demonstrations, dealers’ meetings, sponsored programs and training etc. Therefore, these cannot be set to be used by the officers of the company for private purposes.
Memberships of the clubs - HELD THAT:- Similarly, the memberships of the clubs are taken in respect of Golf Club where the company sponsors a tournament or memberships of various international professional clubs are taken. There is force in the argument of the appellant. The definition of Input Service is vast and encompasses all the activities that are required for the furtherance of the business. The exclusion that is put in place from 01.04.2011 appears to be in respect of services which are not primarily used for personal use of the officers or staff. It is found that no evidence to the effect that the disputed services are availed primarily for the personal use has been brought forth by the SCN and therefore, the submissions of the appellants cannot be brushed aside.
Asset Management Services - HELD THAT:- Rule 2(l) includes services which are used in relation to “Financing” of the Company. The definition further provides that the input services can be directly or indirectly in or in relation to the manufacture of final product. Financing is an integral activity not only in the manufacture of any excisable goods but also in any business activity. Therefore, the services availed by the appellants in order to maximize the returns on the investments is for the purpose of furthering of the business. Thus, the appellants being a Public Limited Company has to take care of finances and such an activity includes proper investment.
The impugned orders are modified to the extent that demands which are contested by the appellant are set aside and demands which have been paid up by the appellants and not contested in the appeals are upheld - Hence, all the appeals are partly allowed.
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2024 (11) TMI 548
Reversal/recovery of CENVAT Credit - clearance of input as such in terms of Rule 3 (5) of Cenvat Credit Rules, 2004 - Section 11D of Central Excise Act, 1944 - HELD THAT:- The appellant have paid the excise duty on the removal of input as such on the transaction value, the said excise duty was found to be in excess to the actual Cenvat Credit involved in such removal of input as such.
From the plain reading of the section 11D, it is clear that if an assessee collects an amount in the name of excise duty and retained the same with him. The same needs to be credited into the Central Government. In the present case, there is no dispute that even though, the appellant have charged excise duty over and above the Cenvat Credit involved in inputs removed as such but the total amount collected from the customer has been paid by debiting the Cenvat account. Therefore, once any amount collected in the name of excise duty and paid to the government, the same cannot be demanded twice as provided under Section 11D of the Central Excise Act.
This issue has been considered in the case of Shivam Metals [2008 (8) TMI 654 - CESTAT, NEW DELHI] wherein, this Tribunal has held that 'In the present case, the Appellant paid duty on the exempted goods and collected the amount from their customers as evident from the invoice. It is noted that the Appellant had not retained any amount and paid to the Government and, therefore, Section 11D of the Act cannot be invoked. So, the impugned order is not sustainable, and it is set aside.'
From the above judgment, it is settled that any amount collected but paid to the Central Government, the demand of such amount cannot be raised invoking Section 11D of the Central Excise Act, 1944. Following the above judgment and the discussion made, it is opined that the demand under Section 11D in the present case is not sustainable.
The impugned orders are set aside - The appeals are allowed.
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2024 (11) TMI 547
Classification of goods - bio-fungicides and bio-insecticides - to be classified under ETI 3002 90 30 as contended by the appellant or under ETI 3808 99 10 as contended by the department? - applicability of judicial precedents - HELD THAT:- When the matter had earlier come up for decision before the Tribunal against the earlier order dated 29.04.2011 passed by the Commissioner, the Tribunal noticed that though the appellant had placed reliance upon the decisions of the Tribunal in NMS Babu [2005 (10) TMI 18 - CESTAT, BANGALORE] and T. Stanes [2008 (10) TMI 109 - CESTAT, CHENNAI], but the impugned order had ignored these two decisions and had decided the matter independently. The impugned order was, therefore, set aside and the matter was remanded to the Commissioner for a de-novo decision in the light of the two decisions of the Tribunal. The Tribunal, however, made it clear that it was not expressing any opinion on the merits of the case.
The Commissioner, instead of deciding the matter, placed the matter in the call book by letter dated 15.09.2014 for the reason that the appeals filed by the department before the Supreme Court against the orders of the Tribunal in NMS Babu and T. Stanes were pending. The Commissioner also stated that the matter will be taken up for adjudication only after the Supreme Court decided the matter.
A perusal of the judgment of the Supreme Court in NMS Babu clearly indicates that the issue of classification of the products had not been raised by the department in the appeal filed by the department before the Supreme Court. What was contended by the department before the Supreme Court was in connection with only two issues. This is evident from a perusal of paragraph 2 of the judgment of the Supreme Court wherein it has been noticed that though large number of issues were decided by the Tribunal, but only two issues were raised by the learned counsel appearing for the department - The first contention of the department before Supreme Court was that the Tribunal had not dealt with the issue as to whether the respondent subsidiary company was only a dummy company, consequent to which the excisable goods manufactured by it would have to be clubbed with the holding company - The second issue that was raised by the department before the Supreme Court was regarding suppression of material facts by both the holding company and the subsidiary company. The Supreme Court noticed that neither the Commissioner nor the Tribunal had satisfactorily answered the first issue raised by the department. It is for this reason that the Supreme Court remanded the matter to the Tribunal to decide afresh as to whether any case for clubbing of excisable goods manufactured by the holding company and the subsidiary company had been made out or not. The Supreme Court also remitted the matter regarding suppression of material facts by the holding company and the subsidiary company to the Tribunal for re-determination on facts.
In the instant case, though there were two binding decisions of the Tribunal on the issue that had arisen for consideration before the Commissioner and inspite of a specific direction issued by the Tribunal to decide the matter in the light of the aforesaid two decisions, the Commissioner made an attempt not to follow the two binding decisions and take an independent decision. The belief of the Commissioner that he could decide the matter on merits as the Supreme Court while dismissing the Civil Appeal filed by the department against the decision of the Tribunal in T. Stanes had left the questions of law open is tainted with mala fides. When the Supreme Court left the question of law open, it was the Supreme Court alone that was to decide the matter and the Commissioner was bound by the two decisions of the Tribunal. The Commissioner also did not attempt to examine the contention raised by the appellant that the appeal filed by the department before the Supreme Court against the decision of the Tribunal in NMS Babu was not against that part of the order of the Tribunal that decided the issue of classification and it was only on other two issues. To maintain judicial discipline, the Commissioner was bound to follow the decisions of the Tribunal in NMS Babu and T. Stanes.
However, the Commissioner not only declined to follow the two binding decisions, but even went to the extent of stating that the decision of the Tribunal in NMS Babu “does not expound the correct position of law and hence reliance placed thereon is not justified or proper”. The Commissioner even placed reliance upon the decision of the adjudicating authority in T. Stanes, which decision had been set aside by the Tribunal in the appeal filed by T. Stanes.
The order dated 13.09.2022 passed by the Commissioner deserves to be set aside and is set aside - Appeal allowed.
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2024 (11) TMI 546
Denial of utilization of Cenvat Credit for payment of duty during the defaulted period in terms of Rule 8(3A) of Central Excise Rules, 2002 - HELD THAT:- Considering the fact that the provision of Rule 8(3A) of Central Excise Rule, 2002 has been declared ultra vires by the Hon’ble Gujrat High Court in the case of Indsur Global Ltd. [2014 (12) TMI 585 - GUJARAT HIGH COURT] and Hon’ble Punjab & Haryana High Court in the case of M/S SANDLEY INDUSTRIES VERSUS UNION OF INDIA AND OTHERS [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT]. Therefore, the Cenvat Credit cannot be denied to the appellant for utilization of payment of duty during the defaulted period. In that circumstances the demand against the appellant for recovery of Cenvat Credit during the defaulted period is not sustainable and consequently, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 545
Area Based Exemption - substantial expansion - circumstantial evidence to prove the eligibility is on record or not - whether the appellants are eligible for the exemption contained under N/N. 49-50/2003 dated 10.06.2003? - Extended period of limitation - suppression of facts.
HELD THAT:- It is found from the records that the appellant has started production on 30.03.2002 as can be seen from the application for approval of revised capacity after undertaking substantial expansion. Therefore, the contention of the Department that the increased capacity of production was effective from 30.03.2002 whereas the Notification required substantial expansion of capacity on or after 7th day of January, 2003. In view of the same, the circumstantial evidence does not indicate that the appellants have commenced increased production after substantial expansion on or after the appointed date.
Coming to the declaration dated 25.11.2006, it is found that District Industry Centre vide Certificate dated 23rd November 2006 has certified the substantial expansion and increased production capacity. Therefore, even assuming that the declaration dated 25.11.2006 was not given by the appellants, substantial compliance of the conditions of the Notification and therefore has rendered themselves eligible for the exemption Notification. Learned Commissioner though acknowledges the fact of their eligibility denies the same on the basis of a letter dated 11.12.2007, purported to have been written by the appellants to the effect that they are availing SSI exemption and are not availing the said Notification - In the instant case, the appellants claim that they have filed declaration dated 25.11.2006 though they could not produce the acknowledgement for the same. This is a mere procedural violation which should not come in the way of allowing the benefit of the exemption Notification. Therefore, in the facts and circumstances of the case, it is found that the appellants are eligible for the exemption Notification from 25.11.2006.
Extended period of limitation - suppression of facts - HELD THAT:- The Department did not establish evidence to allege intent to evade payment of duty. This is more conspicuous due to the fact that the appellants are otherwise eligible for SSI exemption. Therefore, the extended period cannot be invoked. Accordingly, the penalties imposed under Section 11AC are also liable to be set aside.
Appeal allowed in part.
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2024 (11) TMI 544
Refund of the Cenvat duty paid through account current (PLA) in terms of the provisions of N/N. 56/2002-CE dated 14.11.2002 as amended - whether the education cess and secondary & higher education cess can be paid by utilizing BED Credit by a unit availing exemption under N/N. 56/2002-CE dated 14.11.2002? - HELD THAT:- This issue has been considered by the Division Bench of this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, JAMMU VERSUS RB. JODHAMAL & CO. PVT. LTD. [2013 (9) TMI 345 - CESTAT NEW DELHI], wherein it has been held that a unit availing of exemption under Notification No. 56/2002-CE cannot utilize BED Credit for payment of education cess and secondary & higher education cess which are not exempted under the said notification.
The appellant is registered in the state of Jammu & Kashmir and were availing benefit of area based exemption under N/N. 56/2002-CE dated 14.11.2002. The said notification provides mechanism to give effect to aforesaid exemption by way of refund of duty paid through PLA. As per the procedure, the manufacturer avails Cenvat Credit of duty/cess paid by them on inputs and utilizes whole of the CENVAT credit available with them on last day of the month for payment of Central Excise duty and Cess. The balance amount of duty is paid in cash and on application of refund, the refund is granted for payment of Central Excise made in cash only. The refund is granted by way of cash or by way of self credit in PLA.
There is no infirmity in the impugned order vide which the refund of the education cess and secondary & higher education cess has been denied - the impugned order is upheld by dismissing all the three appeals of the appellant.
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2024 (11) TMI 470
Valuation of Goods under Section 4 i.e Transaction Value or under Section 4A i.e MRP based value - HELD THAT:- It is not in dispute that the issue involved in these appeals is covered by the decision of this Court in the case of JAYANTI FOOD PROCESSING (P) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, RAJASTHAN [2007 (8) TMI 3 - SUPREME COURT], where SC prescribes the ruling for proper valuation in 14 different but identical appeals in a single judgement.
The appeals are dismissed.
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2024 (11) TMI 469
Recovery of amount paid by the petitioner to the Department as interest in excess of actual interest liability - validity of Rule 8 (3) of the Central Excise Rules, 2002 which is declared ultra vires - HELD THAT:- An amount received on the basis of provisions of law, which has been declared ultra vires has to be treated as in contravention of provision of Article 265 of the Constitution of India and the same has to be refunded. The Supreme Court in Mafatlal’s case [1996 (12) TMI 50 - SUPREME COURT] has held that a person is entitled to receive the amount once the Court holds a person entitled to it and as a corollary the Department would not be entitled to keep the same with them. Therefore, even if an application is not moved, the department would be obliged to refund the amount to concerned person from whom the excess amount has been received unlawfully after the provision has been declared ultra vires.
This Court holds that the amount kept by the respondents as excess amount of Rs. 3,66,649/- was unjustified and the Department ought to have refunded it back. The application for refund moved by the petitioner has wrongly been treated as an application under Section 11B of the Act and should have been treated as a simple application for refund in terms of the provisions having been declared ultra vires, if the amount therefore has to be returned to the petitioner.
The respondents are directed to refund the amount alongwith interest @ 6% per annum from the date the same was deposited erroneously - appeal disposed off.
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2024 (11) TMI 468
Penalty on co-noticees, when the case of main appellant involved demand of duty interest and penalty has been settled under SVLDRS-2019 - HELD THAT:- As of now it is settled that once the duty demand case is settled under SVLDRS-2019, as per Scheme itself, there is a waiver of penalties on the main assessee against whom the demand was confirmed as well as on other co-noticees.
Reliance placed in the case of Anil K Modani [2024 (1) TMI 444 - CESTAT MUMBAI] where it was held that 'Even though the appellants herein could not, at the time of existence of the scheme have derived the benefits from the coverage by the scheme, the intent and purpose of the scheme being collection of the duty or some percentage thereof, and forgoing interest, fine and penalty, the disposal of the application of M/s JSW Ispat Steel Ltd renders the continuance of the penalty against the three appellants to be not in conformity with the relief scheme. Accordingly, they are eligible for erasure of the penalties against them.'
In the case of Subhash Panchal [2024 (5) TMI 1484 - CESTAT AHMEDABAD] it was held that 'it is settled that once the main case of duty evasion is settled under SVLDRS 2019 the penalty on the Co-appellant shall not survive. 4. Accordingly, the penalty is set aside.'
In view of above judgments given by the two coordinate Division Benches, the penalties imposed on the co-noticees in a case where the main noticee against whom the demand is confirmed, the case is settled under SVLDRS then in respect of other co-noticees penalty will not sustain even if they have not filed a declaration under SVLDRS-2019 and decision on the issue of SVLDRS-2019 in the case of Four R Associates and others reported as [2023 (11) TMI 9 - CESTAT CHENNAI] given by Single Member Bench whereas the aforesaid cited decisions are given by Division Bench. Therefore, Division Bench judgment will prevail over Single Member Bench.
The penalties on the appellants are not sustainable. Hence the same are set aside - Appeals are allowed.
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2024 (11) TMI 467
Recovery of CENVAT Credit under Section 11A of Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 - requirement to file application under Section 11B of Central Excise Act, 1944 for refund of debited cenvat credit - HELD THAT:- The appellant had paid appropriate central excise duty on goods cleared by them from 01.03.2005 to 12.05.2005 and after six months of the payment of the appropriate duty, officers of the Department of Revenue through oral direction on 21.01.2006 made the appellant debit Rs.5,48,144/- in their cenvat account. The said debit was not assessed to duty through any proceedings. Therefore, the appellant had taken suo moto credit of the said amount.
In the present case, it is noted that the amount debited in cenvat account by the appellant at the instance of officers of Department of Revenue was not adjudicated upon, was not assessed to duty nor was appropriated. It is further noted that sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2004 provides for manner of utilization of cenvat credit. As per the said provisions, cenvat credit can be utilized for payment of any duty of excise on final product, or on removal of partially processed goods, or on removal of capital goods as such, or for payment of service tax. The debit involved in the present appeal was not in respect of any of such requirements as provided under sub-rule (4) of Rule 3 of Cenvat Credit Rules.
The present appellant was eligible to take suo moto cenvat credit of Rs.5,48,144/- and there was no need for them to file application for refund under Section 11B of Central Excise Act, 1944.
The impugned order is set aside - appeal allowed.
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