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Central Excise - Case Laws
Showing 681 to 700 of 81330 Records
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2024 (6) TMI 494
Recovery of Central Excise duty with interest and penalty - distribution of credit of tax paid on ‘royalty’ charge - time period for issuance of issuance of SCN - HELD THAT:- It is seen that the notice covers the period after December 2007 in addition to a few months prior to extend to all credit taken on tax paid on ‘royalties’ for five years till issue of notice that there is no justification offered for inclusion of the period after December 2007 in the notice till the normal period of limitation commences as ‘relevant date’ in terms of section 11A of Central Excise Act, 1944. Consequently, save for credit assigned to Unit I during the normal period of limitation of one year computed in accordance with show cause notice dated 3rd August 2012, and credit assigned between August 2011 and December 2011 the proceedings stand barred by limitation. Thus the scope of disputation is, this, restricted.
The submissions of the noticee that procedural infirmities should not stand in the way of substantive entitlement and that the law, as it stood then, did not envisage proportional distribution of credit were not dealt with in the impugned order. It would also appear that decisions supporting these propositions now produced before us had also not been placed before the adjudicating authority.
It would, therefore, be appropriate for a the legality of the proposals in the notice to be decided afresh and limited to the period validated by section 11A of Central Excise Act, 1944 - the impugned order is set aside - matter remitted back to the original authority to be adjudicated afresh after hearing the assessee on their submissions.
Appeal is allowed by way of remand.
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2024 (6) TMI 493
Valuation of goods - inclusion of trade discount in the assessable value - HELD THAT:- It is found that a strange concatenation of facts here – the facilities offered by the buyer for installation of equipment which is, actually, to the benefit of such buyer and the discount offered by appellant which, certainly, is not gain to the seller – and contrived hyphenating of the two without any justification for concluding that the amount of ‘trade discount’ is ‘money value’ of the facilities at premises of customer. The benefit derived by each from burdening cost/loss on themselves are different and that there are two separate transactions does not appear to have crossed the minds of the lower authorities. The appellant has similar arrangements with ‘oil marketing companies (OMC)’ and Thane Municipal Transport (TMT), to name a few.
In MAHANAGAR GAS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI – II [2024 (3) TMI 341 - CESTAT MUMBAI], it has been held that 'the appellants’ case is squarely covered under new Section 4(1)(a) of CEA which essentially permit different transaction values, unlike normal sales price existed prior to 1-7-2000, which has also been explained by C.B.E. & C., vide its Circular No. 354/81/2000-TRU, dated 30-6-2000.'
There are no reason to sustain the order now impugned and is set aside - appeal allowed.
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2024 (6) TMI 492
Clandestine removal of 536.134 MT of copper - diversion of imputs - existence of cogent and corroborative material establishing the fact of actual clandestine clearance or not - violation of principles of natural justice - availment of irregular Cenvat credit - time limitation.
Clandestine removal - HELD THAT:- The allegations of clandestine removal of the final product of assessee are merely presumptive allegations. This Tribunal in Century Metal Recycling Pvt. Ltd. [2016 (1) TMI 967 - CESTAT NEW DELHI] has held that when there is no documentary evidence of clandestine removal of raw material i.e. transport details, buyer details, financial transactions etc. adduced, in the absence of the corroborative evidence, statutory records cannot be discarded merely on the basis of wrong interpretation and the presumption alleging the Cenvat credit as inadmissible is held unsustainable in that circumstance.
In Suzuki Synthetics Pvt. Ltd. [2014 (11) TMI 990 - CESTAT AHMEDABAD], the Tribunal observed that if the case of clandestine removal is to be sustained based on private records then the same is required to be supported by corroborative evidence with regard to purchase of raw material, manufacture of final goods, flow-back of money or identification of the buyers and their statement, etc.
The ratio laid down in the above mentioned judgments is squarely applicable to the present case also as there is no corroborative and tangible evidence adduced by the department establishing clandestine clearance/diversion of input material by the assessee except the presumption about the same.
Violation of principles of natural justice - HELD THAT:- Though the department has taken the plea that there are three test reports which supports the department’s contention but it is observed that there is no apparent denial to the fact that the three of the samples picked up by the department were of irregular shape and were not homogenous at all and as is mentioned in CRCL Report itself. The sample as was picked up from the M/s. Nalwa Steel premises, the buyer of the assessee, the sample being absolutely homogenous and showing the result of 11.9% of copper content in the Ingot - Department has failed to show any cogent reason of concealing the M/s. Nalwa steels sample report. The adjudicating authority itself has held that not informing the assessee about M/s. Nalws Steels sample test report clearly shows that show cause notice has relied upon the test reports which did not favour the assessee. Non disclosing the vital fact of the report which supports assessee is held to be the violation of principal of natural justice.
Wronful avaiment of CENVAT Credit - HELD THAT:- There is no evidence about transportation of 20.636 MT of ingots from the appellant to anybody else without payment of duty. No shortcomings have been noticed in the accounts maintained by the assessee. Thus, there is no iota of evidence or investigation made by the department to prove that the raw material of the assessee as shown to be consumed is an excess as compared to its consumption in the final products. There is no evidence even to show that the final products were clandestinely cleared by the assessee. In view thereof, the confirmation of the recovery of Cenvat credit alleging the same to be irregular for 20.636 MT of ingots to have been clandestinely removed is also not sustainable - the demand/reversal of availed Cenvat credit has wrongly been confirmed despite accepting the M/s. Nalwa Steels sample report.
Extended period of Limitation - HELD THAT:- It is clear that department has produced no evidence about any evasion of duty by the appellant. The allegations of clandestine removal are held to have no supportive evidence. Admittedly, the assessee is a registered manufacturer. Returns were being regularly filed. Accordingly, the suppression of facts to evade duty has wrongly been raised against the appellant - the department has intentionally and wrongly concealed the correct test reports. In fact, the departmental adjudicating authority itself has appreciated the same while dropping the major part of demand - the demand, whatsoever has wrongly been confirmed on the assessee. Clearly the present is not the case of suppression of facts or misrepresentation as is alleged - the extended period of limitation has wrongly been invoked.
The SCN itself is barred by time - Appeal allowed.
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2024 (6) TMI 491
Reversal of CENVAT Credit - services used in or in relation to manufacture of dutiable final products and for exempted services, as provided in Rule 6 of Cenvat Credit Rules, 2004 - non-maintenance of separate records/inventory for the inputs/ input services - HELD THAT:- In case of CCE, DELHI VERSUS M/S INDRAPRASTHA GAS LIMITED [2017 (11) TMI 1391 - CESTAT NEW DELHI] Delhi Bench in identical case while dismissing the appeal filed by the revenue, observed 'identical issue decided in the case of CST, DELHI VERSUS MACHINE TOOLS (I) PVT LTD [2017 (8) TMI 833 - CESTAT NEW DELHI], where it was held that it is clear that no credit is available on any “input service” attributable to “trading” during the material time. When no such credit is eligible, the respondent cannot avail the benefit of cenvat credit scheme.'
There are no merits in the impugned order - appeal allowed.
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2024 (6) TMI 490
Goods supplied against international competitive bidding are chargeable to ‘nil’ rate of duty - Exemption under N/N. 06/2002-C.E. dated 01.03.2002 as amended and N/N. 06/2006-C.E. dated 01.03.2006 as amended - extended period of limitation - HELD THAT:- From the permission letters issued by the Assistant Commissioner, it is observed that the Assistant Commissioner has categorically allowed the appellant to clear the goods without payment of duty and the appellant has also intimated the clearance details in the E.R.-1 returns filed by them. Therefore, it is found that the appellant has not suppressed any information from the department. Thus, the intention to evade payment of duties does not exist in this case. Hence, the demand of Central Excise Duty confirmed in the impugned order by invoking the extended period of limitation is not sustainable.
The demand in the instant case has been raised for the period from 2005-06 to 2006-07 vide the Show Cause Notice dated 07.04.2010. Thus, the entire demand confirmed in the impugned order is barred by limitation. Hence, the entire demand of duty confirmed in the impugned order is liable to be set aside on the ground of limitation. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
The impugned order is set aside on the ground of limitation - appeal allowed.
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2024 (6) TMI 440
Method of valuation - manufacture and clearance of medicaments - to be assessed u/s 4 or 4A of Central Excise Act, 1944 read with abatement Notification No. 49/2008-CX(NT) dated 24.12.2008 - case of the department is that the entire sale i.e. whether sale in retail or for institution should be covered under by Section 4A for the valuation purpose - demand of differentail duty - demand of cenvat credit in respect of removal and retention of control samples.
Whether the appellant is liable to pay excise duty on the product namely, medicament which are supplied to institution under Section 4 or Section 4A of the Central Excise Act, 1944? - HELD THAT:- This issue is no longer res integra as has been decided in various judgments that whether medicaments which supplied for use of institution and no retail sale price is affixed on the pack of the medicament., the assessment of value for the purpose of payment of excise duty shall be done under Section 4 of the Central Excise Act, 1944.
In the case of M/S USV LTD., PARVEZ K KUMANA, DILIP A PANDIT, JAYESH K VASAVADA VERSUS C.C.E. & S.T., DAMAN [2019 (5) TMI 507 - CESTAT AHMEDABAD], this Tribunal considering the same issue whether the partly medicament were sold through dealer in retail and partly to the institution, the Tribunal held that the goods which were supplied for the consumption of institution, the valuation provision which is correctly applicable is section 4 of Central Excise Act and not Section 4A.
In view of above judgment which are exactly on the identical facts of the present case it was consistently held that in case of supply made to institutional buyer, the valuation shall be done under Section 4 and not under Section 4A of the Central Excise Act, 1944.
Demand of cenvat credit on removal and retention of control samples - HELD THAT:- In this regard, the appellant’s submission is that since there is a diversion view on this issue even though the appellant have admittedly paid the duty and not contesting the same, their prayer is to set aside the penalty corresponding to the duty of such control samples - there are force in the argument of the appellant, since the appellant have given up the merit in this case, the same is not addressed, therefore, the payment of cenvat credit/ duty on the control sample is not under dispute and the same is maintained.
Penalty - HELD THAT:- Considering the issue being debatable ,the penalty is not imposable, hence, the penalty corresponding to the duty on Control Sample is set aside.
In the present case also, the impugned orders are not sustainable on the main issue. Accordingly, the impugned orders are modified as above - appeal allowed.
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2024 (6) TMI 439
Application for fixation of special rate of refund of central excise duty in term of Notification No. 20/2007-CE dated 25th April 2007 rejected - rejection on the ground that it was time barred - HELD THAT:- The Application filed by the Appellant, for fixation of special rate of refund of central excise duty in term of Notification No. 20/2007-CE dated 25th April 2007, was rejected on the ground that it was time barred.
It is found that the present case is no longer res-integra as CESTAT Kolkata in the case of M/s. Hindustan Unilever Limited Vs Commissioner of Central Excise & Service Tax, Dibrugarh [2023 (10) TMI 991 - CESTAT KOLKATA] dealt with identical issue and held that the pecial value addition applications filed by the assessee for the period 2009-10 to 2016-17 after 30th September of the same year cannot be considered as time barred.
The applications filed by the appellant for fixation of special rate in this case is not time barred. Accordingly, the impugned order is not sustainable and hence the same is set aside.
The impugned order is set aside - appeal allowed.
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2024 (6) TMI 438
Supply of goods to different power projects against international competitive biddings by the clearing the goods without payment of duty - Denial of benefit of exemption N/N. 6/2006-CE dated 1.3.2006 - HELD THAT:- The appellant have been issued a Show Cause Notice to deny the benefit of N/N. 6/2006 dated 1.3.2006. As the goods cleared by the appellants are classified under Central Excise Tariff Sub-heading Nos. 8413 and 8431 whereas the above mentioned Customs Notification exempted the goods falling under Customs Sub-heading No. 9801.
As the issue has already been settled in the appellants own case for the earlier period in [2023 (7) TMI 298 - CESTAT KOLKATA] wherein it has been held that appellants is entitled for benefit of N/N. 6/2006-CE dated 1.3.2006.
Thus, the appellant is entitled for benefit of the said notification - there are no merit in the impugned order and the same is set aside - appeal allowed.
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2024 (6) TMI 391
Interpretation of statute - "where it is possible to do so" u/s 11A(1) of the Central Excise Act, 1944 - adjudication of the impugned show-cause notice after more than 7 years is barred by time or not.
Interpretation of "where it is possible to do so" u/s 11A(1) of the Central Excise Act, 1944 - HELD THAT:- It is pertinent to note that the words "where it is possible to do so" is elastic only when there are reasonable grounds beyond the control of the Adjudicating Authority to conclude adjudication within the time frame given under Section 11A (11) and not otherwise. If there is no reasonable explanation, the elasticity would not be available. It is fairly well settled that legislature never wastes words or says anything in vain. The insertion of sub-section “Section 11A (11)” is not without any purpose or it is not a dead letter. The words "where it is possible to do so" under Section 11A (11) of the Central Excise Act, 1944 must be read reasonably keeping in mind the legislative intent and policies and the mischief sought to be remedied. It cannot be read dehors the same. The provisions of under Section 11A (11) of the Central Excise Act, 1944 is not dead letter and mere surplusage.
The outer limits fixed by the Legislature under Section 11A (11) of the Central Excise Act, 1944 of the completed within a reasonable time frame set out under Section 11A (11) unless an extra ordinary situation arises beyond the control of the Adjudicating Authority and it can never be kept pending for an indefinite period or sine die.
The period of limitation of 6 months or 2 year under Section 11A of the Central Excise Act, 1944 cannot be extended to more than seven years as is done in the instant case. In the case of K.M Sharma Vs. I.T.O [2002 (4) TMI 7 - SUPREME COURT] it has been held by the Hon'ble Apex Court that the provisions of a fiscal statute, more particularly, one regulating the period of limitation must receive a strict construction as the law of limitation is intended to give certainty and finality to legal proceedings.
When an application under Section 18 is not entertained on the ground of limitation, the same not fructifying into any reference, then that would not tantamount to an effective application and consequently the rights of such applicant emanating from some other reference being answered to move an application under Section 28-A cannot be denied - the dismissal of an application seeking reference under Section 18 on the ground of delay would tantamount to not filing an application within the meaning of Section 28-A of the Land Acquisition Act, 1894."
Delay in adjudication and its impact on Article 14 of the Constitution of India, 1950 - HELD THAT:- Where no time limit has been prescribed; the action should be completed within a reasonable time period. The reasonable time period U/s 11A of Central Excise Act, 1944 is 5 years. In the instant case the matter is pending adjudication for more than 7 years - where the statute does not prescribe any period of limitation within which power has to be exercised by the authorities, in such circumstances also the proceedings must be concluded within a reasonable period of time. The maximum period of limitation provided under the special statute should be considered to be the reasonable period within which the adjudication order should be concluded.
In the instant case period of more than 7 years from the issuance of impugned Show Cause Notice on 22.09.2014 cannot be said to be reasonable period for taking up/concluding adjudication proceedings. Section 11A (1)/Section 11A (4) of the Central Excise Act, provides 5 years as a maximum period which in any case should be taken as reasonable period within which the adjudication should be completed.
The instant application stands allowed.
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2024 (6) TMI 390
Clandestine Removal - confiscation of goods - penalty - goods were found to be transported outside the factory premises of the Appellant without any documents - physical stocks were found which were not recorded in the Daily Stock Register.
HELD THAT:- Admittedly, the Appellant is carrying the job-work for IOCL. They get the bulk lubricant from IOCL and the same are converted into smaller pouches by way of re-packing and re-filling. This activity amounts to manufacture in terms of Section 2(f) of the Central Excise Act 1944. After this, necessary Excise Duty is paid on the small pack being cleared by them - the work undertaken by the Appellant is not an activity of normal manufacture wherein the bought out raw materials are converted into finished goods. The appellants are actually undertaking the activity on behalf of IOCL and they are fully responsible for the stock reconciliation to be provided to IOCL after converting the bulk lubricants into smaller pouches. Without any dispute, the goods in question were very much found within the factory premises and they are not seized while they were being transported without any proper document.
It cannot be seen as to how the Department can presume that these were unaccounted for goods and are likely to be cleared without payment of Excise Duty. It is also not the case of the Department that the seized goods did not have the marking/emblem of IOCL. This would prove that the goods in question belonged to IOCL only.
The Tribunal in the case of KISAN SAHKARI CHINNI MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., MEERUT [2016 (9) TMI 937 - CESTAT ALLAHABAD], has held 'Further, I take notice of the fact that the State Excise authority, who are in physical control of the stock of molasses of production, storage and dispatch in the appellant’s factory have accepted the recorded stock and at the end of the molasses season have accepted the net excess at 961 qtls. Therefore, I hold that the whole demand is based on assumption and presumptions and is fit to be set aside.'
In the present case also, it is clear that the bulk quantity has been given to the Appellant by IOCL for conversion into smaller pouches and the appellants are responsible to reconcile and quantity received and despatched and thus account for the entire stock received by them. With the packed pouches still within the premises, it gets clarified that entire proceedings have been initiated on assumptions and presumptions. The ratio laid down in the cited case law is squarely applicable.
The impugned order is not sustainable - Appeal allowed.
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2024 (6) TMI 389
Denial of CENVAT Credit with interest and penalty - HELD THAT:- Undisputedly, these proceedings have arisen in the demand notice issue relying upon the grounds stated in earlier show cause notice dated 30.01.2015. Those proceedings has been culminated by the above referred order of the Tribunal in favour of the appellants [2018 (12) TMI 363 - CESTAT ALLAHABAD] as no further ground is raised, there are no merits in the impugned orders.
Appeal allowed.
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2024 (6) TMI 388
Levy of service tax - business auxiliary services - amount received from VISA and Mastercard - mutual benefit of both the parties - interpretation of cost-sharing agreement - export of services under Rule 3(1)(iii) of the Export of Service Rules, 2005 - extended period of limitation.
Levy of service tax - HELD THAT:- The said agreement is basically nothing but cost-sharing agreement. Further, we find that Revenue wants to tax under business auxiliary service whereas the services provided by the appellant relates to promotion of the brand of VISA/Mastercard and not any product/service provided by VISA/Mastercard. Further, the business auxiliary services are covered under the category of III services as per Rule 3(1)(iii) of export of service Rules and the service failing under 3(1)(iii) should be seen qua the person receiving the service and not the place of performance of the service.
Further, this issue is no more res integra and has been settled in various cases relied upon by the appellant’s own case SBI CARDS AND PAYMENT SERVICES PVT. LTD. VERSUS C.S.T. DELHI [2017 (12) TMI 237 - CESTAT NEW DELHI] where it was held that Even for the period afier 1st July 2012 the provision of telecommunication service by Vertzon India to Verizon US satisfied the conditions under Rule 6A (1) (a), (b), (d) and (e) of the ST Rules and was therefore an 'export of service. The amount received for the export of service was not amenable to service tax.
The impugned order is not sustainable - appeal allowed.
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2024 (6) TMI 387
Refund of interest as per Section 72 of Finance Act, 2010 to avail the benefit of Retrospective amendment to Rule 6 of CCR, 2002/2004 - interest on the excess credit after expiry of three months from the date of filing of refund i.e., from 17.9.2011 till 21.11.2019.
Refund of interest as per Section 72 of Finance Act, 2010 to avail the benefit of Retrospective amendment to Rule 6 of CCR, 2002/2004 - HELD THAT:- The claim of the appellant that even though the amount of interest has been paid in compliance with Section 72 of the Finance Act, 2010 giving retrospective effect by amending Rule 6 of the CENVAT Credit Rules, 2002/2004 allowing the assesses to reverse proportionate credit with applicable interest to settle the litigation saddled with huge amount of demands on 8% / 10% of the value of the exempted product, the refund of the said interest still be allowed in pursuance to the order of the Tribunal dated 18.07.2019 and the Tribunal cannot the examine the said issue in the present Appeals. The said contention of the appellant deserves to be rejected for the simple reason that taking note of their compliance with the requirement to avail the facility of retrospective amendment, the adjudicating authority in the denovo adjudication in the year 2011 recorded payment of said interest and passed the order in favour of the appellant in setting aside the demand of 8%/10% value of the product following the statutory mandate of retrospective amendment incorporated in Section 72 of the Finance Act, 2010 where the condition include reversal of proportionate credit with interest. No mention in the said amendment on the fact of utilisation or otherwise of the credit availed. Therefore, any judgment/Order contrary to the said statutory provisions be per incuriam and cannot be a binding precedent - Besides, no evidence has been brought on record by the Appellant that they had filed refund claim for the interest paid on the proportionate credit reversed after the de novo order in 2011 along with the refund claim for excess credit of Rs.1,00,10,808/- not allowed to them by the Commissioner. The Tribunal being the last fact finding authority, to render complete justice, has a bounden duty to ascertain the facts in its proper perspective and dispose the case accordingly.
Interest on the excess credit of Rs.1,00,10,808/- after expiry of three months from the date of filing of refund i.e., from 17.9.2011 till 21.11.2019 - HELD THAT:- The learned Commissioner in the impugned order dated 21.4.2011 observed that after appropriation of the proportionate CENVAT credit of Rs.91,82,820/-, the balance CENVAT credit of Rs.1,00,10,808/- reversed by the appellant on 6.11.2007 cannot be restored as they have not followed proper procedure by filing the refund claim under Section 11B of CEA, 1944. Consequently, the appellant filed the refund claim on 17.6.2011, therefore, the appellants are entitled to interest on expiry of three months from the date of filing of the refund claim in view of the judgment of the Hon’ble Supreme Court in the case of Ranbaxy Laboratories Ltd. [2011 (10) TMI 16 - SUPREME COURT].
The impugned orders are modified by upholding the rejection of the refund of interest amount of Rs.88,22,475/- and setting aside the order denying interest on the refund application for Rs.1,00,10,808/- for the period after expiry of three months from the date of filing of refund.
Appeal disposed off.
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2024 (6) TMI 377
Wrong availment of Cenvat Credit on Inputs - denial of interest on deposited amount - payment of compensatory interest on interest - HELD THAT:- The contention of the Appellant that the amount deposited during investigation will be entitled to refund along with interest agreed upon. Such amount deposited is neither duty nor interest.
The impugned order passed by the learned Commissioner (Appeals) is set aside as far as denying the interest on Rs.18,07,914/- and appeal is allowed. The Adjudicating Authority is directed to grant interest upon the said amount, from the date of deposit till the date of grant of Rs.18,07,914/- @ of 12% per annum. Such interest should be given to the Appellant within a period of Ninety days from the date of receipt of copy of this order.
Appeal allowed.
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2024 (6) TMI 376
Valuation - inclusion of amount of freight and insurance paid by the appellant in the assessable value or not - Place of removal - goods have been supplied on FOR destination bases, is the buyer’s place - invocation of extended period of limitation.
Inclusuon of cost of freight in the assessable value - HELD THAT:- There was an agreement between the appellant and its buyers according to which prices were agreed to be on ex work basis as also have been mentioned in the invoices. The goods admittedly got cleared from the factory of appellant on payment of appropriate sales tax. Invoice were prepared at the factory gate only in the name of the buyer, also, when the goods were handed over to the transporters, later issued the lorry receipts/consignment notes mentioning the buyer as the consignee. These apparent and admitted facts are sufficient for us to hold that sale of impunged goods had taken place at appellant’s factory gate only.
In view of the Section 19 of the Act, it is clear that in case of sale of specific or ascertained goods, property in those goods gets transferred when the parties intent for so which has to be inferred from the conduct of the parties and terms of the contracts - The transporter had issued consignment notes mentioning the buyer as the consignee. It stands absolutely clear that the intent to transfer the property was at the time of clearance of goods from the appellants/the manufacturer’s premises.
The Hon’ble Supreme Court earlier also in the case of ESCORTS JCB LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-II [2002 (10) TMI 96 - SUPREME COURT] had held that since the sale of goods is at the ex works of the assessee and handing over such goods to the transporter is deemed to be the delivery to the buyer in terms of provisions of Sale of Goods Act, the transaction between the assesse and its buyer got completed at the factory gate of the assessee and the place of removal would be the factory premises only. Based on these observations, the freight as well as transit insurance amount shown and charged separately in the invoices is held to not to be includable in the assessable value - Thus, it has been categorically held by Hon’ble Supreme Court that buyer’s premises can never be the place of removal, hence, the freight charged separately in the invoices is not includable in the assessable value for the payment of excise duty.
Inclusion of cost of insurance - HELD THAT:- The order under challenge has wrongly held that the freight and insurance charges are includable in the assessable value. Learned adjudicating authority has absolutely ignored Rule 5 of Determination of Value Rules which makes it clear that when goods are sold for delivery at a place other than place of removal transaction value of excisable goods shall not include actual cost for transportation from the place of removal up to the place of delivery of such excisable goods - Hence cost of transportation/ freight has to be deducted from the assessable value.
Extended period fo limitation - HELD THAT:- The demand for the entire period which includes one month of extended period of limitation has wrongly been confirmed. The order under challenge has wrongly held that the freight and insurance charges are includable in the assessable value.
The order in appeal/ order under challenge is hereby ordered to be set aside. Consequent thereto, the appeal stands allowed.
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2024 (6) TMI 375
Demand of differential duty with interest and penalty - value of power units supplied by M/s. AVTEC to the appellant was undervalued which was due to the reason that the appellant had undervalued the components supplied by them to M/s. AVTEC - HELD THAT:- As regards the submission made by the Ld. Counsel that they were not required to pay duty had they adopted the procedure provided under Rule 4(5)(a) of CCR.The same cannot be accepted as the appellant had themselves chosen to follow the procedure under Rule 3(5) of CCR and pay duty on clearance of inputs and instead of getting the goods manufactured on job work basis they had placed a purchase order on their suppliers.
As both the provisions had their own set of conditions and manners of payment of duty to be followed, their claim that duty and consequently interest was not required to be paid if they had followed the procedure under Rule 4(5)(a) of CCR, cannot be accepted.
Interest - HELD THAT:- As far as the recalculation of interest by the department is concerned, it is found that interest recalculated will directly be a direct consequence of re-determination of duty from date of clearance from September 2003 to 31.03.2006 instead of 01.04.2004 to 31.03.2006 as determined by the appellant. Re-determination of duty for the period 01.09.2003 to 31.03.2006 will clearly be hit by the embargo of limitation period of maximum five years under Section 11A even in the case of fraud, willful misstatement etc. It is not a case of merely short payment of interest on the differential duty paid by the appellant but it amounts to re- determination of duty by the appellant which is hit by time limitation.
Penalty imposed upon the appellant under Section 11AC - HELD THAT:- The same cannot be sustained as the imposition of penalty under Section 11AC is subject to determination of duty under Section 11A. As no duty under Section 11A has been determined in the impugned order, a penalty under Section 11AC cannot be imposed and therefore the imposition of penalty under Section 11AC of Central Excise Act without determination of duty is legally not sustainable.
The Hon’ble Apex Court in UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT] has held that the penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in Section 11AC.
Appeal allowed.
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2024 (6) TMI 374
Clandestine removal without preparing proper invoices/bills - cross–examination of the witnesses not allowed - demand based on presumption and assumption - HELD THAT:- It is evident on the face of the record that duty demand was confirmed by the Learned Commissioner on the basis of entries and records available in diary seized as per Sr. No. 13 of Annexure–A to Panchanama which is admittedly not written by any of the partners but by Shri Triloki, ex-employee of Appellant. On plain reading of the statement of Shri Triloki dated 04.09.2012 we find that in reply to question No. 10 he stated that the data mentioned in Book No. 8,9,12 & 14 are of the orders received from the customers and the details of Book No. 13 are the details which were dictated by Shri Sureshbhai.
The details recorded in the dairies were only showing type of machines and number of machines. The said diaries nowhere shown the details of transaction value, rate, details of buyers, details of transporter etc.. The entries made in the said diaries may create a doubt but it cannot take place of evidence. Merely on the basis of said diaries, or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who were not even permitted to be cross-examined, demand of clandestine removal of the goods is not sustainable. The clandestine manufacture and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidences - in the instant case, no such clinching or corroborative evidences to the effect have been brought on record. In the absence of corroborative evidence, on the fact in the present case “the charge of clandestine clearance” cannot be leveled against the assessee.
The allegation of clandestine removal is also based on the computer printouts seized at Serial No. 1 of the Annexure–A to Panchnama dated 09.08.2011 containing certain details of sale transaction, outstanding amount etc. - As per the Section 36B of the Act one of the conditions for the computer printout to be an admissible evidence is that the said printout should have been produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly over that period by the person having lawful control over the use of the computer - the Learned Commissioner has not examined these aspects. Therefore, such computer printouts are not eligible to be used as evidence.
The evidences produced by the Revenue for sustaining the duty demand has not been corroborated by detailed investigation. The allegation of clandestine manufacture and clearance cannot be sustained on the basis of such flimsy evidences - the impugned order is set aside - appeal allowed.
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2024 (6) TMI 373
Valuation of Excise duty - inclusion of freight charges collected by the appellant from the customers in the course of sale of excisable goods, in the assessable value of goods sold for the purpose of Section 4 of Central Excise Act, 1944 - levy of penalty.
Whether in case of ex-factory sale the freight charges collected separately over and above the sale price of the goods in the invoice from the customers is includible in the assessable value of the goods? - HELD THAT:- It is found that on this issue much water has flown and consistently held by the various decisions of the Tribunal and the landmark judgement of Hon’ble Supreme Court in the case of M/S ISPAT INDUSTRIES LTD. that in case of ex-factory sale the freight charges collected from the customers over and above the sale price is not includible in the assessable value.
Reliance placed inthe decisions of this Tribunal in the case of Sayaji Senthness Ltd [2024 (5) TMI 194 - CESTAT AHMEDABAD] where this Tribunal held 'freight and/or insurance is not includable in the assessable value.'
From the above decision it can be seen that this Tribunal considered the various judgements which are also referred by the appellant. Tribunal has decided that the freight charges is not includible in the assessable value.
The impugned order is set aside - appeal allowed.
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2024 (6) TMI 372
Availmant of improper CENVAT credit - input, pig iron - goods not received in the factory - credit availed on the strength of invoices alone without actual receipt of goods into the factory - HELD THAT:- There is no dispute regarding the duty-paid character of the inputs. The respondent is a manufacturer of non-alloy ingots, for which pig iron is one of the major inputs. The respondent has transported the inputs procured from IISCO, Burnpur by railway wagons and thereafter, by trucks, to their factory at Durgapur. Verification conducted by the ld. adjudicating authority through the Superintendent, Anti-Evasion, indicates that there was no evidence available on the record to show that the respondent had diverted the said inputs without using the same in their factory for manufacture of the excisable goods.
There is no evidence available on record to establish that the goods had not been received into the factory of the respondent - In the absence of any evidence to substantiate the allegation that the respondent has not received the inputs in the factory, the CENVAT Credit availed by the respondent cannot be denied, on the basis of mere assumptions and presumptions.
It is observed that the ld. adjudicating authority has given a well-reasoned finding to allow the credit. The Department could not bring in any evidence to contradict the findings of the ld. adjudicating authority. Accordingly, there are no infirmity in the impugned order and hence the impugned order passed by the Ld. Commissioner is upheld.
The appeal filed by the Revenue is rejected.
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2024 (6) TMI 371
Scope of SCN - Classification of goods - by-products such as hard pitch, extra hard pitch, soft pitch, total pitch and pitch creosote mixture (‘PCM’) - to be classified as bye products under Chapter Heading 2706 of Central Excise Tariff Act, 1985 or under subheading 2708.11 for certain products - contention of the appellant (department) in the grounds of appeal is that the impugned order does not bring on record the duty paid by the Respondent on hard pitch, extra hard pitch, soft pitch and total pitch in terms of the classification held by the Hon’ble Supreme Court, viz. tariff subheading 2708.11 - HELD THAT:- It is the settled principle of law that an order cannot be passed travelling beyond the scope of the SCN inasmuch as the SCN lays down the foundation of adjudication proceedings and if the charges are not brought out properly to the knowledge of the assessee, then he should not face charges by any order passed beyond the facts contained in the SCN. Any infirmity in the SCN cannot be bridged by the adjudication or appellate authority.
The adjudicating authority has correctly quantified the duty payable in the impugned order passed pursuant to remand directions. Accordingly, there is no infirmity in the impugned order - appeal filed by the Revenue is dismissed.
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