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Central Excise - Case Laws
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2024 (6) TMI 370
Methodology for final assessment of provisional assessments - Best judgement assessment - finalizing the provisional assessment on ‘Best Judgement’ method without considering the methodology already accepted by the Department, CA certificate and the calculation sheet duly certified by the Chartered Accountant - suppresstion of facts or not - Extended period of limitation.
Methodology for final assessment of provisional assessments - HELD THAT:- The appellant has initially adopted the clearance provisionally and thereafter, worked out a formula for final assessment, which has been approved. On the basis of said formula, the appellant filed a certificate issued by the Chartered Accountant duly certifying the assessable value arrived, on the basis of methodology adopted for the earlier period, and sought final assessment. The ld. adjudicating authority sought to verify all the invoices along with related documents.
As the certificate issued by Chartered Accountant, verifying the details and examining the documents, has been issued, the same cannot be discarded by the ld. adjudicating authority. Without assigning any reason. Therefore, the CA certificate is an acceptable document for finalization of provisional assessment is to be done in terms of the certificate issued by Chartered Accountant for the impugned period.
Extended period of limitation - Suppresstion of facts or not - HELD THAT:- While remanding the matter, the Ld. Commissioner (Appeals) has made the observation that to revise the terms of finalization of provisional assessment, a Show Cause Notice is required to be issued. The said order was passed by the Ld. Commissioner (Appeals) on 21-08-2009, but the Show Cause Notice has been issued on 21-11-2011 which is beyond the normal period of limitation. As the appellant has not suppressed any fact or details from the Department, therefore the Show Cause Notice issued for the extended period of limitation is not sustainable at all.
There are no merit in the impugned order and accordingly, the same is set aside - appeal allowed.
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2024 (6) TMI 344
Requirement of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 - appellant have made the pre-deposit by way of input tax credit through GST Electronic Credit Ledger - Applicability of Amended Section 41 of CGST Act, 2017.
Mandatory pre-deposit - HELD THAT:- From the Circular No. CBIC-20010/16/2023-GST dated 24.11.2023 it is found that the controversy stands settled that payments made through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposits under Section 35F of CEA and Section 83 of FA and in the event the same have been so deposited, the appellants can claim refund of the said amount.
Referring to the decision of the Supreme Court in COMMR. OF C. EX., BANGALORE VERSUS MYSORE ELECTRICALS INDUSTRIES LTD. [2006 (11) TMI 202 - SUPREME COURT], wherein it has been held that the beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively and since the said circular has been issued after the filing of the appeals, the enforcement of the same can only have prospective effect and therefore, the pre-deposit made by the appellants from electronic credit ledger are in compliance to Section 35F of CEA - that decision of the Bombay Bench in SAPPHIRE CABLES & SERVICES PVT. LTD. VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, BELAPUR [2023 (9) TMI 1482 - CESTAT MUMBAI] is not applicable as the circular was held to be inapplicable since it was issued after the filing of the appeal and hence, has to operate prospectively.
Applicability of Amended Section 41 of CGST Act, 2017 - HELD THAT:- There are no merit in the submissions made by the learned counsel for the appellant that the amended provisions of Section 41 of the CGST, where the phrase that credit shall be utilized ‘only for’ self-assessed output tax is no longer existing and therefore, there is no restriction on the utilization of the credit. The scheme for utilization of the credit for making pre-deposits under Section 35F of CEA has to be understood in the light of the Circular dated 28.10.2022 which has also been accepted by the Mumbai Bench in SODEXO INDIA SERVICES PVT. LTD. VERSUS THE UNION OF INDIA AND ORS. [2022 (10) TMI 264 - BOMBAY HIGH COURT].
In view of the decisions referred and also the circulars issued by the CBIC, specifically clarifying on the issue of pre-deposit payment method for the cases pertaining to the Central Excise Act and the Service Tax, the deposit made by the appellants towards pre-deposit under Section 35F of CEA by way of ECL cannot be accepted and the appellant is directed to cure the defects by making the pre-deposit in accordance with law within a period of 4 weeks from the date of the order.
Appeal dismissed.
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2024 (6) TMI 300
Scope of SCN - invocation of the provisions of the Customs N/N. 21/2002 at the adjudication stage which were not cited in the SCN - goods supplied against International Competitive Bidding - benefit of Sr. No. 91 of Notification No. 6/2006-CE and Sr. No. 336 of notification no. 12/2012-CE denied - non-observance of the condition with respect to furnishing of undertaking by the Chief Executive Officer - Failure to produce the requisite certificate to the Deputy Commissioner of Central Excise.
Scope of SCN - HELD THAT:- Invoking of the provisions of the Customs N/N. 21/2002 at the adjudication stage which were not cited in the show cause notice was clearly beyond the scope of SCN as rightly contended by the Ld. Counsel of the appellant and further the argument of the Ld. Counsel is agreed upon that the provisions of the Custom notification no. 21/2002 cannot be applied to the appellant who is not the importer of the goods. Therefore, the benefit of Sr. No. 91 of Notification No. 6/2006-CE and Sr. No. 336 of notification no. 12/2012-CE could not be denied to them as the goods were duly certified by the jurisdictional Assistant Commissioner to the effect that all the invoices were for the goods supplied against International Competitive Bidding.
Non-observance of the condition with respect to furnishing of undertaking by the Chief Executive Officer - HELD THAT:- In view of the categorical findings of the Jurisdictional Assistant Commissioner that the genuineness of the quantum of the claim of the appellant on the verification of the invoices is not disputed and the appellant was duly in possession of the requisite certificate from the Chief Engineer in the Central Electricity Authority, copy of which was also marked to the department, it is found that the appellant had substantially complied with the provisions of the relevant notification and mere non-submission of undertaking was only a procedural infringement and substantial benefit cannot be decided merely for a bonafide procedural lapse whereas the provisions of the notification were otherwise fully complied substantially by the appellant - thus, no demand is sustainable against the appellant under Sr. No. 91 of Notification 6/2006-CE and Sr. No. 91A of Notf. 6/2006-CE as amended by Notf. 46/2008 as well as notification 12/2012-CE.
Failure to produce the requisite certificate to the Deputy Commissioner of Central Excise issued by the Deputy Secretary to the Government of India in the Ministry of Non-Conventional Energy Sources/ Ministry of New and Renewable Energy as well as an undertaking that the goods will be used only in the said project and not for any other use - HELD THAT:- It is found that the copy of the requisite certificate has been supplied by the Ministry directly to the department this fact has not been disputed by the department. Further, it is also not disputed that the invoices were issued according to the project Certificate. Once these conditions are satisfied, merely that the requisite certificate was not furnished by the appellant is merely procedural. Further, the purpose of required undertaking was merely to ensure that the exemption is not being misused. Once the genuineness of the invoices has been verified and found to be justify the quantum of claim of the appellant as verified by the Jurisdictional assistant Commissioner, the non-submission of undertaking by the appellant is merely procedural and the appellant should not be denied the substantial benefit merely for procedural lapse.
There was a substantial compliance of the provisions of the exemption notifications under reference and the substantial benefit could not be denied merely for procedural lapse - The impugned order is set aside - appeal allowed.
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2024 (6) TMI 299
Clandestine removal - shortage of stock - penalty imposed on the Company and Director - HELD THAT:- There are force in the argument of the Learned Counsel that while shortage was detected and was also accepted by the Appellant Company, the Department has not alleged as to when these stocks could have been dispatched clandestinely so as to attract interest for the intervening period. The stock taking was conducted on 24/11/2015 and 25/11/2015. The Appellant has paid the Excise Duty on 25/11/2015 in respect of the shortage found. Therefore, there is no provision to demand the interest from the Appellant Company for the already paid Excise Duty. Hence, the interest demanded under the impugned order is set aside.
Penalty on appellant company - HELD THAT:- Since they could not avail the benefit of the 25% of the penalty earlier, now they are given the option to pay the penalty @ 25% of 3,46,438/-. They should pay the revised penalty amount by 31st July 2024.
Penalty on the Director - HELD THAT:- The Department has not made out any specific case against the Director to implicate him for the shortages found. As can be seen from the recorded statement of Mr. Subrata Goswami, it is seen that he is taking care of day to day activities of the company. Therefore, there are no justification imposing penalty on the Director and the same stands set aside.
Appeal allowed in part.
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2024 (6) TMI 298
Clandestine removal - refund of amount paid under protest - HELD THAT:- It is found that initially demand of duty amounting to Rs. 46,96,664/- along with interest and penalty was confirmed by both the authorities below against which the appellant filed the appeal and the Tribunal vide order dated 24.08.2016 allowed the appeal of the appellant with consequential relief. It is a fact that during the investigation, the appellant deposited Rs. 15,45,000/- and after the decision of the Tribunal filed a refund claim which was sanctioned but thereafter a show cause notice dated 18.05.2017 was issued proposing to recover the erroneous refund of Rs. 15,45,000/-.
The appellant paid the duty amouting to Rs. 46,97,000/- under protest by debiting the Cenvat credit account in order to avoid interest liability in future if the department succeeds before the Hon’ble High Court of Punjab and Haryana - Subsequently, the department on 20.09.2018 withdrew its appeal on monetary grounds and the appellant after the withdrawal of the appeal by the department filed the refund claim which was rejected wrongly by both the authorities, by observing that the appellant had debited Cenvat credit account just to encash the same.
Once, the decision of the Tribunal attained finality the appellant is entitled to claim refund Rs. 46,97,000/- which was deposited by him under protest by debiting RG-23A.
The appellant is entitled to refund of Rs. 46,97,000/- on the basis of the order passed by the Tribunal dated 24.08.2016; therefore, the impugned order is set aside - appeal allowed.
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2024 (6) TMI 297
100% EOU - refund of excess duty alongwith interest - additional amount of duty was deposited as per the demand raised by the department which was found as not correct - Payment of additional duty under protest or not - Rejection of refund claim on the ground that appellant have not challenged the letter / communication - HELD THAT:- The factum, payment of duty of interest either on the basis of the communication dated 30.07.2009 received from the Department and on the basis of self assessment is not in dispute. It is also not in dispute that the said assessment which has been made resulting in payment of this duty has never been challenged before any Appellate Authority and the said order of assessment has been set aside.
In view of the above decision of Hon’ble Apex Court in the case of ITC Ltd [2019 (9) TMI 802 - SUPREME COURT] provisions of refund contained in the Section 27 of Customs Act and Section 11B of Central Excise Act are only executionary in nature and cannot result in setting aside or modifying the assessment orders (both on direction of the Department or self assessment). In these proceedings, if these assessment orders are to be modified then resort should have been taken to the appellate proceedings as provided in law - The order of Appellate Authority to the extent whereby he has held that appellant having not challenged this letter dated 30th July, 2009 by way of appeal cannot claim refund of duties paid by way of proceeding under Section 27 of Custom Act,1962 or Section 11B of Central Excise Act, 1944.
In case of Mafatlal Industries [1996 (12) TMI 50 - SUPREME COURT] it was held that 'We respectfully agree with the above propositions and hold that the said principles apply with equal force in the case of both the Central Excises and Salt Act and the Customs Act. Once this is so, it is un- understandable how an assessment/adjudication made under the Act levying or affirming the duty can be ignored because some years later another view of law is taken by another court in another person’s case. Nor is there any provision in the Act for re-opening the concluded proceedings on the aforesaid basis.'
There are no merits in this appeal - appeal dismissed.
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2024 (6) TMI 296
Liability to pay an amount equal to 5%/ 10% of the value of the exempted goods under the Rule 6 (i) of Cenvat Credit Rules, 2004 - non-maintenance of separate records - proportionate credit in terms of Rule 6(3A) of Cenvat Credit Rules, 2004 reversed - interest in case of delay also paid - HELD THAT:- There is no dispute that the appellant have paid the proportionate credit in respect of the exempted goods in terms of 6(3A) of Cenvat Credit Rules,2004 along with the interest wherever there is a delay. Therefore, as per the settled legal position in various judgments particularly in the case of appellant vide Tribunal’sOrder No. A/10312/2022 dated 05/04/2022 [2022 (4) TMI 475 - CESTAT AHMEDABAD] the demand is not sustainable.
In view of the above order coupled with a catena of judgments, whereby, it was consistently held that when proportionate Cenvat Credit attributed to exempted goods has been reversed and interest was also paid in case of delay in reversal, the demand of 5%/ 10% in terms of Rule 6(3)(i) of Cenvat Credit Rules will not sustain. Therefore, following the juridical decision in various judgments and also on the judgment in the above order of Tribunal in the appellant’s own case the proposal of present demand in show cause notice is not sustainable.
The impugned order passed by the Adjudicating Authority is proper and legal which does not require any interference - appeal of Revenue dismissed.
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2024 (6) TMI 295
Recovery of erroneous refund of the duty paid in PLA - no substantial expansion exceeding 25% of installed capacity - Suppression of Facts - No expansion of critical machineries related to the installed capacity - Wrong assessment of the installed capacity - period July 2008 to October 2008, February 2009 and April 2009 to July 2009 ( upto 07.07.2009).
Substantial expansion of the Appellant unit - HELD THAT:- The issue of substantial expansion of the Appellant unit has already been adjudicated by the Ld. Commissioner of Central Excise in COMMR. OF C. EX., DIBRUGARH VERSUS HINDUSTAN COCA COLA BEVERAGES (P) LTD. [2005 (1) TMI 504 - CESTAT, KOLKATA], against which the Revenue filed an appeal before this Tribunal. This Tribunal vide order dated 20th January, 2005, rejected the appeal of the Revenue. Therefore, raising the issue of substantial expansion again by the Ld. Commissioner (Appeal) is bad in law which has attained finality.
In the impugned order, the Ld. Commissioner (Appeals) has gone beyond the scope of the appeal and held that the appellant has not fulfilled the condition of substantial expansion. It is observed that this issue was not before the Ld. Commissioner (Appeals). The issue before the Ld. Commissioner (Appeals) was that the refund sanctioned to the appellant for the period in dispute was erroneous or not. However, the Ld. Commissioner (Appeals) has decided the issue of substantial expansion which was not there before him. The issue of substantial expansion has already been decided for the unit in the Tribunal orders.
The same issue against the same unit cannot be raised again, which is against the principle of res judicata - the impugned order is liable to be set aside - Appeal allowed.
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2024 (6) TMI 294
CENVAT Credit - inputs - MS angles, MS channels, MS beams, MS joists, MS plates etc. used in the fabrication of various machineries, support structures, platforms for machineries and equipments etc. used in the factory - Retrospective applicability of the amendment in CENVAT Credit Rules, 2004 - HELD THAT:- Undisputedly, the appellants during the relevant period used the aforesaid inputs in their factory in the fabrication / manufacture of various equipments, machineries, plants etc. and support structures holding the capital goods. The learned Commissioner in the impugned order following the judgment of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] decided the issue against the appellants holding that credit is not admissible on the aforesaid inputs used in the fabrication of various capital items.
Retrospective applicability of the amendment in CENVAT Credit Rules, 2004 - HELD THAT:- The issue is no more res integra and covered by the judgement of Hon’ble Chhattisgarh High Court in M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT], whereunder it is observed that 'Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods'.
The impugned orders are devoid of merit and accordingly the same are set aside - Appeal allowed.
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2024 (6) TMI 246
Availment of CENVAT credit without physically receiving the raw material - limited remand - HELD THAT:- The order of the tribunal dated 09.07.2007 is unambiguous that the matter was remitted back to the Commissioner for reconsideration. There were no strings attached to the remand.
The contention that the Tribunal decided the issues on merits, does not enhance the case of the respondent. The tribunal proceeded to decided the issues on basis that conditions of remand were not complied with and this was bound to effect the conclusions arrived at - The impugned order is set aside and matter is remanded back to the Tribunal to decide the appeal in accordance with law.
Appeal allowed by way of remand.
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2024 (6) TMI 245
CENVAT credit on CVD and SAD components under CENVAT Credit Rules, 2004 - Applicability of Section 142(3) of the CGST Act, 2017 for refund claims - applicability of Doctrine of Necessity.
CENVAT credit on CVD and SAD components under CENVAT Credit Rules, 2004 - HELD THAT:- It is an undisputed position that the fact of filing of ER-1 or TRAN-1 could not have been availed of as ER-1 was required to be filed up to 30.06.2017 and TRAN-1 up to 27.12.2017, by which time the appellant had not even paid the CVD/SAD for which the case for claim of refund. It is, therefore, evident that the said provision could not have been applied too in the present case of the appellant.
The applicability of the Hon’ble Jharkhand High Court’s decision as laid out in the case of M/S RUNGTA MINES LIMITED VERSUS THE COMMISSIONER OF CENTRAL GOODS & SERVICE S TAX AND CENTRAL EXCISE, THE COMMISSIONER (APPEALS) , CENTRAL GOODS & SERVICES TAX AND CENTRAL EXCISE, 2, THE ASST. COMMISSIONER, CENTRAL GOODS & SERVICES TAX AND CENTRAL EXCISE, DIVISION I, JHARKHAND [2022 (2) TMI 934 - JHARKHAND HIGH COURT] has thus been contested by the appellant pointing out that the said case related to the claim of credit on invoices pertaining to a period prior to 30.06.2017, for receipt of services and transfer of credit against such invoices as ITC in GST to TRAN-1 return. Whereas in the present appeal filed by the appellant for refund CVD and SAD as no CENVAT credit could be availed, and as already stated above were made well beyond the said cut of date for filing of ER-1 and TRAN-1 returns.
Applicability of section 142(3) of GST Act, 2017 - HELD THAT:- The question of refund in cash of CVD/SAD paid, on account of in admissibility of CENVAT credit, is now no more res-integra and cash refund of such duties paid utilising the provisions of section 142 have been liberally approved of by various judicial/ quasi-judicial authorities. The Principal Bench of the CESTAT in the case of M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) [2022 (3) TMI 58 - CESTAT NEW DELHI] had observed 'I further find that refund of CVD and SAD in question is allowable, as credit is no longer available under the GST regime, which was however available under the erstwhile regime of Central Excise prior to 30.06.2017. Accordingly, I hold that the appellant is entitled to refund under the provisions of Section 142(3) and (6) of the CGST Act.'
Doctrine of necessity - HELD THAT:- The fact that payment of CVD and SAD subsequently during the GST regime in respect of EPCG authorisation issued in respect of imports made prior to 30.06.2017, by way of regularisation for non-fulfilment of export obligation, the authorities below have erred in rejecting the refund claim of the appellant. The cash refund of CVD and SAD in question is unhindered and rightly merited, as credit is no longer available to them under the GST regime. Moreover, the same is further driven by the ‘Doctrine of Necessity’ in the given circumstances, as the credit of such duty paid is not admissible to the appellant.
No credit is available under the provisions of the law, it is held that the appellant is entitled to refund in terms of the provisions of section 142 (3) and (6) of GST Act - the impugned order is set aside - appeal allowed.
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2024 (6) TMI 244
Time limitation - suppression of facts or not - Classification of goods - “KARA” brand wet wipes - under Chapter Sub-heading 3307.90 of the First Schedule to the Central Excise Tariff Act,1985 as other perfumery, cosmetic or toilet preparations, not elsewhere specified or included or under Tariff Item5603.9200 of the First Schedule to the Central Excise Tariff Act, 1985 as nonwovens, whether or not impregnated, coated, covered or laminated, of man-made filaments weighing more than 25 g/m2but not more than 70 g/m2?
Time Limitation - HELD THAT:- The classification, claim of exemption notification in respect of their product wet wipes was categorically declared before the department. Therefore, there is no suppression of facts on the part of the appellant with intent to evade payment of duty. Moreover, all these facts were on record while conducting EA-3 audit by Central Excise department during March 2014 to October 2014 for the audit period March 2012 to December 2013. The dispute of classification was raised in audit vide Audit Report No. 327/2013-14 dated 10.11.2014 and on that basis further investigation was carried out by Preventive Wing and thereafter the show cause notice came to be issued on 08.08.2018. It is also observed that prior to the aforesaid audit, the appellant have been audited from time to time but no objection was raised on the classification of wet wipes. So, in view of the above facts, there is absolutely no suppression of facts or mis-statement with intent to evade payment of duty on the part of the appellant. Therefore, the demand for the extended period is not sustainable.
It is found that appellant’s case is on much better footing inasmuch as the appellant have time to time declared their changes and claim of exemption notification therefore, the above judgments are directly support the case of the appellant. It is also found that since the appellant have been audited from time to time and no objection was raised, it cannot be said that the appellant have suppressed any fact. The reliance is also placed on the Hon’ble Supreme Court decision in the case of COMMISSIONER OF CENTRAL EXCISE BANGALORE VERSUS M/S. PRAGATHI CONCRETE PRODUCTS (P) LTD. [2015 (8) TMI 1053 - SC ORDER].
There are no doubt that there is no suppression of facts on the part of the appellant. Accordingly, the demand for the extended period is liable to be set-aside on the ground of time-bar. Accordingly, the demand for the extended period is set-aside. For the same reason, penalty corresponding to the duty for the normal period is also set-aside - The department is at liberty to re-quantify the demand of duty for the normal period and since the appellant have already paid the amount of Rs. 40,40,709/- the re-quantified demand amount may be adjusted against the same and remaining amount may be refunded to the appellant in accordance with the law on filing of appropriate refund application by the appellant.
Appeal allowed in part.
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2024 (6) TMI 243
Refund of CENVAT Credit - rejection on the ground of time limitation and failure to file the revised return electronically - Section 11B of the Central Excise Act, 1944 read with Section 142(9)(b) and Section 142(3) of the CGST Act, 1944.
Time Limitation - HELD THAT:- It is pertinent to note that the adjudicating authority found that the refund claim is within time and also held that the appellant is entitled to Cenvat Credit, but rejected the refund only on the ground that revised return was not filed electronically as required under Section 142(9)(b) ibid read with Rule 12(5) of the Central Excise Rules, 2002.
The learned Commissioner (Appeals) in the departmental appeal, has held that the refund was filed beyond the period of limitation because the learned Commissioner (Appeals) has taken 30.06.2017 as the relevant date for the purpose of filing refund claim; whereas, as per Explanation B to the Section 11B ibid the date of debiting of the account is the relevant date and from that date, the appellant has filed the refund claim within one year from the relevant date; and therefore, the refund claim was within time. Thus, the findings of the learned Commissioner (Appeals) are to be set aside.
Failure to file the revised return electronically - HELD THAT:- The appellant could not file the revised return electronically due to certain technical reasons. The appellant filed the revised return manually. It is found that during the period of dispute, a lot of assessees were facing various technical glitches even for filing TRAN-1 and number of petitions were filed before the various Hon’ble High Courts, which allowed filing of TRAN-1 after period of limitation. In the present case, there are no reason that the appellant intentionally did not file the revised return electronically - as per the provisions to Section 142(9)(b) ibid it is not mandatory that revised return is to be filed electronically and the requirement of the law is filing of revised return within time which the appellant, in the present case, has done; therefore, as per Section 142(9)(b) ibid, refund is duly admissible to the appellant, especially when substantial conditions have been fulfilled by the appellant.
The impugned order is not sustainable in law and accordingly, the same is liable to be set aside - Appeal allowed.
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2024 (6) TMI 242
Determination of the assessable value in terms of Section 4 of Central Excise Act read with Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Inclusion of certain expenses which as per the revenue or additional consideration received by the appellant, though not in cash but in the form of benefits made available to the appellant in terms of Rule 6 of the valuation rules - time limitation.
Inclusion of certain expenses which as per the revenue or additional consideration received by the appellant, though not in cash but in the form of benefits made available to the appellant in terms of Rule 6 of the valuation rules - HELD THAT:- The same issue has been considered by the Ahmadabad Bench of this Tribunal in the case of M/S ADANI GAS LTD VERSUS C.C. - AHMEDABAD [2019 (4) TMI 999 - CESTAT AHMEDABAD] placing reliance upon earlier orders, wherein the Bench has observed 'the demand on „Trade Margin‟ confirmed against the Appellant is not sustainable and is required to be set aside.
This decision has been followed by Hyderabad Bench of this Tribunal in case of BHAGYANAGAR GAS LTD VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, GUNTUR [2023 (11) TMI 1165 - CESTAT HYDERABAD] where it was held that 'The Court below has erred in drawing adverse inferences as the word ‘commission’ has been used instead of the word ‘profit-margin’. Further, no adverse inferences can be drawn as the RSP is fixed by the Appellant, which is a PSU and CNG being a sensitive product touching the life of common man, in various aspects.'
There are no merits in the impugned order and the same is set aside - appeal allowed.
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2024 (6) TMI 241
Price variation clause - differential duty on goods cleared from their factory, by revision of assessable value taking recourse to rule 8 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - challenge against re-assessment under section 11A of Central Excise Act, 1944 - HELD THAT:- There is no doubt that clearances were effected to themselves and, therefore, it is the conformity of the invoice value to the relevant provision in Central Excise (Determination of Price of Excisable Goods) Rules, 2000 that needs to be ascertained. According to Learned Counsel, rule 8 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000, by recourse to proviso in rule 9 therein, is intended to be invoked only when the entire clearances are so effected. This fact, though brought before the lower authorities, did not appear to have impressed them in the absence of any legal authority for the claim.
While the decision of the Tribunal in COMMISSIONER OF CENTRAL EXCISE, AURANGABAD VERSUS STERLITE OPTICAL TECHNOLOGIES LTD. [2017 (10) TMI 209 - CESTAT MUMBAI] had been rendered after the impugned order was issued, that in re Ispat Industries Ltd and in COMMISSIONER OF CENTRAL EXCISE, JALLANDHAR VERSUS MAX INDIA LTD. [2008 (5) TMI 214 - CESTAT NEW DELHI] were available even when the dispute came up for adjudication. The lower authorities cannot be faulted for not having been convinced that, in the absence of judicial affirmation, the stand of the assessee did not bind them.
Thus, it would be appropriate for the matter to be decided afresh by the first appellate authority for which purpose we set aside the impugned order - Appeal is allowed by way of remand to Commissioner of Central Excise (Appeals).
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2024 (6) TMI 240
Valuation - Tax waiver by the state government, warrants deeming the waived amount as additional consideration for clearances or not - non-discharge of duty liability on the retained amount - HELD THAT:- The scheme of the Government of Goa, for deferment of sales tax to be accumulated by ‘dealer’ and paid to the exchequer at the end of the specified period – in effect a temporary accommodation of cash flow by the state government - was modified to permit immediate discharge thereof to the extent of ‘net present value (NPV)’ of the accumulated amount to be deemed as discharged at end of the specified period. We find from the mandate of section 4 of Central Excise Act, 1944 that ‘transaction value’, which has been defined to include any amount that the buyer was liable to pay the assesse in connection with the sale and expressly excluding duties of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods, is the ‘assessable value’ for computation of duty. Such exclusion ensured that excise duty on the goods, as well as ‘value added tax (VAT)’ or any other similar tax levied and collected by state government, would not be further burdened with duties of excise merely by inclusion in the ‘cum-tax’ ‘transaction value’ of goods.
Under the rubric of the deferment scheme itself, the appellant, though enabled to retain sales tax for a time, was afforded option to discharge that liability immediately instead of at the end of the period by discharging ‘net present value (NPV)’ of the accumulated tax. Effectively, this was tantamount to ‘post-sale’ exemption and, hence deductible in full at time and place of removal to conform with ‘transaction value’.
In the scheme of Government of Maharashtra, which was cause of similar dispute before the Tribunal, it was taken note off, in re Uttam Galva Steels Ltd [2015 (10) TMI 1727 - CESTAT MUMBAI], that the deferment scheme of 1993 had, upon truncating of dues to ‘net present value’ of the accumulated amount in 2002 differed from that dealt with in re Super Synotex (India) Ltd and in re Maruti Suzuki India Ltd [2014 (9) TMI 229 - SUPREME COURT] by the Hon’ble Supreme Court and held that such distinguishment of facts rendered the decision in re Super Synotex (India) Ltd, that relied on the legislative intent of ‘actually paid’ vis-à-vis ‘actually payable’, to not apply.
The impugned order set aside - appeal allowed.
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2024 (6) TMI 239
Admissibility of refund of education cess and higher education cess along with central excise duty in terms of N/N. 56/2002-CE dated 14.11.2002 as amended - HELD THAT:- The appellant is registered in the state of Jammu & Kashmir and were availing benefit of area based exemption under Notification No. 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 utilises 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.
The above said issue is no more res-integra and stands finally decided by the decision of the Hon'ble Supreme Court in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA & OTHERS [2019 (12) TMI 286 - SUPREME COURT] wherein the Hon'ble Apex Court, after considering the provisions of N/N. 71/2003-CE dated 09.09.2003 has held that a notification has to be issued for providing exemption under the said source of power and that in the absence of notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted.
By following the ratio of the decision in the case of M/s Unicorn Industries, it is opined that there is no infirmity in the impugned order vide which the refund of the education cess and higher secondary education cess has been denied.
The impugned order is upheld - appeal dismissed.
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2024 (6) TMI 185
Exception to the requirement of pre-deposit as contained in Section 35F of the Central Excise Act, 1944 which is applicable to Service Tax also - petitioner's contention is that in his bank accounts, a paltry sum is lying and therefore, he is not in a position to fulfill the requirements of Section 35F of the Act - HELD THAT:- Since the provision contained in Section 35F as is effective from 06.08.2014, makes only two exceptions namely that the extent of pre-deposit shall not exceed rupees ten crores and that the provisions of this Section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014, no third exception can be carved out on the basis of repealed provisions of the said Act, therefore, the request of the petitioner to waive requirement of pre-deposit and for permission to file an application for waiver before the Appellate Tribunal, fails and is dismissed.
In view of the amended provisions contained in Section 35F of the Central Excise Act, 1944, it is held that amended provision being not parimateria to earlier provisions as were existing prior to 06.08.2014 will not have any application to the cases originating from the proceedings after 06.08.2014.
Accordingly, the petition fails and is dismissed.
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2024 (6) TMI 184
Recovery of excise duty - benefit of exemption under notification dated 28.02.1993 denied - levy of penalty as well - demand u/s 11A of the Central Excise Act - HELD THAT:- As per the notification providing for full exemption on concessional rate of duty, it has been provided that the said notification shall apply on the aggregate value of clearance of all the excisable goods for whom consumption only in circumstances other than where a manufacturer has one or more factories and from any factory by one or more manufacturer, exceeds Rs. 200 lacs in preceding financial year, the same was increased w.e.f. 01.04.1995 to Rs. 300 lacs vide notification dated 16.03.1995 - the notification would only be granting exemption in the cases where the manufacturers have cleared overall amount less than Rs. 200 lacs/300 lacs as the case may be. If the production from different factories and clearance is altogether more than the said amount, the exemption cannot be allowed.
Both the Appellate Authorities are agreed upon to conclude that infact the Jaybee Industries consisting of N. K. Aggarwal and Pardeep Aggarwal as partners was a single partnership firm having two factories one at Bathinda and another at Panchkula and, therefore, they were required to include the factories of goods from both the units and the exemption could not have been claimed on the said basis and the recovery of non-payment of duty for the period from July 1994 to May, 1995 is found to be correct and in order.
Applicability of Section 11 A - HELD THAT:- The same has not been raised at the stage of appeal below and the same could not be taken up in appeal at present.
Appeal dismissed.
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2024 (6) TMI 183
Recovery of CENVAT Credit - dropping of proposal for recovery of credit under CENVAT Credit Rules, 2004 on procurement of duty-paid goods for export under advance license scheme of FTP.
The adjudicating authority held that credit was not to be denied merely for not having taken recourse to the privilege of using inputs that were not burdened with duties of central excise and that duty paid on clearance of ‘diethylene glycol’ could be taken as credit under rule 3 of CENVAT Credit Rules, 2004.
HELD THAT:- That the impugned goods are excisable is not in dispute and yet the reviewing authority avers that these are exempted from duties of central excise and, therefore, bereft of option to pay duty on clearance. Doubtlessly, export promotion schemes in the Foreign Trade Policy (FTP) envisage exemption from duties on procurement and the ‘advance licence/authorization scheme’, too, is no exception though such exemption is limited to imported goods only and under Customs Act, 1962. There are no authority that empowers central excise formations to enforce notifications issued under Customs Act, 1962 in furtherance of such schemes. The flexibility afforded to holders of ‘advance licence/authorization’ for import substitution, with substantially the same exemptions, does not flow from a parallel notification – actual or deemed – in relation to duties of central excise but from a general facilitation for all exports – under schemes or otherwise – to ‘detax’ export price in rule 19 of Central Excise Rules, 2001.
The reviewing authority did misconstrue the source of exemption from duties of central excise as a notification to which said proviso is attached for mandatory availment that a notification under rule 19 of Central Excise Rules, 2001 does not.
With the twin pillars on which the appeal of Commissioner of Central Excise, Belapur, at the instance of Committee of Chief Commissioners, rested having been broken, the relief sought in this appeal does not have any legal basis.
Appeal dismissed.
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