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Central Excise - Case Laws
Showing 761 to 780 of 81330 Records
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2024 (5) TMI 1194
Scope of SCN - Extended period of Limitation - process of manufacture was not disclosed and that it came to the knowledge of the Department only when the officers visited the premises of the Appellant - around half of the processes undertaken were by machinery and were not manual, which was never the case made out in the SCN - suppression of facts or not - HELD THAT:- When the issue is to be decided in this appeal is not with reference to valuation per se but with reference to the validity of the show-cause notice the order-in-original as well as the decision of the Tribunal, this Court is not precluded from entertaining this appeal as the grounds canvassed before the adjudicating authority as well as the Tribunal was not on the valuation issue per se but with regard to the scope of the show cause notice, whether the extended period of limitation could have been invoked and the correctness of the decision arrived at by the adjudicating authority. Therefore, this appeal is maintainable before this Court.
In no uncertain terms, the appellant/assessee informed the department that they will be availing exemption under notification dated 10.02.1986 in respect to the products manufactured by them, which are handicrafts in the light of the circular issued by the Board. On receipt of the said communication, the department addressed a letter to the appellant/assessee dated 25.03.2004 seeking certain clarification as regards applicability of the circular issued by the Board. The assessee by reply dated 13.04.2004 set out in detail as to how their stand taken in their letter dated 16.03.2004 was justified. There was no further response from the department and the assessee appears to have been availing the benefit of the exemption notification.
However, on a perusal of the order-in-original dated 29.01.2007, it is seen that adjudicating authority proceeded beyond the scope of show-cause notice. In fact, the allegations contained in the show-cause notice have not been the basis for the decision arrived at and the decision was solely based upon an inspection stated to have been conducted in the business premises of the assessee that to after the reply was submitted by the assessee.
Extended period of limitation - suppression of facts or not - HELD THAT:- The department should have material to come to a conclusion that there has been a misdeclaration or a willful misstatement which should be coupled with the intention to evade payment of duty. In the absence of material to establish the same, would not entitle the department to invoke the extended period of limitation. In other words, mere use of these expressions would not be sufficient as there should be material available with the department which should be manifest in the show cause notice as to how in the prima facie view of the department there was misdeclaration, misstatement with intention to evade payment of duty. This being conspicuously absent, it has to be necessarily held that the department could not have been invoked the extended period of limitation.
The order passed by the learned Tribunal as well as the adjudicating authority and the show-cause notice are set aside and the substantial questions of law are answered in favour of the appellant/assessee - Appeal allowed.
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2024 (5) TMI 1193
Interpretation of statute - section 2(f) of the Central Excise Act, 1944 - activities incidental and ancillary to completion of manufacture of products - levy of penalty - HELD THAT:- The assessee was able to explain before the learned Tribunal by placing voluminous records which have been taken note of by the learned Tribunal and carefully appreciated. The learned Tribunal, has referred to in detail the documents and records which were placed before the learned Tribunal by the respondents to establish their cases.
The learned Tribunal proceeded to deal with the crucial issues of the matter, namely co-relatable purchases and sales; duty paid on purchases; job work; testing at third party premises; demand on sale of materials to private parties and sale of wires, channels, angles etc. and non-existence of alleged four suppliers; physical movement of goods.
The learned Tribunal has allowed the respondents’ appeals on appreciation and re-appreciation of all the documents placed before it which admittedly were voluminous.
Appeal dismissed.
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2024 (5) TMI 1192
Clandestine removal of several metric tons of wire rods - Levy of penalty u/r 26 of the Central Excise Rules, 2002 - corroborative evidences or not - not holding any exercisable goods as confiscable under the Central Excise Act, 1944 or Rules made thereunder - failure to arrive at specific finding about the prior knowledge and/or reasons to believe about confiscable nature of any exercisable goods under the Central Excise Act, 1944 - Failure of the Tribunal to follow its own previous order in a similar case M/s. Jai Balaji Industries Limited v. Commissioner of CGST and CX, Bolpur Commissionerate [2020 (11) TMI 549 - CESTAT KOLKATA] - rule of judicial discipline - onus to prove the allegation.
HELD THAT:- The show-cause notice was issued to the appellant pursuant to investigation being carried out at the premises of SPRML, which has ultimately led to the imposition of penalty which has been confirmed by the appellate authority as well as the Tribunal. In this appeal filed under Section 35G the Court is required to consider as to whether any substantial questions of law arises for consideration. While doing so, the Court will also have to consider as to what would be the effect of the decision of the learned Tribunal in the case of Jai Balaji Industries Limited [2020 (11) TMI 549 - CESTAT KOLKATA] on which heavy reliance was placed by the learned Advocate for the appellant and also on the ground that the said order of the Tribunal has attained finality in favour of those assesses and there are other similar orders where the assesses who have alleged to be involved with SPRML were all successful before the Tribunal.
Further the appellant furnished the details of brokers and transporters of SPRML through whom such deals were facilitated. There are other voluntary statements recorded from the brokers Narender Agarwal and Surender Kumar Jain. The tribunal after referring to Rule 26 of the Central Excise Rules, 2002 observed that it is an admitted position that the assessee in their statement which has not been retracted, admitted that they had procured wire rods without cover of duty paid invoices from SPRML which was evident and established from the computerized ledgers which were seized by the department. The learned tribunal posed a question to itself as to whether the appellant can be held liable on the basis of the statement tendered by the co-accused - on facts the tribunal held that penalty was imposed on the assessee not solely based upon any statement of the co-accused but along with the statement of the proprietor of the appellant as well as the other records much of which are computerized records where the dates and other details cannot be altered.
The appellate authority has re-appreciated the factual position, apart from other things noted that the proprietor of the appellant was confronted with the computerized ledger account maintained for the relevant period and he was asked to produce the relevant purchase invoices as reflected in the computerized ledger however, he failed to produce any invoice for the relevant period. The proprietor had no details of the total quantity of MS wire rods purchased during the relevant period, payment for which has been made in cash in the Kolkata office of the SPRML through brokers.
The Commissioner Appeals also considered the plea of retraction raised by the appellant at the appellate stage and, noted that such a plea of retraction made after three years and nine months after the statement was recorded that too in the grounds of appeal filed within the year 2018 cannot in any manner dilute the veracity of the voluntary statement recorded on 11.03.2014 - the alleged retraction in the grounds of appeal filed before the Commissioner after a period of three years and nine months was rightly rejected by the Commissioner of Appeals.
In the facts and circumstances, the appellate authority was right in applying the decision of the Hon’ble Supreme Court in K.I. Pavunny Versus Assistant Collector (HQ) Central Excise Collectorate, Cochin [1997 (2) TMI 97 - SUPREME COURT] wherein it was held that the confessional statement of the accused, if found to be voluntary, can form the sole basis for conviction. Thus, in the absence of any valid retraction, the statement recorded from the proprietor of the appellant was admissible and if that be so, the admitted facts need not be proved.
The learned tribunal has also re-appreciated the factual position and has rendered its findings affirming the view taken by the appellate authority and the adjudicating authority. So far as the decision in the case of Jai Balaji Industries and Others the facts of the case were gone into and the learned tribunal concluded that the department has not attempted to investigate in the direction, they ought to have done to prove the alleged clandestine removal - the decision in the case of Jai Balaji Industries Limited is factually distinguishable and cannot be applied to the facts and circumstances of the case on hand.
The matter is entirely factual and no question of law much less substantial questions of law arises for consideration in this appeal - Appeal dismissed.
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2024 (5) TMI 1191
Recovery of CENVAT Credit - Applicability of Rule 6 of the CENVAT Credit Rules, 2004 to Bagasse and Press Mud - period December , 2016 to June, 2017 - HELD THAT:- The Hon’ble Supreme Court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] has held that In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty.
There are no merits in this appeal filed by the revenue - appeal dismissed.
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2024 (5) TMI 1174
CENVAT Credit - capital goods/inputs - various steel items namely, M.S. Rods, M.S. Channels, Beams, M.S. Plates, Bars, Joints, Beams, Angles, Flats and Flanges falling under Chapter 72 of the Central Excise Tariff Act, 1985 - invocation of extended period of limitation - HELD THAT:- The appellant has been able to show the usage of the said items in fabrication of their capital goods, without which no manufacturing activity can take place. The same is supported by the certificate issued by a Chartered Engineer - during the impugned period, the issue was in dispute as to whether an assessee is entitled to take CENVAT Credit on the above said steel items as inputs or capital goods - the extended period of limitation is not invokable in the facts and circumstances of the present case.
As the appellant has been able to establish that the items in question have been used in the fabrication of their capital goods, in these circumstances, the appellant has correctly availed the CENVAT Credit.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 1148
Quashment of Notification No. 21/2017 CE dated 18.07.2017 vide which Notification No. 1/2010 CE was rescinded - fixation of special rate of actual value addition in respect of goods manufactured and cleared during the period April 2017 to 07.07.2017 - HELD THAT:- The order passed by the Commissioner Central Excise/Central Goods & Services Tax Commissionerate, Jammu (J&K) is appealable, as admitted in the Writ Petition by the petitioner itself, before the CESTAT in terms of Section 35B of the Central Excise Act, 1944 - the remedy prescribed under the Act for any aggrieved person of the order of Commissioner, is an appeal before the CESTAT and without availing such remedy, the petitioner ought not to have rushed to this court with a writ petition.
In yet another case titled CCT., ORISSA AND OTHERS VERSUS INDIAN EXPLOSIVES LTD. [2008 (2) TMI 607 - SUPREME COURT] the Supreme Court took notice of the quashing of show cause notice by the High Court issued against the respondent under the Orissa Sales Tax Act and observed that the High Court had completely ignored the parameters laid down by this Court in a large number of cases relating to exhaustion of alternative remedy.
The submission of learned counsel for the petitioner that the petitioner is not entering into the merits of the case vis-à-vis challenge to the impugned order is belied by the averments of the writ petition itself which unambiguously enter into the merits of the case by highlighting the legal lacunae’s in the order impugned.
The writ petition is held to be not maintainable against the order impugned having been filed without availing the efficacious alternate remedy provided by the Act - the writ petition is dismissed.
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2024 (5) TMI 1147
Classification of goods - Tobacco supplied in retails pack - classifiable under CTH 2401 as claimed by the appellant or 2403 as claimed by the Revenue - invocation of extended period of limitation.
Classification of goods - HELD THAT:- From the comparison of test report in respect of raw material as well as the final product of the appellant, the nature of product remain exactly same except the packing in as much as the packing of raw material is in bulk and packing of final product is in retail pack. Therefore, the nature of raw material i.e. unmanufactured tobacco in cut leaves form remained as such even after repacking into retail pack - Since the product of the appellant remained unmanufactured tobacco right from the raw material stage up to the finished stage it remains under Chapter heading 2401 and by any stretch of imagination cannot be called as manufactured tobacco. Therefore, since the tobacco has not been converted into manufactured tobacco, taking the same into CTH 2403 is without authority of law. Consequently, the unmanufactured tobacco even though it is consumed as a chewing tobacco since same remained as unmanufactured tobacco cannot be classified under 2403 9910.
Even by application of Note 3 of Chapter 24 the activity amount to manufacture, the impugned good falls under Chapter heading 2401. Therefore, by virtue of chapter Note, the activity though amount to manufacture as per the Central Excise. Hence, the appellant have rightly paid the duty as manufacture goods but since the goods is correctly classified under CTH 2401, the demand of basic Excise duty and NCCD is not sustainable as the same is correctly classified under 2401 and not under 2403 as contemplated by the Revenue. Therefore, on merit itself the demand is not sustainable.
Extended period of limitation - HELD THAT:- The entire activity of re-packings of cut leaves tobacco from bulk to retail pack and classification thereof under Heading 2401 of Central Excise Tariff Act, 1985, was very much in the knowledge of the department. Therefore, there is absolutely no suppression of fact, fraud, mis-declaration, etc. on the part of the appellant therefore, there are no hesitation in holding that the demand of duty adjudged in the impugned order under the extended period is not sustainable also on limitation.
The impugned order is not sustainable. Hence, the same is set aside - Appeal allowed.
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2024 (5) TMI 1146
CENVAT Credit - inputs/capital goods - various steel items used in manufacturing sponge iron - HELD THAT:- As the assessee is able to prove that all the items in question have been used in fabrication of structures for installation of capital goods which were ultimately used in the manufacture of their final product, in the circumstances, as per the decision of the Hon’ble Chhattisgarh High Court in the case of M/s. Vandana Global Ltd. v. Commissioner of C.Ex. & Cus., Raipur [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] CENVAT Credit to the assessee is allowed.
The appeal filed by the Revenue is dismissed.
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2024 (5) TMI 1129
Recovery of Central Excise duty - non-inclusion of investment subsidy in transaction value - HELD THAT:- The issue was examined by the Tribunal in M/s. Harit Polytech Pvt. Ltd. vs. Commissioner, Central Excise and CGST-Jaipur I [2023 (3) TMI 1120 - CESTAT NEW DELHI] and it was observed that 'The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act.'
The order passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.
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2024 (5) TMI 1128
Valuation - incentive received under Sales Tax package Scheme of Incentive - whether the same is on account of discount and should form part of the transaction value under Section 4(1) (a) read with Section 4(3) (d) of the Central Excise Act, 1944? - HELD THAT:- An identical issue to the present case has been dealt with by the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, RAIGAD, BALKRISHNA INDUSTRIES LTD., ESSEL PROPACK LTD. VERSUS UTTAM GALVA STEELS LTD., BHUSHAN STEEL LTD., JSW ISPAT STEEL LTD., COMMISSIONER OF CENTRAL EXCISE, AURANGABAD [2015 (10) TMI 1727 - CESTAT MUMBAI] where it was held that 'In any case, in the present case, the amount payable has not been varied by the Sales Tax Authorities. Under the facts of the present cases, in our view, the Explanation may not be of any help to the Revenue as at the time of clearance, the term ‘actually payable’ was relevant and not ‘actually paid’. Further, the amount of actually payable sales tax has not been varied by the Sales Tax Authorities.'
The Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE VERSUS MAZAGON DOCK LTD. [2005 (7) TMI 105 - SUPREME COURT] have held that subsidy received from the Government cannot be said to be the additional consideration, as it is not received from the buyer either directly or indirectly and thus, not includable in the price of the excisable goods for the purpose of payment of central excise duty.
There are no merits in the impugned orders passed by the learned Commissioner (Appeals) in confirming the adjudged demands on the appellant. Therefore, the impugned orders are set aside - appeal allowed.
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2024 (5) TMI 1127
Recovery of Excise Duty u/s 4A or u/s 4A of Central Excise Act, 1944 - package is more than 10 gm - Applicability of Standards of Weights and Measures Rules, 1997 - invocation of Extended period of Limitation - HELD THAT:- N/N. 49/2008-CE (NT) dated 24.12.2008 mentions the applicability of Section 4A only to pouches/ packages whose net weight is more than 10 gm; it is not the Department’s case that chewing tobacco sold by the appellant in the impugned pouches is more than 10 gm. It is found that notwithstanding the fact that MRP is printed on the pouch, provisions of Section 4A can be made applicable only when the weight of the net contents is more than 10 gm, as required under Standards of Weights and Measures Rules, 1997. Under these circumstances, it is found that the gross weight of the pouch or the net weight of the pouch including the freely supplied lime tube cannot be the criteria for adopting valuation of Section 4A.
Invocation of Extended period of Limitation - HELD THAT:- It is found that the appellant is a longstanding assessee; has been filing all the declarations and tax returns; under the circumstances, the extended period cannot be invoked. Therefore, there is merit in the appeal filed by M/s Jaimal Singh Kundan Lal Khatri(Appeal No. E/57/2012) on limitation also.
Appeal disposed off.
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2024 (5) TMI 1109
Recovery of short-paid excise duty along with interest and penalty - admissibility of electronic evidences recovered by the investigating officers during earlier proceedings for another company - reliable evidence or not - compliance with the provision of Section 36B of the Central Excise Act, 1944 or not - quantification of demand as arrived in the Show Cause Notice vide para 7.1 to 7.17 adopting percentage of cash to invoice value is correct or not - suppression of facts or not.
Electronic evidences have complied with the provision of Section 36B of the Central Excise Act, 1944 or not - demand adopting percentage of cash to invoice value is correct or the same needs to be arrived at only based on the evidences available on record - demand of Central Excise Duty on CGC on the amounts collected in cash over & above the value - HELD THAT:- The data in the pen drive seized from M/s SVPNSN Balasivaji & Co., was retrieved at some point of time in earlier proceedings. As per SCN, Sl. No. 12 of RUD are printouts of ledgers contained in pendrive and laptop bound into 5 books. As per SCN, Sl. No. 13 is the extract of ledgers recovered from M/s. SvPNSN Balasivaji & Co. Sl.No.38 is the print out of ledger taken from laptop of Shri B.Saravanan seized in 2017. The other proint outs are the whatsapp messages, SMS, contact details obtained from several mobile phones. While recording statements during this investigation, the officers have asked the partners/directors of CGC and B. Saravanan to affix their signatures in these bound books - it is not understood how such affixing of signature on bound books would make the data retrieved from electronic item to be admissible in evidence in para 13.4 of impugned order the excerpts from statement of Shri B. Saravanan would show how the department got his signature on these bound books - The affixing of signatures on the bound volume of books would not suffice compliance of Section 36B.
Compliance of requirement of Section 36B of Central Excise Act - HELD THAT:- Without complying Section 36B it is not possible to hold that the data retrieved from pen-drive and laptop (seized in 2017) is admissible in evidence. This is more important as this pen-drive and laptop are the only documents relied by AA for confirmation of demand of the duty - Though some kind of certificate is produced for retrieval of data from mobile phones, there is no certificate at all for compliance of Section 36B for retrieval of data from the pen drive and laptop seized in 2017.
Section 36B of Central Excise Act, 1944 is similarly worded as Section 65B of Indian Evidence Act 1872. The Hon’ble High Court of Delhi in the case of CCE Vs Jindal Nickel Alloys Ltd., [2019 (11) TMI 122 - DELHI HIGH COURT] considered the admissibly of electronic evidence where the allegation was suppression of production of finished products and clearance of goods. The Hon’ble High Court held that the provisions of Section 36B are mandatory.
The evidence tendered by the key witness from whom the pen drive and lap top were recovered shows that he has denied the allegations. The original authority has disregarded his retraction of statement as an afterthought - A mere retraction may not make a statement irrelevant or inadmissible. In the present case, the witnesses were already subject to cross examination in 2019 as per Section 9 D of the Central Excise Act, 1944. After such cross-examination and filing of SVLDRS application, he is again summoned to give statement under Section 14 on the very same set of facts. It is deposed by him that on 09.03.2021 and 10.03.2021 he has given statements before the officers only because he was assured that he would not be implicated in the proceedings.
Undervaluation on the basis of both suppressing the actual value in the invoices and also supply of goods without invoices - HELD THAT:- In the search conducted in the present proceedings, though CPU, laptop, mobile phones were seized these have not been the basis for allegation of undervaluation or demand of duty. Other than the electronic evidence of 2017 and the retracted statements there is no evidence to establish undervaluation. It is therefore concluded that department has miserably failed to establish the allegation of undervaluation.
On the basis of the data retrieved from the pendrive /laptop the price of the goods sold by dealers at Gujarat and Maharastra has been adopted to quantify duty on the goods cleared by the appellant. The price of such goods which have seasonal demand (festival seasons) would vary when sold by dealers, at different places. The quantification of duty on the basis of dealer price at Maharastra and Gujarat appears to be too extra ordinary method for quantification of duty and in appropriate too.
The demand of duty, interest, penalties cannot sustain. The impugned order is set aside - Appeal allowed.
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2024 (5) TMI 1057
Clandestine removal - shortage of stock found during joint stock taking conducted by the officers in the presence of the Director of the company - demand of duty and disallowance of credit - demand of duty confirmed on the alleged clandestine removal of goods, on the basis of the data recovered from the CPU - Penalties imposed on the Managing Director and Director.
Demand of Central Excise duty and the disallowance of CENVAT credit on the basis of the shortages noticed during the joint stock verification done - HELD THAT:- The verification of stock was done in the presence of the Director. The weighment sheet is prepared on the basis of weight of each article as provided by the Director multiplied by number of such articles. Counting numbers of the articles was noted down in the rough sheets at the time of stock taking which has been authenticated by the Director on the spot and he has confirmed the shortage in his statement dated 23.08.2008. Subsequent retraction of the statement and alleging that the stock taking was not done properly, seems to be an afterthought - the stock verification has been done properly and there is no reason to suspect the findings arrived at during the course of the stock verification by the officers - there are no infirmity in the findings of the Ld. Commissioner insofar as the demand based on the shortage of stock is concerned.
Demand on the alleged clandestine clearances - HELD THAT:- The demand has been confirmed for the financial years 2004-2005 and 2005-2006 whereas the search was conducted on 23.08.2008. The demand is confirmed based on the print out retrieved from the computer CPUs that was admittedly in the official use of the appellant-assessee - The pen drives recovered from the office premises of the appellant-assessee are floating devices. Many staff from the office would have used the pen drive to store data. Thus, it is required to identify the person who entered the data in the computer. It is also observed that the author of the computer printout recovered from the Appellant's office has not been established in this case. Without identifying the author who entered the data, the information available in the pen drive cannot be relied upon to demand duty - the investigation has not brought in any corroborative evidence to substantiate the allegation of clandestine removal - the charges of clandestine removal against the appellant assessee M/s. Mittal Iron Foundry Pvt. Ltd. in the impugned order is not sustainable.
Penalties imposed on the Managing Director Shri Ramjilal Agarwal and the Director Shri Vijay Kumar Agarwal, under Rule 26 of the Central Excise Rules,2002 read with Rule 15 of the CENVAT Credit Rules, 2004 - HELD THAT:- It is observed that they were in charge of the day-to-day affairs of the company. They admitted the shortage noticed during the joint stock verification. Thus, they are liable for penalty for the shortages noticed during joint stock verification. However, the demand raised on clandestine removal is not substantiated. Accordingly, we hold that they are liable for penalty, but the penalty can be reduced commensurating with the offence. Since the demand is confirmed only relating to the shortages found, it is observed that the penalty of Rs. 10,00,000/- imposed on each can be reduced to Rs. 1,00,000/- each, to meet the ends of justice.
Appeal disposed off.
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2024 (5) TMI 1056
Recovery of the refund of service tax paid - vice of judicial discipline - services rendered to Electro Motive Diesel, Inc (EMD) - export of services or not - Whether the refund granted to the appellant pursuant to the Tribunal's order can be challenged by way of a show cause notice u/s 11A of the Central Excise Act. - HELD THAT:- There is no doubt that the issue has been considered in the earlier decisions passed in the case of the appellant themselves, where the Tribunal in NATIONAL ENGG. INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2007 (12) TMI 170 - CESTAT, NEW DELHI] dealt with the similar issue while allowing the appeal observed 'In the present case, it is revealed from contract that the appellant would be paid USD equipment (sic) (equivalent) to non-convertible Indian Rupee at the Rate of Exchange prevailing on the date of supply order. It is noted that the equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, and therefore, the appellant complied with the provision of Rule 3(1)(b) of the Rules.'.
Similarly, in the final order in the case of the appellant in NATIONAL ENGINEERING INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [2011 (9) TMI 759 - CESTAT, NEW DELHI], the issue decided in favour of the appellant was whether the service provider – appellant in India getting rupee value equivalent to commission amount of 5% US $ shall be liable to service tax on the allegation of nonfulfilment of condition of Rule 3(1)(3) of Export Service Rules, 2005.
Admittedly, neither the final order nor the consequential order of refund was challenged by the Revenue and had thereby attained finality. If the Revenue was agreed by the grant of the refund amount, the proper remedy was to approach the proper forum by way of appeal and not by issuing the show cause notice as they have done in the present case. May be, the matter was subjudiced before the Supreme Court, however, there was no stay of the impugned order and, therefore, the Revenue was bound to implement the order of the Tribunal as confirmed by the High Court of Rajasthan.
The authorities below have seriously erred in upholding the recovery of the refunded amount from the appellant. Once the issue has been decided by the Tribunal that the appellant is entitle to the refund, the authorities below have no jurisdiction to order for recovery of the said refunded amount unless the order of the Tribunal granting refund is stayed or set aside by a higher forum, which is not in the present case. Infact the lower authorities further exceeded the brief by commenting critics on the decision rendered by the Tribunal which is much superior in hierarchy. The impugned order is, therefore, set aside.
Appeal allowed.
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2024 (5) TMI 1055
Clandestine manufacture and surreptitious removal - demand based on statements of the buyers and the appellants recorded during the course of investigation - retraction of statements - HELD THAT:- The statements of the appellants have been retracted, but statements have not been tested in terms of section 9D of the Central Excise Act, 1944 to know the veracity of the statements by examination in chief and after examination in chief of all third party statements, cross-examination of the said statements is required to be done. All these aspects are missing in this case - From the investigation and facts, it is not coming out anywhere that the payment received in the bank account of M/s. Bharat Suppliers was sent to appellant No.1, 2 or 3 by any means and there is no admission to that extent by the appellants.
Admittedly, in the case in hand this Tribunal in the case of M/S ARYA FIBRES PVT. LTD., M/S NOVA PETROCHEMICALS LTD. AND OTHERS VERSUS CCE AHMEDABAD-II [2013 (11) TMI 626 - CESTAT AHMEDABAD] has laid down the certain parameters to establish clandestine removal of goods, the show cause notice is not in conformity with the criteria in the case of Arya Fibres Pvt.Ltd. The allegation of clandestine removal of goods is not sustainable.
Moreover, the statements which has been relied by the adjudicating authority in the impugned order, are not tested as per procedure prescribed under section 9D of the Central Excise Act, 1944 to find out the genuineness of the statements recorded during the course of investigation - the allegatoin of clandestine removal of goods by appellant No.1 is not sustainable against the appellants, the same has been alleged on assumption and presumption without corroborative evidences, therefore, no demand of duty is sustainable against the appellants alleging clandestine removal of goods, consequently, no penalty can be imposed on the appellants.
It is further noted that the Ld.Counsel for the appellant has taken the ground that they have paid the entire amount of duty along with interest and 25% penalty under protest, the same is required to be refunded to the appellant as the said amount has been paid by the appellant after adjudication of the case. Therefore, bar of unjust enrichment is not applicable to the facts of this case.
The amount of duty, interest and penalty paid by the appellant after adjudication and under protest for entertaining the appeals filed by the appellant is refundable to the appellant - Appeal disposed off.
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2024 (5) TMI 1054
Valuation - balance amount collected subsequent to installation of the bearings in the project - Amount received towards supply of goods or services? - Required to be added in the assessable value or not - Non-following of CAS- 4 valuation - extended period of limitation - HELD THAT:- In the present case, without any dispute, the Appellant has divided the contract into two parts and paid any Excise Duty on 70% of the value treating the same as the value of goods supplied. For the balance 30% value of the contract, they have not paid any Excise Duty. For the second portion of this contract value amounting to 30% realization by the Appellant would in fact should be termed as service and the Department should have demanded Service Tax on the same. Considering the fact that the main contractor HCC was awarded the contract under “Works Contract” and both materials and services are involved even in respect of the goods to be cleared by the Appellant, it is clear that designing, installation etc. form part of the services rendered by the Appellant. Therefore, the Revenue is in error in treating this as a valuation case by enhancing the value of manufactured goods to arrive at the quantified/confirmed demand.
Non-following of CAS- 4 valuation - HELD THAT:- Since this is not a case where the Appellant is supplying to their own unit and the goods are not cleared on stock transfer basis, they are not required to follow CAS-4 value. Even otherwise, irrespective of the value declared for the manufactured goods cleared, in the normal course on the balance 30% portion the appellant would have been liable to pay the Service Tax. However, the Department has failed to issue the Show Cause Notice demanding the Service Tax.
The confirmed demands are not sustainable on merits - the confirmed demand and penalty on the Appellant company is set aside.
Time Limitation - HELD THAT:- The SCN has been issued within one year from the date of Audit getting the reply from the appellant. But it is noted that the appellants are registered manufacturer. As such they have been filing their Monthly Returns showing the value adopted by them. Even under the self assessment regime, scrutiny of the ER-1 Returns are still to be taken up by the Range officials. There is nothing to indicate that the self-assessed ER-1 were taken up for scrutiny and any query was raised towards the assessable value adopted by the appellant for their clearances. Therefore, the confirmed demand for the extended period is set aside.
The confirmed demand is not sustainable against the Appellant company, the question of imposing penalty on the Director would not arise. Accordingly, the penalty imposed on him is also set aside.
Appeal allowed.
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2024 (5) TMI 1053
Penalty u/r 26 of the Central Excise Rules, 2002 imposed on the appellants as company - appellant failed to verify the payment of excise duty in the invoice - HELD THAT:- From plain reading of the legal provisions contained in Rule 26, it transpires that the penalty under this rule can be imposed in specified situations given therein. One such situation is, that a person who does any act in acquiring possession or who in any manner deals with, the excisable goods which he knows that these are liable to confiscation can be imposed with penalty. The second situation is in respect of person, who is liable to pay duty upon issue of excise invoices, but issues such invoice without delivery of goods or issues it wrongly to enable the recipient to claim undue benefit. Thus, these provisions make it essential that a person should have the knowledge of the fact that the subject goods are being liable to confiscation. As the acquisition of such knowledge is related to individual persons, it is apparent that such penalty under Rule 26 ibid is applicable on individual persons and not on legal person.
Further, in the present case, the appellants are not the person, who are issuing excisable invoices for the CDs/DVDs. The only allegation on the appellants is that they did not verify the payment of excise duty in the invoice. It is seen from the contract entered with M/s M/s KRCD (India) Pvt. Ltd., that the price is inclusive of all excise duty and other taxes. Inasmuch as the appellants have specifically indicated in contract that the price is inclusive of excise duty, there does not appear to be any ground for the appellants to believe that the DVDs or CDs have been supplied without payment of excise duty. Thus, on the above basis also, the imposition of penalty under Rule 26 is not sustainable.
The issue is no more in dispute as in a number of orders, the Tribunal has held that penalty under Rule 26 can be imposed only on individuals and not on company - in the case of Kakateeya Fabs (P) Ltd. [2017 (9) TMI 13 - CESTAT NEW DELHI], the Tribunal has held that that penalty under Rule 26 cannot be imposed on company firm or organization.
The impugned order to the extent it has imposed penalty under Rule 26 of Central Excise Rules, 2002, on the appellants is not legally sustainable - the impugned order set aside - appeal allowed.
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2024 (5) TMI 1052
Calculation of education cess and higher secondary education cess on the excise duty chargeable on the goods cleared by 100% export oriented unit into DTA - HELD THAT:- It is found that even though in the matter the issue in hand is pending before Hon’ble Supreme Court in case of SARLA PERFORMANCE FIBERS LTD. VERSUS COMMISSIONER OF C. EX., VAPI [2010 (2) TMI 335 - CESTAT, AHMEDABAD], there is no stay granted to the Revenue. Moreover, in the appellant’s own case MEGHMANI DYES & INTERMEDIATES LTD. VERSUS COMMR. OF C. EX., AHMEDABAD [2010 (4) TMI 1026 - CESTAT AHMEDABAD] following the decision of Sarla Performance Fibres Limited, this Tribunal has passed the order in their favour and the same was upheld by the Hon’ble Supreme Court in COMMISSIONER VERSUS MEGHMANI DYES & INTERMEDIATES LTD. [2014 (11) TMI 615 - SC ORDER].
The Tribunal in the case of M/s. Sarala Performance Pvt. Ltd. held that once the measure of Customs duty equivalent to Central Excise duty had been calculated, there was no need to levy Education Cess separately for clearances by 100% EOU to DTA.
In view of the above decision of the Tribunal which was upheld by the Hon’ble Supreme Court in the appellant’s own case, the present appeal does not survive - appeal of Revenue dismissed.
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2024 (5) TMI 1051
Clandestine removal - demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less than the weight recorded - clandestinely removal of duty free raw material by manufacturing and clearing grey fabric (finish goods) showing the excess weight than the actual weight of grey fabrics - invocation of extended period of limitation - confiscation - levy of redemption fine and penalty - Cross-examination of witnesses - admissible evidences or not - violation of principles of natural justice.
Principles of natural justice - HELD THAT:- It is found that in this matter earlier the matter was remanded by this Tribunal vide order dated 26.11.2014 with a direction to comply with the principles of Natural Justice. In the remand proceedings the appellant have specifically requested for cross-examination of the witnesses who have given the statements including the 3 buyers of the alleged clandestinely purchased goods. However, Learned Adjudicating Authority has not granted the cross examination.
Cross-examination of witnesses - admissible evidences or not - HELD THAT:- From the statutory provision of Section 9D, it is settled that the statements which have not passed the test of examination-in-chief and/ or cross-examination of witnesses, are not admissible in evidence. Therefore, the case based on the statements will not stand. As regard other evidence that there is a difference in weight since, it is also based on statement, the allegation majority stand diluted on this account also.
Demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less by 7156.720 Kgs since the recorded stock was 13257 Kgs admeasuring 66426 linear meters - HELD THAT:- It is admitted fact that there is no difference in the length of the fabrics. Moreover, the officer also found that even length in linear meter matching there is different recorded weight of 6100 Kgs. In this position, the allegation is clearly based on assumption that 7156.720 Kgs of raw material (PFY) used in these finished goods ( grey fabrics) was removed clandestinely - the weight of the finished goods (grey fabric) cannot be assumed or counted to be the same as the imported raw material PFY to allege such illicit removal of PFY. Admittedly the raw material used in manufacturing process would be much less than weight of finished goods. Hence mererly by taking statements which are not admissible, the clandestine removal is not established - there is no evidence that due to difference in weight as stated by these buyers whose statements have already been discarded, there is no financial flow on this account. This further reinforced that the buyer’s statements are not correct.
It is found that the department could not establish clandestinely removal of goods. Therefore, the entire demands including penalties are not sustainable - appeal allowed.
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2024 (5) TMI 1050
Valuation - inclusion of investment subsidy received by the appellant from the Government of Rajasthan under the Rajasthan Investment Promotion Policy, 2010 in the assessable value - Recovery of central excise duty with interest and penalty - HELD THAT:- The issue was examined by the Tribunal in M/S HARIT POLYTECH PVT. LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & CGST- JAIPUR I, GANPATI PLASTFAB LTD., M/S APEX ALUMINIUM EXTRUSION PVT. LTD., M/S MAHA MAYAY STEELS, M/S. TIRUPATI BALAJI FURNACES PVT. LTD., M/S. TRANS ACNR SOLUTIONS PVT. LTD., M/S. FRYSTAL PET PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & CGST- ALWAR [2023 (3) TMI 1120 - CESTAT NEW DELHI] and it was observed that 'The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act.'
The order dated 10.05.2019 passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.
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