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Central Excise - Case Laws
Showing 81 to 100 of 81316 Records
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2024 (11) TMI 466
100% EOU - demand of differential duty on the goods cleared into DTA - denial of benefit of N/N. 30/2004-CE dtd. 09.07.2004 and benefit of Sr. No. 3 and Sr. 4 of the N/N. 23/2003-CE dtd. 31.02.2003 - non-inclusion of SAD under Sr. No. 2 of N/N. 23/2003-CE for clearances of final products - Extended period of limitation - HELD THAT:- It is found that during the disputed period Appellant have imported certain quantities of raw materials viz. HDPE granules, PP granules, Nylon yarn etc. and also procured domestically. The finished goods were manufactured and cleared for export as well as in DTA. The present demand of differential duty pertains to clearance of finished goods namely HDPE/PP Ropes, Nylon Ropes, Polyester Rope in DTA by availing benefit of concessional rate of duty in terms of Notification No. 23/2003-CE dtd. 01.03.2003 from time to time.
During the period from 01.07.2006 to 28.02.2007, Appellant cleared their final products viz. HDPE/PP Ropes (CTH 56074900), Nylon Ropes (CTH 56075040), Polyester Ropes (CTH No. 56075090) etc. in DTA by paying concessional central excise duty by availing benefit under Sr. No. 4 of Table to N/N. 23/2003-CE dtd. 31.03.2003 by considering the same as having been wholly exempted from central excise duty portion under Notification No. 30/2004-CE dtd. 09.07.2004 and wholly manufactured from the raw materials manufactured or produced in India. We find that Notification No. 30/2004-CE dtd. 09.07.2004 exempted goods falling under heading No. 5607 from whole of the duties of excise if such goods were manufactured by a unit other than EOU and if no credit of duty paid on the inputs used in the manufacture of the same was taken.
The condition provided in clause (iii) of condition No. 4 of Notification No. 23/2003-CE dtd. 31.03.2003 as mentioned above stand fulfilled. Further it is an undisputed fact that the Appellant have fulfilled condition No. 4(ii) of Notification No. 23/2003-CE. However as regard the condition No. 4 (i) the Ld. Commissioner held that appellant have imported raw materials viz. Nylon yarn, Polyester yarn, lead wire, HDPE granules etc, without payment of customs duties and used the same along with other indigenously purchased raw materials for manufacture of final products - It is found that the Adjudicating authority has assumed that since the raw material was imported, the same would have been used in the manufacture of goods cleared into DTA. In this context it is found that neither show cause notice nor impugned order relied on any concrete evidence to established that the imported raw material was used in the manufacture of goods cleared into DTA.
The submission of appellant agreed upon that no part of the goods manufactured from the imported raw material were cleared into DTA. Clearly, the denial of benefit under Sr. No. 4 of Notification No. 23/2003-CE is incorrect. It is found that all the condition of Sr. No. 4 are duly fulfilled by the appellant.
In the present matter denial of benefit of Sr. No. 4 of Notification No. 23/2003-CE for the period prior to 06.07.2007, on the ground that goods procured from domestic suppliers who had availed the deemed export benefit in such supply, is also legally not sustainable - the appellant have complied with the Explanation II to Notification No. 23/2003-CE. Further we have also gone through the statement dtd. 21.06.2011 of Muneshwar Nath Modi, Director of Appellant wherein he stated that appellant did not receive any supply form 100% EOU or SEZ till 27.04.2007. Therefore demand for the period prior to 28.04.2007 will not sustain in this matter.
The goods in question manufactured by the appellant did not find mention in any Schedule of the Dadra and Nagar Haveli VAT Regulation, 2005. Therefore, applicable VAT rate on goods manufactured by the appellant was 12.5% under Dadra and Nagar Haveli VAT Regulation, 2005. Therefore, the goods in question were not exempted from the payment of sales tax or VAT when sold to a customer in the said Union Territory. In this case it is not disputed that such goods when sold in DTA had not been exempted by the State Govt. by any Notification.
Notifications issued under Rule 19(1) or Rule 19(2) is not an exemption from payment of duty even though it allows the goods to be removed without payment of duty. On the same analogy, Section 8(5)(a) of the Central Sales Tax Act subject to various conditions including production of ‘C’ form. This does not means that the goods cleared without payment of sale tax by availing the concession under Section 8(5)(a) have become exempted from payment of sale tax. In fact, if the buyer who fails to produce the ‘C’ Form, Central Sales Tax is payable on the goods sold to such buyer.
In this matter the benefit cannot be denied to the entire quantity of goods cleared into DTA. The Ld. Commissioner in the impugned order has denied the benefit of Sr. No. 3 of the Notification No. 23/2003-CE for the entire qty. of goods cleared to DTA during the period 01.03.2007 to 06.07.2007. The documentary evidences produced by the appellant clearly show that there is very less quantity of the imported raw material as compared to the quantity of finished goods manufactured and exported - in the present matter the benefit of Sr. No. 3 of Notification No. 23/2003-CE was denied for the period 07.07.2007 to 29.02.2008 on the ground that the imported raw material has been used in the manufacture of export goods only and not in the manufacture of goods cleared to DTA. Further the goods procured from DTA on which DTA supplier has availed the deemed export benefit and goods procured from another EOU have also not been used in the manufacture of goods cleared to DTA.
As regard the demand for the period 25.08.2009 to 31.05.2011 we find that after 20.08.2009 the department in the present matter accepted the fact that the appellant were maintaining records by which it can be easily established that finished goods manufactured were from imported raw material or from indigenous raw materials. Further it is also found that the benefit of notification No. 8/1997-CE (at present 23/2003-CE) also cannot be denied on the ground that export goods and DTA cleared goods were manufactured on common manufacturing lines and by using common inputs. In this context it is found that the said position has also been clarified by the Board through circular No. 85/2001 dtd. 21.12.2001.
The impugned order demanded SAD for the period September 2009 to December 2009 with respect to Nylon rope cleared to DTA by the appellant on the ground that the Nylon rope was cleared without payment of Central Sale Tax. It is found that during the disputed period Appellant have claimed benefit of Sr. No. 2 of Notification No, 23/2003-CE. In this context it is already discussed, that the goods in question were not exempted from sales tax/VAT. Hence, demand of SAD in the present matter is not correct.
The appellant have substantiated that separate records were maintained, it was ensured that domestic raw materials alone were consumed for manufacture of finished goods cleared into DTA . Therefore denial of benefit of Sr. No. 3 by the Ld. Commissioner in the present matter is also not correct - the appellant is entitled for benefit of exemption Notification No. 23/2003-CE.
Time Limitation - HELD THAT:- The Show Cause Notice dated 2.8.2011 fails to prove that the appellant have acted with any malafide intent. Even the Show Cause Notice does not give any evidence to show that the appellant have acted with malafide intent. There is nothing on record to show the existence of fraud, collusion or suppression of materials facts or information. There is no iota of evidence on record to prove that the appellant have wrongly availed the exemption benefit under Sl. Nos. 3 and 4 of Notification No. 23/2003-CE specifically with intent to evade payment of duty. Therefore, as the ingredients of proviso to Section 11A(1) of the Central Excise Act, 1944 are not present in the present matter, hence the larger period of limitation is not invokable in the facts of the present matter - the issue involved in this matter is purely involves interpretation of statutory provisions. Hence, invocation of extended period of limitation is incorrect. It is well settled that where the issue involved is purely legal in nature, extended period of limitation cannot be invoked.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 400
Legality of adjudication proceedings held by Respondent No. 2 - refund of excise duty u/s 11B of the Central Excise Act, 1944 - violation of principles of natural justice - HELD THAT:- It is opined that the claim of the petitioner for the refund in terms of Section 11-B of the Central Excise Act, 1944 ought to have been decided before taking any action as is envisaged in the impugned show cause notice against the petitioner. It seems that the application of the petitioner for refund remained undecided and the Respondent No. 2 instead proceeded to recover the amount, which as per the Respondent No. 2 was illegally utilized/withdrawn by the petitioner by issuing a show cause notice dated 13.07.2018.
Undoubtedly, the petitioner has been heard in the matter and he was given an opportunity to reply the same. The adjudicating authority has also passed a reasoned order but that does not meet the requirement of Section 11B as no such adjudication is apparent from the reading of the impugned order of adjudication.
The amount which is subject matter of the show cause notice and the order of adjudicating authority impugned in this petition shall be reversed and kept in FDR with the Respondent No. 2-Additional Commissioner, Central GST & Central Excise and appropriated as per the final orders to be passed by Respondent No. 1-Principal Commissioner, Central GST & Central Excise Commissionerate, Jammu.
The matter is sent back to the Respondent No. 1-Principal Commissioner, Central GST & Central Excise Commissionerate, Jammu to consider and dispose the application for refund filed by the petitioner in accordance with law, provided that the application is complete in all respects or is completed by the petitioner within a period of four weeks from today.
Petition disposed off by way of remand.
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2024 (11) TMI 399
Rejection of appellant’s challenge to the arbitral award by way of a petition under Section 34 of Arbitration and Conciliation Act, 1996 - seeking reimbursement of the differential amount of excise duty paid on the goods supplied under the contract - interpretation of the Clause III.12.2 of the Purchase Orders - HELD THAT:- The record reveals that in the present case the appellant has neither raised any dispute qua any of the invoices raised by the respondent nor has it amended any of the terms of the Purchase Orders. The only plea of the appellant both before the learned Single Judge and before us is that Clause III.12 of the Purchase Orders would not include a demand towards higher duty paid by the respondent due to change in classification of the goods - there are no merit in this plea, as the expression, “change in taxes/ duties” can also pertain to the change in classification. In any event, this being a plausible view arrived at by the learned Arbitrator and upheld by the learned Single Judge calls for no interference in the present appeal under Section 37 of the Act, where the scope is as it is very minimal.
Though the learned counsel for the appellant had tried to urge that the interpretation of the Clause III.12.2 of the Purchase Orders given by the learned Arbitrator is incorrect, the said possible interpretation rendered by the learned Arbitrator cannot be appealed, which has also been accepted by the learned Single Judge.
Reference may be made to the decision of the Hon’ble Apex Court in MMTC LTD. VERSUS M/S VEDANTA LTD. [2019 (2) TMI 1085 - SUPREME COURT] wherein it was held 'the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.'
There are no reason to interfere either with the impugned arbitral award or the impugned order passed by the learned Single Judge. The appeal being meritless is dismissed.
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2024 (11) TMI 398
Challenge to actions on the part of the respondent CIL in issuance of respective debit notes - recovery of amounts on account of arrears of central excise duty and corresponding VAT/CST from 01.03.2011 to 28.02.2013 against the coal purchase from the CIL by the petitioners - failure to provide details - appropriating from other transactions carried out between the CIL and the petitioners - HELD THAT:- One aspect is very clear that the petitioners herein have not assailed as to whether the stowing excise duty as well as the royalty would form a part of the transaction value on which the central excise duty is liable to be paid. Under such circumstances, what transpires from the materials on record, as well as the submissions so made by the learned counsels appearing on behalf of the parties is that the CIL is trying to recover certain amounts from the petitioners by issuance of these debit notes along with the enclosures.
It is relevant to take note of the submissions of the learned counsel for the petitioners wherein it was emphasized that basing upon the debit notes and the enclosures, the respondent CIL is trying to recover from other transactions carried out by the petitioners with the CIL. This Court is of the opinion that the issuance of the debit notes along with the enclosures can at best be construed to be demands made by the CIL upon the petitioners. If such demands are rejected and the petitioners refuse to pay, the same would result in a dispute between the respondent CIL and the petitioners.
This Court is of the opinion that by issuance of a debit note, the CIL cannot recover such amounts from other transactions. However, in terms with Clause 11.12 of the Spot E-Auction Scheme 2007, it is the opinion of this Court that if the CIL wants to recover such amounts, the said amounts can be recovered by the process mandated in the said Scheme i.e. by way of Arbitration - Petition disposed off.
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2024 (11) TMI 397
Recovery of inadmissible Cenvat credit along with interest and imposition of penalty - Fraudulent availment of Cenvat credit based on fake invoices - denial of cross-examination of witnesses - Applicability of Section 9D of the Central Excise Act - principles of natural justice - HELD THAT:- The identical issue has been decided by the Hon’ble Punjab & Haryana High Court in the case of Jindal Drugs Pvt. Ltd. [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] as well as by this Tribunal in the case of M/s Lauls Ltd. and M/s Tibrewala Industries (P) Limited [2023 (7) TMI 1112 - CESTAT CHANDIGARH] wherein it was held that the cross-examination of witnesses whose statements were relied upon by the Revenue to make out a case against the assessee has to be allowed and by following the ratio of the said decisions, the impugned order is not sustainable and therefore, the same is set aside and the cases remanded back to the Adjudicating Authority for a fresh decision after affording opportunity of cross-examination of the material witnesses and by following the procedure as prescribed in Section 9D of the Central Excise Act.
Both the appeals are allowed by way of remand - The appellants are directed to cooperate with the Adjudicating Authority for a speedy disposal of the case.
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2024 (11) TMI 344
Imposition of penalty under Rule-26 of the Central Excise Rules, 2022 on the Appellant who was Director of sales and marketing of co-noticee Company - Non-responsive attitude of the Respondent Department - Interpretation of the "Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019" - HELD THAT:- Even after noting in his order that Appellant looked after Sales and Marketing activities of goods produced by the Appellant company, he is fastened with penal liability for manufacture of the goods by the Appellant Company and since excise duty is on the manufacture and its sales and marketing are post occurrence activities, in which Appellant was apparently engaged, there can not be a personal liability on the Appellant when learned Commissioner himself has noted that Appellant was part of the team entrusted with the task of determining the pricing of various products and regarding his duty concerning payment/nonpayment of appropriate excise duty, nothing is available in the entire case records to implicate him as a person equally responsible for evading payment of tax.
Therefore, it is a fit case where Appellant is in a win win situation for the reasons that the order of penalty imposed on him has already been set aside by CESTAT and no further proceedings like re-adjudication or Appeal was initiated against him and thereby the order passed by the CESTAT in 2015 has become final, apart from the fact that even without an application from the Appellant under the “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019”, penalty recoverable from him should be treated as “NIL” in view of operation of section 124(1)(b) of the Amended Finance Act, 2019 and that the charge labelled against Appellant imposing penalty as a punishment is as such, unsustainable in both law and facts.
There exists no re-adjudication scope - Appeal allowed.
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2024 (11) TMI 343
Contravention of provisions of Rule 8(3A) of the Central Excise Rules, 2002 - failure to make full payment of duty within prescribed time limit as provided under Rule 8 of Central Excise Rules, 2002 - bar on utilization of CENVAT credit for payment of duty - invocation of Extended period of limitation - penalty - HELD THAT:- The issue as to whether the Assessee can utilise the CENVAT credit toward payment of duty when in default is no more res integra and many judicial authorities have held that the provision of Rule 8(3A) of Central Excise Rules, 2002 as ultravires to the Main Act. The Hon’ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA & 2 [2014 (12) TMI 585 - GUJARAT HIGH COURT] struck down the condition in Rule 8(3A) for payment of duty “without utilizing the CENVAT credit” as unconstitutional and invalid.
The Hon’ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS NASHIK – II COMMISSIONERATE VERSUS M/S. NASHIK FORGE PVT. LTD. [2018 (9) TMI 1582 - BOMBAY HIGH COURT] has held that Rule 8(3A) to be unconstitutional as it infringes upon the substantive right of an assessee to utilize Cenvat credit. Further, the Tribunal in the case of INDUS TROPICS LTD VERSUS C.C.E. & S.T. -RAJKOT [2023 (3) TMI 950 - CESTAT AHMEDABAD] has followed the decisions of various High Court to set aside the demand alleging violation of Rule 8(3A) of Central Excise Rules, 2002.
The appeal was referred to the Lok Adalat proceedings before the Hon’ble Supreme Court and settlement has been arrived at. The effect is that the stay order having merged with the order of settlement, stands vacated. The decision rendered by the Hon’ble High Courts of Gujarat and Madras in the above cases would revive and be in force as a Precedent.
The demand raised alleging violation of Rule 8(3A) cannot sustain and requires to be set aside - Appeal allowed.
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2024 (11) TMI 285
Requirement of pre-deposit to be made pending disposal of the appeal - HELD THAT:- In the peculiar facts and circumstances of the case and without having any implication on the statutory provision, the interim order is confirmed and the Customs Excise and Service Tax Appellate Tribunal are directed to dispose of the appeal on merits.
The appeal is disposed of.
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2024 (11) TMI 203
Eligibility for exemption Notification No.10/2006-CE dated 01.03.2006 - SSI exemption - misclassification of goods - Parts of Kitchen/ table wares, Toilet Items, SS Box, Sigree/Tandoor and Brass Knobs - determination of ratio of the value of such items out of the total clearance value of the year 2012-13 - HELD THAT:- It is clear that during 2014-2015 no such items were cleared by the Respondent.
The Department has filed the appeal without application of mind, as the Order-in-Original clearly states the analogy which was adopted for quantifying the amount prior to 2011 as stated above. The Department, without reading the order, has filed the appeal in a vague and perverse manner which is liable to be dismissed. Furthermore, the Department has again failed to give or suggest any other method logically or evidence that the computation made by the commissioner was incorrect or arbitrary. He has adopted a reasonable method for computation.
The issue in dispute in appeal is strictly restricted to the period prior to February, 2011 for which the Adjudicating Authority has used the 'analogy to calculate the value of duty leviable on the manufacturing of these 4/5 items prior to February, 2011. The demand in SCN for the same period is upto Rs.48,35,361/-. This demand of duty is below the monetary limit for filing the appeal before the Tribunal, hence this appeal itself is not maintainable. The amount stated in the appeal is incorrect as the dispute pertains to the period prior to 2011.
In the Order-in-Original the Adjudicating Authority stated that these 4/5 items were eligible to SSI exemption for the period prior to 01.03.2011. However, this seems a typographical error as the SSI exemption was available till 31.03.2011.
There are no infirmity in the impugned order - The appeal is dismissed.
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2024 (11) TMI 202
Violation of principles of natural justice - no personal hearing has been conducted by the adjudicating authority - Valuation of lighting fixtures supplied to brand owner - levy of separate penalty on a partner of a partnership firm - levy of redemption fine - goods are not available.
Principles of natural justice - HELD THAT:- It is found that in the entire case, no personal hearing has been conducted by the adjudicating authority though, the adjudicating authority has given a notice of hearing on 21.09.2017 but by one notice two consecutive date of hearing i.e. 03.10.2017 & 13.10.2017 was fixed. In this regard, it is found that it is a settled law that by giving one hearing notice letter even though, two or three dates are given it is to be considered as one date of hearing and as per the statute, minimum three opportunities of personal hearing is required to be given to the assessee. Moreover, the appellant also filed a letter dated 29.11.2017 explaining the reason for non attendance and requested for a fresh date of hearing. However, by that time, the adjudication order came to be passed. As regard the second show cause notice, even though, hearing is conducted but the order was passed on the same line of the order passed in the show cause notice dated 30.03.2017. Therefore, taking total stock of the proceeding, there is a clear violation of principles of Natural Justice in adjudication of the show cause notices.
Levy of personal penalty on Shri Ashwin Dias - HELD THAT:- It is found that Shri Ashwin Dias is undisputedly partner of M/s. Art Luminaires which is a partnership firm. The Hon’ble jurisdictional High of Gujarat in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS JAI PRAKASH MOTWANI [2009 (1) TMI 501 - GUJARAT HIGH COURT] & judgment in the case of SHAH PETROLEUMS AND SNEHAL ARVINDBHAI SHAH VERSUS C.C.E. & S.T. -SURAT-II [2023 (2) TMI 67 - CESTAT AHMEDABAD] held that in case of partnership firm, no separate penalty can be imposed on the partner. In view of the settled legal position by the Hon’ble High Court of Gujarat irrespective of any merit of the case, the personal penalty on Mr. Ashwin Dias is clearly not sustainable. Hence, the same is set aside.
Levy of Redemption Fine - goods are not available - HELD THAT:- It is found that the Ld. Commissioner (Appeals) is absolutely correct in setting aside the redemption fine, as the issue is squarely covered by the Larger Bench judgment in the case of SHIV KRIPA ISPAT PVT. LTD. VERSUS COMMISSIONER OF C. EX. & CUS., NASIK [2009 (1) TMI 124 - CESTAT MUMBAI - LB] wherein, it was held that when the goods are not available for confiscation no redemption fine can be imposed. Therefore, there are no infirmity in the order of the Commissioner (Appeals) to the extent, it set aside the redemption fine.
Appeals are allowed by way of remand to the adjudicating authority for passing a fresh order by observing the principles of Natural Justice.
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2024 (11) TMI 201
Reversal of excess input service credit - Distribution of input service credit of the common input credit of various input services distributed by their Head Office situated at Thane (Mumbai) - Department is of view that since the appellants Head Office is who providing output service, the Head Office of the appellant has not proportioned input credit going for providing output service at cleared and therefore distribute the input service credit amounts three units in excess - HELD THAT:- The fact is noted that the show cause notice on the similar issue were also issued to the appellant is other units situated at Tamil Nadu and Uttar Pradesh.
The matter have already been decided by the Division Bench of this Tribunal in M/S COVESTRO (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2024 (3) TMI 1367 - CESTAT ALLAHABAD] wherein, the appeal of the appellant has been allowed by this Tribunal. The matter is no longer res Integra as the issue has already been decided by this Tribunal in the appellant’s own case on the same issue where it was held that 'It is found that exactly the same issue in case of Appellant’s Tiruchirapalli unit has been decided by the Chennai Bench vide Final Order [2023 (2) TMI 7 - CESTAT CHENNAI], observing that 'There is also nothing brought out on record if the appellant, being a recipient unit, had any role or influence in the manner of distribution so that a case of wilful suppression with an intention to evade payment of duty, etc., could be justified. When the appellant took consistent stand inter alia that its Head office-ISD unit was regularly filing its ER-1 return, that the service provider unit at Head Office had Service Tax liability every year, which was paid in cash and that the entire tax liability was paid in cash every year rather than paying through the CENVAT Credit, the lower authorities have not denied anywhere the above facts.''
Following the above decision of this Tribunal in the appellants own case on the same issue it is decided that impugned order in appeal is devoid of any merit and therefore, the same is set aside - appeal allowed.
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2024 (11) TMI 200
Clandestine removal - Recovery of central excise duty with interest and penalty - demand was confirmed, basically relying on the admissions made by the authorized signatory of the appellant company regarding shortage of finished goods and the raw materials - invocation of Extended period of limitation - penalty - HELD THAT:- While considering the issue of clandestine removal, the statement dated 17.01.2015 of Shri Shikhar Agarwal recorded under Section 14 of the Central Excise Act, 1944 is relevant to be taken note of, where he accepted that he was part of panchnama proceedings and was present throughout.
From the above contents of his statement, it is evident that Shri Shikhar Agarwal had admitted the shortage of the finished goods and the raw materials and also the removal of the goods without payment of duty and without accounting thereof in the records. Further, he agreed with the verification of records with physical stock by the officers and accepted the lapse of the stock found short. Coupled with the admissions made by Shri Shikar Agarwal, the modus operandi of the appellant of not maintaining any kind of Daily Stock at the factory premises, not making entry of final products in the daily production register, not issuing any invoices in respect of excisable goods cleared and neither declared the production and clearance of excisable goods so manufactured and cleared in the ER-1 Returns only reflects that shortage of the finished goods and the raw materials during the physical verification at the time of preventive check is evident of the fact of clandestine removal with intent to evade payment of duty.
The objection raised by the appellant that search was without search warrant is not sustainable as per the records made available and considered in the impugned order. The Revenue has placed on record the authorization dated 15.01.2015 by the Additional Commissioner (Preventive) to the Superintendent (Preventive) authorizing him to search the premises, etc. of the appellant. From the impugned order, it is found that the Commissioner (Appeals) had categorically noted that the panchnama makes it clear that the search warrant was shown to Shri Ram Avtar Agarwal, Director of the appellant and he had signed the search warrant - the notices for personal hearing issued on various dates sent by speed post were not returned or un-delivered. The contention of the appellant stands duly dis-proved by the documentary evidence placed on record by the Revenue.
Invocation of Extended period of Limitation - Penalty - HELD THAT:- The invocation of extended period of 5 years under Section 11 A (4) of the Act is correct and this being a case of deliberate suppression of facts regarding production and removal of goods, the penalty has been rightly invoked under Section 11AC(1)(c) of the Act.
The demand of duty along with interest and penalty is confirmed - there are no infirmity in the impugned order and hence, the same is affirmed - appeal dismissed.
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2024 (11) TMI 126
Assessment of excise duty - levy of interest and penalty - evidence of manufacture of excisable goods by the appellant - initiation of proceedings based on the ‘registers and loose sheets’ recovered from the premises of the appellant without corroboration of the manufacture done and the clearance effected of excisable goods - HELD THAT:- The two questions of law framed are mixed questions of law and fact. The questions of law were also framed on the ground taken by the assessee that there was no evidence regarding the manufacture of excisable goods by the appellant and the proceedings were based only on registers and loose sheets which cannot lead to imposition of penalty without anything substantiating manufacture.
The allegation against the imposition of penalty is that there is no evidence to establish manufacture and clearance of manufactured goods without payment of excise duty - the imposition of penalty was not on account of the allegation of clearance of excisable goods without payment of duty alone as was noticed in the narration of facts. There was excess stock found on verification, there was excess raw materials found to have been consigned to the appellant in two trucks which were examined by the inspection team at the premises of the appellant; on which examination and proper weighment done, presence of raw material in excess of that declared in the invoice was found. In addition to this was the allegation of manufacture based on the documents recovered from the premises of the appellant on inspection.
Insofar as the excess of 3.280 Metric Tonnes of Forged Steel Grinding Media Balls; the same was detected on proper stock verification conducted in the presence of two employees of the appellant. The stock verification report was the basis of the allegation so levelled of excess stock found - With respect to the clearance of excisable goods without payment of duty, the records recovered from the premises of the appellant on inspection was relied on specifically in paragraph no. 10 of the show cause notice. The calculation chart was also annexed as Annexure-XXI along with the show cause notice.
Brims Products [2008 (9) TMI 603 - PATNA HIGH COURT] was a case in which some loose papers were recovered from the dustbin of the premises of the manufacturer. It was found that the manufacturer assessee had received some consignments of betel-nuts which were not entered in the stock register maintained; specifically four numbers of consignments. A clean chit was given to the assessee with respect to two consignments finding no actual purchase having been made by the manufacturer of the raw materials - The investigation was confined to the transporters of the consignments and there could be no presumption drawn of a manufacture and removal of the final product. Even if it is assumed that some raw materials were received at the factory of the respondent, the same cannot be a conclusive proof of production and clandestine sale to different parties was the finding recorded. Due to lack of paucity of evidence benefit of doubt was given to the assessee in that case - it is not convincing that the facts apply to the present case.
It is already noticed that the proceedings were initiated on three counts (i) the excess stock found on stock verification, (ii) the excess raw material found physically on inspection of two trucks found at the premises of the appellant with raw materials consigned to the appellant supported by invoices drawn in favour of the appellant but revealing far less quantity than that loaded in the vehicles and (iii) the production details as obtained from the registers, note-pads and loose sheets recovered from the premises. It cannot at all be said that there was no evidence indicating production of excisable goods. The registers, note-pads and cash-books maintained by the assessee clearly indicated the production of the finished product far in excess of that revealed in the books of account, as having been cleared after paying excise duty. It is found on facts that there was sufficient evidence to support the allegation of production in excess of that cleared by payment of excise duty.
There are absolutely no reason to entertain the appeal, having found the factual premise to have been adjudicated properly by the adjudicating authority and the appellate Tribunal, there are absolutely no reason to interfere with the order passed.
The questions of law answered in favour of the Revenue and against the assessee - appeal dismissed.
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2024 (11) TMI 125
Clandestine manufacture and its clearance - Recovery of Central Excise Duty along with interest and penalty as well as for appropriation of the amount deposited by the petitioner during the investigation against differential duty payable - suppression of facts and misrepresentation by the petitioner - adjudicating authority did not consider the reply submitted by the petitioner while passing the impugned order as no reference to the materials placed by the petitioner by way of the reply has been referred to in the impute order - assessment period is covered by earlier orders passed by the co-ordinate authorities - Principles of natural justice - principles of res-judicata.
HELD THAT:- A careful perusal of the order of the first appellate authority reveals that the core issue before the appellate authority was the capacity of production of the concerned machine. The appellate authority, on the basis of the materials available for the authority, concluded that the capacity of the machine was ‘301-750’ pouches per minute and which was a finding recorded by the adjudicating authority for the earlier periods. The subsequent order passed by the adjudicating authority vide order dated 27.11.2015, whereby the capacity of the machine was found to be above ‘751 pouches’ minute was held to be not based on correct information/evidence.
The questions which are raised in the present petition are essentially questions of facts based on the records and the evidences available before the Departmental authorities. There is no dispute that for several periods earlier the petitioner filed in the proper form the speed of the packing machines and which was duly approved by the adjudicating authority. The first appellate authority by its order dated 30.08.2016 interfered with the order passed on 27.11.2015 by the adjudicating authority holding the same to be not based on the evidences/the records available. There is clear finding that there was no element of suppression or misrepresentation as could be inferred from the records available - The findings of fact arrived at by the first appellate authority as seen from the order dated 30.08.2016 has not yet been interfered with by a still higher authority, namely the second appellate authority as prescribed in the statute, namely the CESTAT, Kolkata before which the appeal being appeal No. E/7689/2016-EX (DB) preferred by the respondent authority is presently stated to be pending. Therefore, the findings arrived by the first appellate authority are binding on the adjudicating authority and the adjudicating authority is duty bound in law to maintain the judicial discipline and accept the findings of the first appellate authority unless the same are interfered with by a still higher authority and/or an appropriate judicial forum. Such is not the position as on date and which is not in dispute.
In ABDUL KUDDUS VERSUS UNION OF INDIA (UOI) AND ORS. [2019 (5) TMI 1856 - SUPREME COURT], the Apex Court while examining the orders passed by collateral quasi- judicial bodies held that where a judicial or a quasi judicial tribunal gives a finding on law or fact, its findings cannot be impeached collaterally or in a second round and are binding until reversed in appeal by way of writ proceedings. The characteristic attitude of the judicial act or a decision is that it binds, whether right or wrong. Thus, any error either of fact on law committed by such bodies cannot be controverted otherwise than by way of an appeal or a writ unless the erroneous determination relates to the jurisdictional matter of that body. The Act and power of judicial review vested with the constitutional courts provide sufficient safeguards, in the present context.
Mere submissions by the counsel appearing for the respondents without supporting facts and materials before the Court cannot be accepted to arrive at a conclusion that the reply filed by the petitioner was suitably considered by the respondent authority. Under such circumstances, prime facie, it appears that the impugned order passed by the Principal Commissioner was passed in violation of the basic principles of natural justice as the reply filed by the petitioner was not found to have been duly considered by the respondent authority upon careful perusal of the impugned order.
In COMMISSIONER OF CUSTOMS, KANDLA VERSUS M/S. ABM INTERNATIONAL LTD. & ANR. [2015 (8) TMI 1118 - SC ORDER] on the question of principle of res judicata, the Apex Court held that it is not in dispute that the first round of litigation, the matter had come up to this Court and was decided in favour of the respondent assessee. While dismissing the appeal of the Revenue, considering the facts of this case, no doubt this Court left the question of law open. However, that could not be a ground to reopen the case of the Revenue. The Apex Court is therefore of the opinion that the Customs, Excise and Service Tax Appellate Tribunal has rightly applied the principle of res judicata.
The first Appellate authority namely the Commissioner (Appeals) on the basis of the materials and records available with the department returned a clear finding on facts that there was no willful or deliberate suppression of material or information. The Commissioner (Appeals) returned a finding that there were amply opportunity prescribed under the provisions available to the adjudicating authority to make necessary enquiries including physical verification before approval of the declaration and which was admittedly not done by the adjudicating authority. The Commissioner (Appeals) recorded a categorical finding that there were no records/evidences of clandestine removal of finished products by the petitioner during the period from June 2015 to October 2015 to show any mala fide intention on their part and any such reasoning given by the adjudicating authority was not supported by facts - the very foundation on the basis of which the show cause notice and the enquiry proceeded against the petitioner under Section 11A of the Central Excise Act ceases to exist. Such action by the department will amount to invocation and/or usurpation of jurisdiction when the circumstances clearly indicate that the departmental authorities ought not to have invoked its jurisdiction under Section 11A of the Central Excise Act.
This Court having arrived at a conclusion that until the findings of fact in the Commissioner (Appeals) in its order are not interfered with by a higher statutory forum or an appropriate Court of law, this finding of fact cannot be ignored by the departmental authorities and consequently the invocation of jurisdiction under Section 11A in the absence of any deliberate or willful suppression or mis-statement of facts by the petitioner, no proceedings can be initiated under Section 11A as have been sought to be done.
This Court is of the view that the writ petitioner cannot be non-suited on the ground of availability of alternative remedy. This court is of the considered view that the alternative remedy prescribed under the statute will not be an efficacious and effective alternative remedy to the present petitioner in the attending facts and circumstances of the case. The submission of the respondents that the writ petitioner should be dismissed on the ground of alternative remedy cannot be accepted and is therefore rejected.
Petition allowed.
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2024 (11) TMI 124
Rejection of Assessee’s appeal on the ground of non-compliance of payment of pre-deposit as required under provisions of Section 35 F of the Central Excise Act, 1944 - CENVAT credit - process amounting to manufacture or not - activities of packing/ re-packing/ labelling/ re-labelling/ affixing of new MRP on the goods ‘clutches’ for automobiles falling under CETH 87089300.
Whether the Appellant is eligible to avail CENVAT credit on the clutches received from their Unit 1 when there is no process of manufacturing involving packing or re-packing of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer as contemplated in Section 2(f)(iii) of the Central Excise Act, 1944?
HELD THAT:- The admitted facts are that the Appellant is engaged in the activities of packing/ re-packing/ labelling/ re-labelling/ affixing of new MRP on the goods ‘Clutches’ procured from their vendors which amount to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1994 which were cleared on payment of duty under Section 4A of the Central Excise Act, 1944. However, in respect of the goods procured from their Unit 1 from 01.04.2012 to 09.05.2012 which were not subjected to the above process as contemplated under Section 2(f)(iii) of the Central Excise Act, 1994 and as such, they could not considered as inputs and the credit taken on such items is not in accordance with the law and they are not eligible for the CENVAT credit availed to an extent of Rs.1,70,46,634/- was the stand of the Revenue for initiation of these proceedings against the Appellant.
It is found that for the earlier period in the Appellant’s own case, the Tribunal Chennai has passed an order in M/S. LUK INDIA PRIVATE LIMITED VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2024 (2) TMI 1018 - CESTAT CHENNAI] allowing the Appellant’s appeal. The facts being identical, the decision is squarely applicable - It was held in the said case that 'When the department has collected duty on the finished products, the credit availed on the inputs cannot be denied alleging that the activity does not amount to manufacture.'
The impugned Order-in-Appeal No. 71/2017 dated 30.11.2017 of the Commissioner of GST and Central Excise, Coimbatore, Circuit Office @Salem, cannot be sustained and so ordered to be set aside - appeal allowed.
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2024 (11) TMI 123
Recovery of allegedly inadmissible credit alongwith interest and penalty - inputs or not - allegation against the appellant was that credit of duty paid, on inputs used exclusively in the ‘research and development (R&D)’ division of the appellant, had continued to remain on their books despite the non-dutiability of the products emanating from the said division - HELD THAT:- The Tribunal in their own dispute in FORCE MOTORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE – I [2018 (4) TMI 466 - CESTAT MUMBAI], relating to the immediately succeeding period, i.e., April 2013 to December 2013 has held that 'Considering the wide latitude offered for availment of credit, and in the absence of any allegation that research and development is not concerned with manufacture of the appellant, the disallowance of Cenvat credit does not find favour and must be set aside.'
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 122
Admissibility of credit - input service - “Goods Transport Agency Service” [GTA] availed by the appellant for outward transportation of goods on Free on Road [FOR] destination basis from the factory gate or depot of the appellant to the premises of the customers - HELD THAT:- From the records of the case, it is found that there is no dispute that the appellant was selling their final products on FOR destination price as the said fact is acknowledged in the show cause notice as well as by the Adjudicating Authority. The place of removal in FOR destination sales is customer’s premises wherein the ownership/property in the goods stands transferred. The Appellant Company also bears the freight charges incurred for outward transportation. The price charged to customers for goods on which central excise duty is paid is inclusive of freight.
The Appellant engages transporters for outward transportation of goods and paying freight charges to the transporters. The Appellant also bore the risk of loss/damage during transit till the goods reaches the doorstep of the customers. In this regard, the appellant also taken transit insurance policy. The appellant also paying service tax under reverse charge mechanism on payment made to transporters and availing credit of the same.
The High Court in AMBUJA CEMENTS LTD. VERSUS UNION OF INDIA [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT] decided in favour of the appellant that the transportation of the goods upto the customer’s premises would also be covered within the definition of “input service”.
The impugned order is un-sustainable and needs to be set aside - Appeal allowed.
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2024 (11) TMI 121
Denial of benefit of the exemption notification for job work - whether the appellant is liable to pay central excise duty on the goods manufactured by them on job work basis under Notification No.214/86-CE dated 25.03.1986 for M/s. Neelgiri Electricals, who were availing the area based exemption under Notification No.49 & 50/2003-CE and were clearing the goods at ‘Nil’ rate of duty? - levy of interest and penalty as well - HELD THAT:- Having perused the decision in M/S. R.N. ALLOYS VERSUS COMMISSIONER OF CENTRAL GOODS & SERVICE TAX, UTTARAKHAND [2023 (11) TMI 364 - CESTAT NEW DELHI], it is found that identical facts were involved in the said case, where the principal manufacturer, who supplied the raw materials/inputs to the job worker, was availing the benefit of area based exemption under Notification No.50/2003-CE dated 10.06.2003 and, therefore, were not paying the central excise duty on their final products. Considering the provisions of the notification and the conditions specified therein, it was noticed that the principal manufacturer had not submitted the undertaking that the goods shall be removed on payment of duty for home consumption from his factory.
In the present case, M/s. Neelgiri Electricals, being the principal manufacturer was availing the benefit of the area based exemption notification and, was, therefore, clearing the goods at ‘Nil’ rate of duty and in that view, they have not furnished the undertaking as required under the notification that the supplier of the raw material or semi-finished goods gives an undertaking that the said goods shall be removed on payment of duty for home consumption from his factory. As a result, neither the appellant, who is the job worker has paid the duty nor the principal manufacturer, who was availing the area based exemption, paid the central excise duty, which is not the intention of the notification and the interpretation thereof placed by the various decisions. If the principal manufacturer has not discharged the tax liability, the burden would fall on the job worker and in that view, the appellant is liable to discharge the duty liability.
Penalty - HELD THAT:- The Authorities below have rightly imposed the penalty on the appellant as well as on the Director. It was within the knowledge of the appellant that M/s. Neelgiri Electricals was availing the exemption of central excise duty under the area based exemption notification as mentioned on the job work challan and also as admitted by Shri Raghu Nandan Chhimpa, Manager and Authorised Signatory of the appellant in his statement recorded under Section 14 of the Act on 17.05.2023.
Interest - HELD THAT:- As the appellant had failed to pay the central excise duty, they are liable to pay interest thereon under Section 11AA of the Act.
There are no merits in this appeal and, therefore, the impugned order is upheld. The appeal, accordingly stands dismissed.
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2024 (11) TMI 120
Rejection of refund claim made under Section 142 (3) of CGST Act, 2017 read with Section 11B of the Central Excise Act, 1994.
HELD THAT:- As regard the refund claim of Rs. 20,52,143/- and Rs. 2,19,004/- as submitted by learned counsel, the same has been allowed in the revised Trans-1. However, the same has not yet been credited in their electronic credit ledger. In this regard, the appellant has liberty to approach the concerned GST authority for further credit in the Electronic Credit Ledger. Therefore, as regard the refund claim for the amount of Rs. 20,52,143/- and Rs. 2,19,004/- the same became infructuous.
As regard the refund claim of Rs. 41,244/- and Rs. 4,87,533/-, the same was rejected on the ground that appellant have paid the amount after 01.07.2007, thereafter, no Cenvat credit provision was excisting. It is found that this issue has been considered by this Tribunal in the case of SHREE GANESH REMEDIES LIMITED VERSUS COMMISSIONER OF C.E. & S.T. -VADODARA-II [2024 (8) TMI 1468 - CESTAT AHMEDABAD] wherein dealing with the same issue this Tribunal has held that 'The Section 142(3) also deals with the amount which is accrued prior to GST regime. Accordingly, the situation arose in the present case is exactly the same for which provision of Section 142(3) was enacted. The amount of service tax was pertaining to the period prior to 01.07.2017 which is payable under the existing law. Subsequently, the said amount became admissible as a Cenvat credit under existing law and since the same cannot be availed as Cenvat credit after 01.07.2017, the only option is to refund the same in terms of Section 142(3).'
From the above decision, it is clear that even though the tax/duty paid subsequent to 01.07.2017 but for the period prior to 01.07.2017, the same is eligible as Cenvat credit under existing law. Therefore, only because the Service Tax was paid after 01.07.2017 refund cannot be rejected. However, the refund has to be processed by following the law such as unjust enrichment, etc. Therefore, only for this limited purpose, this matter related to refund of Rs. 41,244/- and Rs. 4,87,533/- is remanded to the adjudicating authority, for passing a fresh order.
Appeal disposed off.
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2024 (11) TMI 119
Recovery of amount availed as excess refund - violation of condition of N/N. 56/2002-CE dated 14.11.2002 - HELD THAT:- This issue is no more res integra as held in various decisions. This Tribunal in the case of M/s Pace Non Woven Fabric Products [2024 (8) TMI 201 - CESTAT CHANDIGARH] has considered the identical issue and has held 'since the department has not challenged the refund sanctioned order till date and in the absence of challenge to the refund sanction order, the refund cannot be rejected as held by the Hon'ble Gauhati High Court in the case of CCE, Shillong vs. Jellalpur Tea Estate [2011 (3) TMI 11 - GAUHATI HIGH COURT].
The impugned order is not sustainable in law and the same is set aside - appeal allowed.
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