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Showing 441 to 460 of 984 Records
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2009 (7) TMI 959
Issues involved: Failure to discharge duty liability on time, utilization of Cenvat credit for duty payment, financial difficulties of the appellants.
Summary:
Issue 1: Failure to discharge duty liability on time
The appellants, engaged in manufacturing Petroleum/Diesel Dispensing pumps, failed to pay duty for October 2007 on time. They paid the outstanding amount of Rs. 66,60,000 with interest on 26-12-2007. The Central Excise Rules required duty payment by the 5th of the following month, and failure to pay within 30 days results in duty payment at the time of removal without utilizing Cenvat credit. The appellants did not pay duty consignment-wise as required, leading to penalties and demands for payment.
Issue 2: Utilization of Cenvat credit for duty payment
The appellants debited Rs. 38,56,697 from their Cenvat Credit account to pay the duty, instead of paying consignment-wise. The Tribunal noted that once duty and interest are not paid within a month from the default date, the consequences follow automatically. The law requires payment consignment-wise without utilizing Cenvat credit, placing the burden on the assessee. The appellants' failure to pay duty from PLA led to penalties and consequences for clearances made without duty payment.
Issue 3: Financial difficulties of the appellants
The appellants claimed financial difficulties as the reason for the delayed payment, citing a loss incurred in the previous year. However, the Tribunal found evidence of substantial profits, investments, fixed deposits, and funds available with the appellants. Considering the financial stability of the appellants, the Tribunal denied an unconditional stay and directed them to deposit the full duty amount and penalty within eight weeks. Compliance was to be reported by a specified date, with waivers subject to pre-deposit requirements.
This judgment highlights the importance of timely duty payment, proper utilization of Cenvat credit, and the assessment of financial conditions in determining penalties and stay orders in excise duty cases.
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2009 (7) TMI 958
Issues:
Application for waiver of pre-deposit of duty and penalty under Project Imports Regulations, 1986.
Analysis:
The judgment by the Appellate Tribunal CESTAT, CHENNAI dealt with the application for waiver of pre-deposit of duty and penalty amounting to Rs. 26,78,241/- and Rs. 5,25,000/- respectively. The denial of the benefit of project import to a single machine, "Extruder ZSK 58 MEGA Compounder with standard accessories," imported for substantial expansion of an industrial plant was the central issue. The denial was based on the interpretation of para 3 (a) regulation (ii) of the Project Imports Regulations, 1986 (PIR).
Upon analysis, the Tribunal found that there was no explicit provision in Para 3 of the PIR that disallowed the project import benefit to a single machine. It was noted that an industrial plant could consist of one or more units, and the imported machinery was intended for substantial expansion of the existing unit of the industrial plant, regardless of whether it was a single machine or a composite machine. Additionally, the Tribunal considered a recommendation letter from the Department of Chemicals & Petrochemicals supporting the extension of the benefit under the PIR to the imported machinery.
Consequently, the Tribunal concluded that a prima facie case had been established for unconditional waiver of the pre-deposit of duty and penalty. Hence, the Tribunal granted the waiver and stayed the recovery of the amounts during the pendency of the appeal. The order was pronounced and dictated in the open court by the Vice-President, Ms. Jyoti Balasundaram.
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2009 (7) TMI 957
Issues involved: Interpretation of penalty provisions under Section 112(a)(ii) of the Customs Act, 1962.
Summary:
1. The appeal concerns the imposition of penalty under Section 112(a)(ii) of the Customs Act, 1962, with the main question being the permissibility of imposing a penalty less than Rs. 5,000.
2. Section 112(a)(ii) stipulates that the penalty should not exceed the duty sought to be evaded on the goods or Rs. 5,000, whichever is greater. The Commissioner (Appeals) incorrectly held that the upper limit of penalty imposition is Rs. 5,000, disregarding the value of the goods involved. The correct interpretation is that if the value of the goods is less than Rs. 5,000, the penalty should be Rs. 5,000; if the value exceeds Rs. 5,000, the penalty should match the value of the goods. The Commissioner's misinterpretation is evident from the appeal.
3. The impugned order is overturned, and the case is remanded to the original authority for a proper quantification of the penalty in accordance with the law, with a suggested timeline of three months for completion.
4. The appeals are disposed of accordingly.
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2009 (7) TMI 956
Issues involved: Confirmation of duty demand on man-made processed fabrics based on grey challans and shrinkages, time-barred show cause notice, jurisdiction of Commissioner (Appeals), imposition of penalty equal to duty.
The judgment deals with the confirmation of duty demand amounting to Rs. 2,13,541/- on man-made processed fabrics, based on grey challans and shrinkages. The appellants did not dispute the duty demand but argued that the show cause notice was issued beyond one year from the date of search, making it time-barred. They also contended that the Commissioner (Appeals) had no jurisdiction to pass orders. Despite no appearance from the appellants during the hearing, the matter was taken for decision on merits.
Regarding the time-barred show cause notice, the appellants failed to provide justification for their claim. Statements were recorded from 15 merchant manufacturers after officers visited the appellants' unit, indicating that action was indeed taken by the department. The contention that the Commissioner (Appeals) lacked jurisdiction was not raised before the Commissioner and no supporting evidence was presented. The appellants had been offered multiple personal hearings but requested adjournments each time, leading to an ex parte decision by the Commissioner. The appellants were directed to pay interest and 25% of the duty as penalty within 30 days, as per the provisions of Section 11AC and a Delhi High Court decision. Failure to pay the interest amount within the specified time would result in an automatic increase in the penalty equal to the duty amount.
The appeal was decided in favor of confirming the duty demand and imposing the penalty as specified, with clear instructions for payment deadlines to be adhered to by the appellants.
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2009 (7) TMI 955
Issues:
1. Prayer for early hearing
2. Stay of the proceedings in Appeal No. 20/09 before the Commissioner (Appeals)
3. Grant of stay of the order passed by the original authority
Analysis:
Prayer for Early Hearing:
The appellant sought early hearing, but the facts presented did not justify granting such relief. The application for early hearing was rejected as it lacked sufficient justification. The tribunal did not find grounds to support the appellant's request for expedited proceedings.
Stay of the Proceedings in Appeal No. 20/09 before the Commissioner (Appeals):
The appellant mistakenly sought a stay of the proceedings in Appeal No. 20/09 before the Commissioner (Appeals) when they intended to seek a stay of the order passed by the original authority rejecting their application for remission. The Commissioner (Appeals) had already directed the appellants to deposit 25% of the duty amount while staying the recovery of the remaining duty amount demanded by the lower authority. Since the Commissioner (Appeals) was handling the matter related to the duty demand recovery, distinct from the Tribunal proceedings, there was no basis for the Tribunal to grant a stay of the original authority's order. The original authority's order rejecting the remission application was deemed non-executable, and the application did not pertain to proceedings following the remission application rejection. Consequently, the Tribunal found no grounds to grant a stay of the original authority's order.
In conclusion, the application for early hearing was rejected due to insufficient justification. The request for a stay of the proceedings in Appeal No. 20/09 before the Commissioner (Appeals) was deemed unnecessary as the Commissioner (Appeals) was already handling the matter related to duty demand recovery. The Tribunal found no basis to grant a stay of the order passed by the original authority rejecting the remission application, as it was non-executable and not related to subsequent proceedings. The application was disposed of accordingly.
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2009 (7) TMI 954
Issues:
1. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002 on a second stage dealer for issuing Cenvatable invoices without physically supplying goods.
2. Applicability of Rule 25 and Rule 26 to a dealer in the context of contravention of provisions of law with intent to evade payment of duty.
3. Examination of intent to evade payment of duty and the absence of invoking Rule 26 against the appellant.
Analysis:
1. The judgment addresses the imposition of a penalty under Rule 25 of the Central Excise Rules, 2002 on the appellant, a second stage dealer, for issuing Cenvatable invoices without physically supplying goods. The lower authorities imposed a penalty based on the appellant's actions in October 2004, where they issued invoices without actual delivery of goods to enable purchasers to avail CENVAT credit. The appellant had obtained a similar invoice from a first stage dealer in Delhi without receiving goods, leading to a show-cause notice. The appellant's counsel argued that Rule 25 is not applicable to dealers, highlighting a lack of duty liability for a second stage dealer in goods purchased from a first stage dealer. The counsel also pointed out the difficulty in applying Rule 26 to the case, especially considering the amendment introducing penalties for issuing invoices without goods delivery post-1-3-2007.
2. The judgment delves into the applicability of Rule 25 and Rule 26 to dealers regarding contravention of provisions of law with intent to evade payment of duty. The Tribunal considered the submissions and found that the show-cause notice invoked Rule 25 without establishing intent to evade duty. The rule making authority's acknowledgment of the non-applicability of Rule 25 to registered dealers, as seen in the incorporation of a special penal provision under Rule 26 from 1-3-2007, was noted. Despite this, Rule 26 was not invoked against the appellant, raising questions about the correct application of penalty provisions to dealers like the appellant.
3. The judgment concludes by stating that the appellant has made out a prima facie case against the penalty, leading to a waiver of pre-deposit and a stay of recovery concerning the penalty amount. This decision is based on the lack of established intent to evade payment of duty and the absence of invoking Rule 26 against the appellant, highlighting the need for a proper application of penalty provisions in cases involving dealers and the issuance of invoices without goods delivery.
This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision regarding the imposition of penalties on a second stage dealer under the Central Excise Rules.
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2009 (7) TMI 953
The Appellate Tribunal CESTAT, Chennai granted waiver of pre-deposit and penalty in a case involving demand on scrapped plastic containers used for mineral water, citing precedents where waste and scrap from broken bottles during filling process were not considered excisable. The waiver was based on the applicability of previous decisions upheld by the Apex Court.
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2009 (7) TMI 952
Issues Involved:
1. Wrongful availing of Cenvat credit on structural items and other materials.
2. Applicability of extended period of limitation.
3. Prima facie case for grant of stay of the impugned order.
4. Financial hardship and requirement for deposit of duty amount.
Issue-wise Detailed Analysis:
1. Wrongful Availing of Cenvat Credit:
The appellants challenged the order disallowing Cenvat credit on structural items like angles, channels, beams, plates, oxygen gas, and building electrodes, arguing these were used in the manufacture of final products. The Department contended these items were used for repair or maintenance, not as inputs or capital goods in manufacturing. The Tribunal referred to the Apex Court's decision in J.K. Cotton Spg. & Wvg Mills Co. Ltd., which clarified that goods must be directly related to the production process to qualify for Cenvat credit. The Tribunal concluded that goods used in structural fabrication do not qualify as inputs in manufacturing the final product, rejecting the appellants' claim.
2. Applicability of Extended Period of Limitation:
The appellants argued that the major part of the claim was barred by the law of limitation and that the Department was aware of their Cenvat credit practices since 2004. The Department invoked the extended period of limitation, alleging suppression of facts with intent to evade duty. The Tribunal upheld this, noting that the appellants had not voluntarily declared the emergence of the structures in their ER-1 returns, which amounted to suppression of facts. The Tribunal found no material evidence to contradict the Commissioner's finding and agreed that the extended period was rightly invoked.
3. Prima Facie Case for Grant of Stay:
The Tribunal assessed whether the appellants made a prima facie case for staying the impugned order. It considered the factual aspects and the law laid down by the Apex Court, concluding that the appellants did not establish a prima facie case. The Tribunal noted that the goods in question were used in structural fabrication, not directly in manufacturing the final product, thus no prima facie case for stay was made out.
4. Financial Hardship and Requirement for Deposit of Duty Amount:
The Tribunal evaluated the appellants' claim of financial hardship, noting that Section 35F requires a clear demonstration of financial hardship, which the appellants failed to provide. Consequently, the Tribunal ordered the deposit of the entire duty amount within 12 weeks but granted a waiver for the interest and penalty amounts during the appeal's pendency.
Conclusion:
The Tribunal dismissed the stay application concerning the duty amount but allowed it partially by waiving the interest and penalty amounts. The appellants were directed to deposit the duty amount within 12 weeks and report compliance. The stay application was disposed of accordingly, with compliance to be reported on 23-10-09.
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2009 (7) TMI 950
Issues involved: Imposition of penalty u/s 11AC for non-payment of duty and failure to clear goods consignment-wise.
Summary:
1. The appellant challenged the imposition of a penalty of 100% of duty due to financial difficulties under new management. The new management discovered unpaid duty for April 2006, rectified the issue, and paid the duty with interest before the adjudication order. The appellant argued that no penalty should be imposed as there was no intention to evade duty, citing relevant decisions. The SDR argued that a violation of Rule 8(3A) occurred, justifying exemplary penalty. The appellant pointed out that Rule 8(3A) was not applicable during the relevant time.
2. The Tribunal found that the penalty was imposed under Section 11AC but noted that it was not a case of fraud, suppression, or misstatement to evade duty. Referring to previous cases, it was determined that when goods are cleared with proper documentation and the only issue is delayed duty payment, Rule 27 applies, which imposes a maximum penalty of Rs. 5,000. Since the appellant paid all duties and interest without any intention to evade duty, the penalty was reduced to Rs. 5,000.
3. As the appellant paid all duties and interest without any intention to evade duty, the penalty was reduced to Rs. 5,000 under Rule 27. The appeal was rejected except for the modification in the penalty amount.
*(Pronounced in Court on 14-7-2009)*
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2009 (7) TMI 949
Stay/Dispensation of pre-deposit - Clandestine manufacture - Held that: - It is thus clear that once the quantum of production can be ascertained on the basis of electricity consumption by the factory the variation of the quantum of production can certainly be related to the variation in the consumption of electricity. That being so, that, in a given case it may not be possible to arrive at the exact figure of production on account of certain loss of electricity in the process of manufacture, but certainly an approximate figure in that regard can be ascertained. In such a case, primarily it is for the manufacturer to satisfy the adjudicating authority as to the exact quantum of production during the period based on consumption of electricity in that regard.
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2009 (7) TMI 948
Issues involved: Clandestine removal of goods without payment of duty, imposition of penalty on the appellants.
Summary:
1. The case involved the clandestine removal of goods without payment of duty by M/s. Pragati Industries, as evidenced by the recovery of pocket diaries showing illicit clearances.
2. Statements of the proprietor, supervisor, and clerk of the unit admitted to the clandestine clearances, supported by corroborative evidence from buyers who confirmed receiving goods without proper invoices.
3. The Commissioner initiated proceedings resulting in a demand of duty and penalty amounting to Rs. 50,75,400/- against M/s. Pragati Industries.
4. The appellant challenged the order on the grounds of lack of access to documents for representation, but the Tribunal found no merit in the argument as the appellant was provided with all necessary documents and opportunities for hearings.
5. The Tribunal upheld the findings of clandestine removal based on the evidence, confirming the duty demand and imposing a penalty of Rs. 40 lakhs under Section 11AC of CEA, 1944 on M/s. Pragati Industries.
6. The penalty of Rs. 10 lakhs imposed on the proprietor was set aside as separate penalties on the unit and its proprietor cannot be imposed as per settled law.
7. Penalties of Rs. 1 lakh each imposed on the supervisor and clerk were reduced to Rs. 10,000/- each considering their roles as employees following directions of the proprietor.
8. The appeals were disposed of with the above decisions pronounced on 3-7-2009.
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2009 (7) TMI 947
The Appellate Tribunal CESTAT, Kolkata dismissed the appeal filed by Revenue against an order setting aside a demand of Rs. 34,095/- and penalty of Rs. 10,000/- due to considerable delay in adjudication order, issued almost 15 years after the initial visit to the business premises in January 1989.
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2009 (7) TMI 946
Issues involved: Stay petition against the order of the Commissioner sanctioning refund under Cenvat credit Rules due to stopping of manufacturing activity.
Summary:
The Appellate Tribunal CESTAT, New Delhi heard a stay petition filed by the department against the Commissioner's order sanctioning a refund of Rs. 20,85,030 from the Cenvat account of the respondents, who had stopped manufacturing activity and were unable to utilize the amount. The Jt. CDR contended that Rule 5 does not allow for a refund in such a situation and sought a stay on the order. On the other hand, the Advocate for the respondents argued that the Commissioner's order was in line with the Tribunal's decision in a previous case and a High Court decision, emphasizing that the recommendation to the Jurisdictional Authority before filing an appeal was not legal. After considering the submissions, the Tribunal found that the refund sanctioned by the Commissioner was prima facie against the provisions of Cenvat credit Rules, leading to the decision to stay the operation of the order until the appeal is disposed of.
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2009 (7) TMI 945
Issues involved: Application of mind, arbitrary exercise of powers by adjudicating authority, failure to offer cross-examination opportunity, non-appearance of witnesses, confirmation of demand, penalty imposition, goods confiscation, lack of reasoning in order.
The judgment pertains to an appeal before the Appellate Tribunal CESTAT, New Delhi, where the impugned order was challenged primarily on the grounds of lack of application of mind and arbitrary exercise of powers by the adjudicating authority.
The records revealed that despite specific directions from the Apex Court in earlier rounds of litigation, the authority failed to offer the appellants an opportunity to cross-examine persons whose statements were relied upon during the investigation. This failure led to subsequent remands and delays in the case.
Although notices were issued for cross-examination, the witnesses did not appear, leading the authority to conclude that their non-appearance was due to their relationship with the appellants. Subsequently, the authority confirmed the demand, imposed penalties, and ordered goods confiscation without addressing the raised issues or providing reasoning for its decision.
The adjudicating authority's failure to analyze the evidence, consider the raised points, and provide proper reasoning indicated an arbitrary exercise of power. The judgment emphasized the importance of a thorough analysis of the record, consideration of raised points, and the provision of reasoned findings by the adjudicating authority.
Given the prolonged duration of the case since the issuance of the show cause notice in 1978, the Tribunal urged cooperation from the appellants and prompt action from the adjudicating authority for expeditious resolution before the end of the year.
Ultimately, the appeal was disposed of with a direction to set aside the impugned order and remand the matter for a fresh decision by the concerned authority, emphasizing compliance with the directions of the Supreme Court and the Tribunal. It was clarified that no opinion on the merits of the case was expressed in the judgment.
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2009 (7) TMI 944
Issues:
1. Whether the process of pickling and oiling on HR Steel Sheets and Strips amounts to manufacture under Section 2(f) of the Central Excise Act, 1944.
2. If pickling and oiling are not considered as manufacture, whether the Cenvat credit availed for Excise duty payment should be disallowed.
Analysis:
Issue 1:
The case involves a dispute regarding whether the process of pickling and oiling conducted on HR Steel Sheets and Strips constitutes "manufacture" as per Section 2(f) of the Central Excise Act, 1944. The applicants argued that their activities amounted to manufacturing as they were engaged in de-coiling, cutting, and slitting of HR steel coils, along with pickling and oiling. Initially, the department insisted on duty payment for these processes based on a circular. However, a subsequent circular clarified that pickling and oiling do not amount to manufacture. The applicants contended that since the Tariff Act has separate headings for pickled and unpickled sheets, their activities qualified as manufacturing. The Commissioner (Appeals) disagreed, stating that the processes in question do not amount to manufacture as per the Board's circular.
Issue 2:
Regarding the availability of Cenvat credit if pickling and oiling are not considered manufacturing, the Tribunal examined the legal position. It was established that if the Excise Department collected duty on final products, they cannot disallow Cenvat credit on inputs, as this would be contradictory. The Tribunal cited several case laws to support this principle, emphasizing that if a process is not deemed manufacturing, duty paid on final products should be treated as a reversal of ineligible credit on inputs. The Tribunal noted that the applicants had used the credit for duty payments and had not misused it for personal gain. Additionally, the applicants' communications with the Department indicated their willingness to clarify whether pickling and oiling constituted manufacture, demonstrating no intent to wrongly avail Cenvat credit.
In conclusion, the Tribunal found that the applicants had a strong case for waiving the pre-deposit of duties, interest, and penalties imposed. Consequently, the recovery of these amounts was stayed pending the appeal's final disposal.
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2009 (7) TMI 943
Issues:
1. Application for early hearing and pre-ponement of hearing date.
2. Objection raised regarding Circular dated 6-7-2009 and its applicability.
3. Revenue amount involved in the matter.
4. Applicant's citizenship and passport impoundment.
5. Complaint filed for prosecution against the applicant.
6. Consideration of grounds for out-of-turn hearing.
Analysis:
1. The appellant filed an application for early hearing to expedite the appeal's disposal. The hearing was initially scheduled for 6-7-2009, but due to the absence of a Bench, it was rescheduled for 27-7-2009. Upon the appellant's request, the hearing date was pre-poned to 23-7-2009.
2. The respondent raised an objection citing a Circular dated 6-7-2009, requiring a five-day waiting period before mentioning any matter before the Bench. However, it was clarified that the Circular applied to cases not listed before the Bench initially. Since the appellant's application was already listed for 6-7-2009, the objection was deemed frivolous and rejected.
3. The Tribunal noted that the revenue involved exceeded Rs. 1.00 crore, indicating the significant financial implications of the case.
4. It was highlighted that the appellant, an American Citizen of Indian origin residing in New York, had his passport impounded by the Department, and a complaint for prosecution had been filed against him before the ACMM.
5. After hearing the arguments, the Tribunal found the grounds presented by the appellant sufficient for considering an out-of-turn hearing. Consequently, the application for early hearing was granted, and the appeal was scheduled for final disposal on 28-8-2009.
This detailed analysis covers the various issues addressed in the judgment, including the procedural aspects, financial implications, and personal circumstances of the appellant, leading to the decision for an early hearing and final disposal of the appeal.
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2009 (7) TMI 942
The appellate tribunal CESTAT, New Delhi, consisting of Justice R.M.S. Khandeparkar and Shri M. Veeraiyan, heard an appeal against an order by the Commissioner (Appeals) related to a state government-owned company manufacturing footwear. The company sold products directly to customers based on MRP printed on the footwear and to organizations like home guards, police, and navy on a contractual basis. The appellant paid duty based on MRP minus deductions, but a show cause notice proposed valuation based on the contract price. The notice alleged extra collections from institutional customers and confirmed a differential duty, interest, and penalty. The tribunal noted that MRP was printed on the footwear, but there was no evidence of sales above MRP to institutional buyers. Consequently, the tribunal set aside the lower authorities' orders, allowing the appeal with relief.
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2009 (7) TMI 941
Issues: Failure of advocate to appear leading to ex parte proceedings, requirement of pre-deposit under section 35F, recall of order, extension of time for deposit.
Failure of advocate to appear leading to ex parte proceedings:
The case involves a situation where the advocate representing the appellants failed to appear on the date of the hearing, resulting in the matter proceeding ex parte. The appellants claimed that they were not aware of the requirement to deposit the entire amount demanded until they received a copy of the order. The Tribunal noted that although the advocate's absence was cited as the reason for seeking a recall of the order, it was emphasized that the mere presence of the advocate would not have been sufficient, especially in cases involving pre-deposit requirements. The party itself or someone representing the party needed to provide appropriate instructions to the advocate regarding the capacity to arrange the necessary funds for deposit as mandated by the Tribunal's order.
Requirement of pre-deposit under section 35F:
The Tribunal highlighted the significance of compliance with the pre-deposit requirement under section 35F. It was clarified that in cases where there is a request for waiver of pre-deposit, it is not solely the advocate's presence that matters; the party must ensure that the advocate is briefed properly regarding the party's capacity to arrange the funds necessary for the deposit. The Tribunal emphasized that the advocate's absence alone was not a sufficient ground to recall the order, as the party or a representative should have been present to provide the required instructions.
Recall of order:
Despite the advocate's absence being cited as the reason for seeking a recall of the order, the Tribunal found that this reason alone was not sufficient. However, considering that the appellants had only become aware of the order after its issuance, the Tribunal granted an extension of time for the deposit. The appellants were given an additional six weeks to comply with the deposit requirement, with a reporting compliance date set for a later hearing.
Extension of time for deposit:
In response to the appellants' request for an extension of time to deposit the required amount, the Tribunal acknowledged the circumstances surrounding the delay in becoming aware of the order. Consequently, the Tribunal granted the appellants an extension of six weeks to fulfill the deposit requirement. The matter was scheduled to be revisited for compliance reporting on a specified date following the extended deadline.
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2009 (7) TMI 940
Issues:
Interpretation of Cenvat credit rules regarding classification of inputs used in manufacturing process as capital goods; Whether steel items like plates, angles, channels, and joists qualify as inputs for final products like sponge iron, runners, and risers; Consideration of goods embedded to earth as immovable property affecting Cenvat credit eligibility.
Analysis:
The case involved a manufacturer of sponge iron, ingots, runners, and risers who utilized steel items in the fabrication of plant and machinery. The Department contended that the resulting products from these structural items were embedded to earth, thus challenging the classification of these items as goods and the eligibility of Cenvat credit. The Commissioner upheld the demand of duty disallowing Cenvat credit, imposing penalties and interest.
The appellant argued that the definition of "input" under Cenvat credit rules encompasses goods used directly or indirectly in manufacturing finished products, emphasizing that inputs need not be part of the final products. They cited judicial precedents to support the broad interpretation of the term "in relation to" and contended that items embedded to earth should not be considered immovable property. The appellant asserted that the inputs used were related to products akin to those addressed in the cited judgments.
In defense of the Commissioner's order, the Joint CDR highlighted the specific definitions of "inputs," "final products," and "capital goods" in the Cenvat Credit Rules, asserting that inputs must be linked to final products specified in the rules. The argument posited that steel items like plates, angles, channels, and joists were not inputs for sponge iron, runners, or ingots but for structural items, which were deemed immovable goods or machinery not subject to duty, thus challenging the Cenvat credit claim.
Upon careful consideration, the Tribunal disagreed with the appellant's contention that sponge iron, runners, and risers could be treated as final products in relation to the steel items used. Consequently, the Tribunal held that the appellant failed to establish merit for waiving the pre-deposit of the duty demanded. However, in a favorable gesture, the Tribunal decided to waive the pre-deposit of penalty and interest given the circumstances. The appellant was directed to deposit the entire duty amount within a specified timeline, with the waiver of interest and penalty contingent on compliance until the appeal's disposal.
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2009 (7) TMI 938
Issues involved: Claim of deemed Modvat credit on inputs; Rejection of claim by authorities; Transportation of goods from Tamil Nadu to appellant's factory; Applicability of Circulars by the Board.
Summary:
The appellant, engaged in the manufacture of fabrics, filed declarations of inputs and final products for availing transitional credit u/s 3 of Rule 9(A) of the Cenvat Credit Rules, 2003. The authorities rejected their claim of deemed Modvat credit due to discrepancies in the declarations. The appellant presented lorry receipts as evidence of goods being transported, but this was dismissed by the Commissioner (Appeals) citing the inability to verify transportation to the factory.
In a related case, the Tribunal held that deemed credit can be availed for materials at locations other than registered premises, as per Board Circulars. Non-disclosure of location and transporter details cannot be a basis for denying deemed credit. Another Circular allowed manufacturers to file additional declarations by a specified date to claim one-time credit on stock. The Tribunal emphasized that even if stock had not physically reached the appellant's premises but was purchased by them, deemed credit should be granted.
Therefore, the Tribunal set aside the impugned orders and remanded the matter for fresh consideration by the Original Adjudicating Authority in light of the relevant Circulars and the Tribunal's decision, ultimately allowing the appeal by way of remand.
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