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2005 (6) TMI 475
Deductions u/s 80-IB - The amount of duty drawback is eligible or not for deduction u/s 80-IB - industrial undertaking - HELD THAT:- The issue involved in the instant case of the assessee under consideration before me is also identical because in this case also the assessee has claimed deduction for the amount of duty drawback u/s 80-IB of the Act claiming the same to be an income derived from a business of industrial undertaking u/s 80-IB of the Act. Ratio of the decision of the Hon’ble Delhi High Court in the case of Ritesh Industries Ltd. [2004 (9) TMI 36 - DELHI HIGH COURT] fully applies to the facts and the issue involved in the instant case of the assessee and so, respectfully following the decision (supra), which is binding upon this Tribunal, being a decision of jurisdictional High Court, it is held that a sum received by the assessee on account of duty drawback cannot be considered as income derived from the business of an industrial undertaking so as to entitle the assessee to a deduction u/s 80-IB and, hence, the order of the CIT (Appeals) in allowing the impugned deduction is set aside. Ground of appeal taken by the Revenue is allowed.
In the result, the appeal filed by the Revenue is allowed.
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2005 (6) TMI 474
Appellate Tribunal - condonation of the delay - Unexplained Cash credits - HELD THAT:- In our opinion there is no mala fide imputable to the assessee. The delay in our considered opinion in filing the appeal is the result of some omission on the part of its Tax Consultant’s staff. It must be remembered that in every case of delay there can be some lapse of the litigant concerned. That alone is not enough to turn down the plea and to shut the doors against him. If the explanation does not smack of mala fide or it is not put forth as a part of dilatory strategy, the Courts must show utmost consideration to such litigant. As observed by the Hon’ble Supreme Court in the case of N. Balakrishnan [1998 (9) TMI 602 - SUPREME COURT] the length of delay is immaterial. It is the acceptability of the explanation. That is the only criteria before condoning the delay. Therefore, taking into consideration the overall circumstances we condone the delay in filing the appeal and proceed to decide it on merit.
According to section 68 of the Act if any sum is found credited in the books of account of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not satisfactory in the opinion of Assessing Officer then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Therefore, for explaining the cash credit found to be recorded in the books of an assessee he is required to explain the source of such credit, identity of the creditors and genuineness of the transaction. This section contemplate that onus is upon the assessee to explain the availability of the cash in the books of account. Once the assessee discharged its primary onus it will be for the revenue to prove that evidence produced by the assessee are not reliable. In the present case assessee failed to discharge the primary onus put upon it.
Even for the sake of arguments we ignore proceedings taken by the Assessing Officer u/s 133(6) for procuring information from the creditors or information gathered from the bankers u/s 131 then no other evidence is available justifying the claim of the assessee.
As far as grant of opportunity of hearing is concerned. ld. First appellate authority has reproduced the written submission of the assessee in para 5 of his order. Ld. Assessing Officer has also granted sufficient opportunities but it is the assessee who failed to submit the requisite details. It did not choose to comply with the directions of the Assessing Officer in the assessment proceedings. When a specific finding of fact has been recorded against it, assessee did not rebut that finding by producing sufficient material, then did not bother to challenge the order of the ld. CIT(A) in time. Even before us did not file any paper book and failed to show us the alleged confirmation. Hence taking into consideration the overall casual approach of the assessee at every stage, more particularly keeping in view the stand of the assessee that creditors are family members of the directors from whom it can easily file confirmation etc.
Therefore, in our opinion assessee cannot draw any benefit from both these decisions. We find no merit in this appeal. It is rejected.
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2005 (6) TMI 473
Issues Involved:
1. Reopening of assessments under section 147.
2. Assessment of enhanced rent received subsequent to the financial years under assessment under the head "Income from house property".
3. Levy of interest under sections 234B and 234C of the Act.
Issue-wise Detailed Analysis:
1. Reopening of Assessments under Section 147:
The assessee contended that the reopening of assessments under section 147 was invalid, arguing that there was no non-disclosure of material facts on their part. The assessee had disclosed rental income under the head "income from house property" during the original assessments, and no additional rent or service charges were received during the financial years under consideration. The right to receive higher rent accrued only on 6-11-1995, and the provisions of section 25B, which were introduced later, were not applicable retrospectively. The Tribunal held that the reopening of assessments was valid since the substantial fact of receiving additional rent came to the notice of the Assessing Officer only during the assessment proceedings for 1996-97. The Tribunal cited the judgments in Raymond Woollen Mills Ltd. v. ITO and G. Sukesh v. Dy. CIT to support the reopening of assessments under section 147.
2. Assessment of Enhanced Rent under "Income from House Property":
The assessee argued that the enhanced rent could not be taxed in the assessment years under consideration as the right to receive the higher rent accrued only in the financial year 1995-96. They relied on the judgment in Hope (India) Ltd. v. CIT, which held that enhanced rent agreed upon after the close of the previous year could not be assessed as income from house property for that year. The Tribunal referred to the judgments in Hamilton & Co. (P.) Ltd. v. CIT and Hope (India) Ltd. v. CIT, concluding that arrears of rent received in a subsequent year could not be taxed in the year of receipt or retrospectively in earlier years. The Tribunal noted that section 25B, introduced by the Finance Act, 2000, applied prospectively from assessment year 2001-02 and did not affect the assessment years in question. Consequently, the Tribunal deleted the additions made by the Assessing Officer for the arrears of rent received by the assessee after the expiry of the relevant financial years.
3. Levy of Interest under Sections 234B and 234C:
The assessee challenged the levy of interest under sections 234B and 234C, arguing that the Assessing Officer had merely stated, "Interest is charged under sections 234B and 234C as per rules," without proper justification. The Tribunal found no substance in these grounds of appeal, noting that the Assessing Officer had specifically ordered for charging of interest under sections 234B and 234C. However, the Tribunal directed the Assessing Officer to re-compute the amount of interest under sections 234B and 234C, if any, after giving effect to the order.
Conclusion:
The Tribunal partly allowed the appeals, upholding the reopening of assessments under section 147 but deleting the additions made for arrears of rent received after the relevant financial years. The levy of interest under sections 234B and 234C was upheld, with directions for re-computation if necessary.
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2005 (6) TMI 472
Issues Involved:
1. Classification of imported multi-function machines under the appropriate Customs Tariff Heading.
Issue-wise Detailed Analysis:
1. Classification of multi-function machines:
Arguments by the Appellant:
The appellant contended that the multi-function machines, which include printing, copying, faxing, and scanning capabilities, should be classified under Heading 8471.60 as output units of Automatic Data Processing Machines (ADPM). They argued that the principal function of these machines is printing, supported by the fact that 75% to 80% of the cost of the components is attributed to the print function. They relied on Note 5(D) to Chapter 84, which states that printers satisfying certain conditions must be classified under Heading 84.71. They also cited previous Tribunal decisions in Xerox Modicorpn. Ltd. and MX Software Services Ltd., where similar multi-function machines were classified under Heading 8471.60.
Arguments by the Respondent:
The respondent argued that the machines should be classified under Heading 8472.90 as office machines. They emphasized that the machines can function independently of external ADPMs, performing tasks like copying and scanning in stand-alone mode. They cited Chapter Note 5(B)(c) and argued that since these machines are primarily used for commercial purposes in offices and shops, they should fall under Heading 8472.90.
Findings by the Tribunal:
The Tribunal reviewed the arguments, catalogues, and literature of the machines. It was noted that the machines are multi-functional and can operate independently without being connected to ADPMs. The Tribunal acknowledged that both lower authorities had classified the machines under Heading 8472.90 due to their various standalone functions. However, the Tribunal also considered the appellant's reliance on previous decisions where similar machines were classified under Heading 8471.60.
Separate Judgments:
Majority Opinion (Member (Judicial) and Vice-President):
The majority opinion held that the machines should be classified under Heading 8471.60. They emphasized that the principal function of the machines is printing, and they satisfy the conditions of Note 5(D) to Chapter 84. They supported their decision by referring to the previous Tribunal decisions in Xerox Modicorpn. Ltd. and MX Software Services Ltd., which classified similar machines under Heading 8471.60. They concluded that the machines are principally designed to function as printers connected to ADPMs and should be classified accordingly.
Dissenting Opinion (Member (Technical)):
The dissenting opinion argued that the machines should be classified under Heading 8472.90. The dissenting member emphasized that the machines have standalone capabilities and can operate independently of ADPMs. They argued that the machines are primarily used in commercial settings for tasks like copying and scanning, which aligns with the classification under Heading 8472.90.
Final Order:
In view of the majority decision, the appeal was allowed, and the machines were classified under Chapter Heading 8471.60 of the Customs Tariff Act, 1975.
Conclusion:
The Tribunal's final decision, based on the majority opinion, classified the imported multi-function machines under Heading 8471.60, recognizing their principal function as printing and their connectivity to ADPMs.
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2005 (6) TMI 471
Issues:
Appeal against Order-in-Appeal dated 11-2-2005 passed by the Commissioner of Central Excise (Appeals), Mumbai regarding the manufacture and clearance of embossed pleated fabrics under Chapter Heading No. 54.06 of CETA, 1985, and the demand of duty under Section 11A of the Central Excise Act, 1944.
Analysis:
The appellants, engaged in manufacturing and clearing embossed pleated fabrics, were charged Central Excise basic duty and additional excise duty. The Central Excise Officers booked a case for clandestine clearance without duty payment. Show Cause Notices were issued demanding duty under Section 11A of the Act. The Joint Commissioner confirmed duty with interest and imposed a penalty upheld by the Commissioner of Central Excise (Appeals), Mumbai, leading to the appeal.
The Commissioner noted that the Tribunal's earlier judgment in the appellant's case under the erstwhile Central Excise Tariff was no longer applicable due to changes in the Central Excise Act, 1985. The Commissioner held that the process did not fall under "Any other process" as per Section 2(f) of the Act, referencing the Supreme Court's decision in M/s. Siddheswari Cotton Mills.
The Tribunal, in a previous order related to a similar issue in the appellant's case, followed the Supreme Court's decision and a Section 37B order, stating that the demand based on the Board's Circular would have effect only from the date of its publication. As the impugned order period was after the Section 37B order, the Tribunal set aside the Commissioner (Appeals) decision, aligning with the earlier Tribunal order and allowing the appeal.
In conclusion, the Tribunal allowed the appeal, setting aside the impugned order, based on the application of the Supreme Court's decision and the Section 37B order, determining that the demand cannot be sustained for the period in question.
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2005 (6) TMI 470
Issues:
Appeal against order-in-appeal regarding import of natural rubber under DGFT Notification; Invocation of Section 111(d) of Customs Act; Jurisdiction of DGFT Notification; Validity of import at port other than Kolkata and Vishakhapatnam.
Analysis:
The appellant filed appeals against the order-in-appeal passed by the Commissioner (Appeals) regarding the import of natural rubber. The goods were confiscated, and penalties were imposed for importing natural rubber at a port other than Kolkata and Vishakhapatnam, as per DGFT Notification No. 41(RE-2001)/1997-2002. The appellant contended that Section 111(d) of the Customs Act cannot be invoked as the import was not unlawful and the DGFT notification was without jurisdiction.
The Tribunal noted that the DGFT Notification dated 19-12-2001 permitted the import of natural rubber only at the ports of Kolkata and Vishakhapatnam. The notification was issued under the Foreign Trade (Development & Regulation) Act, 1992. The Tribunal held that it cannot question the jurisdiction of the notification and found no infirmity in the impugned order as the import of natural rubber was made at a port other than the specified ones. Therefore, the appeals were dismissed.
In conclusion, the Tribunal upheld the penalties and confiscation imposed on the appellant for importing natural rubber at a port not specified in the DGFT Notification. The Tribunal's decision was based on the specific provisions of the notification and the limitations on import locations outlined therein. The appellant's argument regarding the jurisdiction of the notification was rejected, emphasizing the importance of compliance with the specified import regulations.
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2005 (6) TMI 469
Issues:
1. Confiscation of currency seized from the premises.
2. Excess receipt of inputs and clearance of finished goods without duty.
3. Reliance on private record and movement of registered trucks for evidence.
Analysis:
1. Confiscation of Currency:
The case involved the recovery of a significant amount from the Director's premises, suspected to be related to the clearance of excisable goods without duty payment. The appellants clarified the source of the money, and subsequent statements supported this explanation. The Tribunal found that the confiscation of the currency was not justified as there was no evidence of shortage of inputs or clearance of final products without duty payment.
2. Excess Receipt of Inputs and Clearance of Finished Goods without Duty:
The appellants were accused of not accounting for a substantial quantity of raw materials and clearing finished goods without paying duty. Discrepancies between the statutory records and private records were noted. The Tribunal examined various slips recovered from the Director, comparing the quantities of inputs mentioned in them with the statutory records. It was found that the entries in the private records were approximate and did not accurately reflect the actual stock position. The appellants provided detailed charts showing the clearance of goods on duty payment, albeit with some discrepancies in customer names. Ultimately, the Tribunal concluded that the demand based on excess raw material receipt and duty-free finished goods clearance was not sustainable.
3. Reliance on Private Record and Truck Movements:
The Revenue relied on the private record to argue that the stock position was higher than recorded in statutory documents. Additionally, the movement of registered trucks was cited as evidence of finished goods clearance without duty payment. The appellants contested these claims, stating that the excess raw material received was used in production, and the trucks may have been used for various purposes other than carrying finished goods. The Tribunal noted the discrepancies in stock quantities but emphasized that the private record entries were approximate. The lack of concrete evidence linking truck movements to duty-free goods clearance led the Tribunal to rule in favor of the appellants.
In conclusion, the Tribunal set aside the impugned order, allowing the appeals on the grounds that there was no shortage of inputs, no clearance of final products without duty payment, and insufficient evidence to support the confiscation of the currency.
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2005 (6) TMI 468
Issues:
1. Appeal against Order-in-Appeal dated 12-11-1993 passed by the Collector of Customs (Appeals), Custom House, Chennai regarding short shipment of goods and refund claim.
Analysis:
The appeal before the Appellate Tribunal CESTAT, Chennai was filed by the Revenue against the Order-in-Appeal passed by the Collector of Customs (Appeals) concerning a dispute over the short shipment of goods by the respondent. The respondent had cleared certain items by paying duty, but it was later discovered that a specific item was short shipped. The foreign supplier also confirmed the short supply of this item. Consequently, the respondents filed a refund claim as they had already paid duty on the entire quantity. The original authority rejected the refund claim citing the unavailability of documents proving the short shipment at the time of goods examination.
Upon hearing the arguments, the Tribunal found that the foreign supplier had indeed short shipped the goods, and the respondents had made an excess payment of duty on the short shipped goods. The Tribunal concluded that the respondents were entitled to a refund based on the excess payment. The Commissioner (Appeals) had ruled in favor of the respondents, noting that the importers were not required to pay duty under the Customs Act for goods that were not originally shipped. The Tribunal upheld the decision of the Commissioner (Appeals) as legal and proper, rejecting the Revenue's appeal due to lack of merit.
Therefore, the Tribunal affirmed the entitlement of the respondents to a refund for the excess duty paid on the goods that were short shipped by the foreign supplier. The decision highlighted the importance of proper documentation and compliance with Customs regulations in such cases to ensure fair treatment and refund claims for importers facing similar circumstances.
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2005 (6) TMI 467
Issues Involved:
1. Incorrect totaling of value leading to wrong duty and penalty confirmation.
2. Inclusion of charges for observing and overseeing the work of installation in the assessable value under Central Excise Act, 1944.
3. Assessability of removals and assessments from 1-7-2000 onwards under the concept of Transaction Value.
4. Excise duty on plant and machinery assembled at the customer's site.
Detailed Analysis:
1. Incorrect totaling of value leading to wrong duty and penalty confirmation:
The judgment addresses an error in the totaling of the value, which led to an incorrect duty demand of Rs. 62,82,895/- instead of Rs. 56,36,135/-. This resulted in an erroneous confirmation of Rs. 6,46,770/- as duty and an equal amount as a penalty, totaling Rs. 12,93,540/-. The Tribunal emphasized that this mistake is apparent on the face of the record and must be corrected as it constitutes a wrongful collection of duty and penalty without the authority of law, referencing the precedent set by the Regional Bench in Besterna Chemicals.
2. Inclusion of charges for observing and overseeing the work of installation in the assessable value:
The core issue was whether charges for observing and overseeing the installation work at the customer's site should be included in the assessable value under the Central Excise Act, 1944. The Tribunal referenced several precedents:
- Quality Steel Tubes (P) Ltd v. Collector of Central Excise: Erection and installation of a plant are not excisable goods.
- Thermex Limited: Installation and commissioning charges should not be included in the assessable value.
- Radiant Electronics and Molins of India: Installation and commissioning charges are post-manufacturing expenses and not includible in the assessable value.
- Gordhandas Desai Ltd.: Erection and commissioning charges do not create new excisable goods at the site.
The Tribunal concluded that the charges for observing and overseeing installation activities, which are arranged by the customer's contractors, should not be included in the assessable value.
3. Assessability of removals and assessments from 1-7-2000 onwards under the concept of Transaction Value:
The Tribunal examined the interpretation of "by reason of sale" or "in connection with the sale" under the concept of Transaction Value. Citing Commissioner of Central Excise v. Acer India, the Tribunal noted that excise duty is chargeable only on excisable goods, and the definition of "transaction value" cannot override the charging provisions of Section 3 of the Central Excise Act, 1944. The Tribunal agreed that recoveries for activities such as supervising erection, which do not result in the manufacture of new excisable goods, cannot be subject to excise duty.
4. Excise duty on plant and machinery assembled at the customer's site:
The Tribunal addressed the Commissioner's finding that the VFBD tea dryer machinery, cleared and assembled at the customer's premises, comes into existence there, making installation, erection, and commissioning charges includible in the assessable value. The Tribunal found this conclusion erroneous, noting:
- The VFBD tea dryer, classified under Heading 84.19 of the Tariff, retains its identity whether assembled or disassembled.
- According to HSN Explanatory Notes and Rule 2(a) of Interpretation of CETA, 1985, unassembled goods should be classified as the machine in question.
- The Respondent's own findings indicated that the dryer could be dismantled and reassembled without losing its identity.
The Tribunal concluded that no new identity, character, or use arises from assembling the dryer at the customer's site, so no manufacture or dutiability occurs. The inclusion of erection, installation, and commissioning charges in the assessable value was deemed unsustainable.
Conclusion:
The Tribunal found no merit in upholding the impugned order and set it aside. The appeal was allowed, and the proposed addition to the assessable value was not upheld.
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2005 (6) TMI 466
Issues:
1. Whether the activity carried out by the appellants amounts to manufacture under the Central Excise Act 1944.
2. Whether the appellants are liable to pay duty for the specified periods.
3. Whether the claim of the appellants for payment made under protest should be rejected.
4. Whether the amount already paid by the appellants should be demanded under section 11A.
Analysis:
1. The appellants, a proprietor of a firm named M/s Metro Shoes, were in appeal against an order directing the levy and payment of duty on unbranded footwear received from cobblers at a godown, labeled, packed, and dispatched to showrooms. The appellants argued that their activity of labeling goods did not amount to manufacture under the amended definition. The Commissioner held the activity as manufacture and imposed duty for specific periods. The Tribunal found that the appellants' activity fell under the amended definition involving packing, labeling, and rendering goods marketable, thus upholding the duty levy based on evidence and admissions by the appellants and others involved.
2. The Tribunal considered the amended definition of manufacture under section 2(f) of the Central Excise Act, which includes packing, labeling, and making goods marketable. The Tribunal noted that the appellants' activity of receiving loose goods, checking, marking with MRP, logo, and bar code, and packing in unit containers constituted manufacture under the amended definition. Previous cases cited by the appellants were deemed irrelevant as they did not involve packing from loose merchandise into unit containers. The Tribunal upheld the duty levy for shoes packed from loose receipts, distinguishing them from already packed cases with labels only.
3. The Tribunal addressed the claim of payment made under protest by the appellants, which was to be rejected as the activity was deemed as manufacture under the Central Excise Act. The appellants' argument that labeling goods did not change their marketability or identity was dismissed, and the duty payment under protest was upheld as valid based on the activity being classified as manufacture.
4. Regarding the amount already paid by the appellants, the Tribunal directed the matter back to the Commissioner to grant abatements if proof of shoes being received in unit containers was provided. The Tribunal allowed the appeal on the condition of granting abatements upon satisfying the Commissioner with evidence of receiving goods in unit containers, thereby ensuring a fair assessment of duty liability.
In conclusion, the Tribunal upheld the duty levy on the appellants' activity of packing, labeling, and making goods marketable under the amended definition of manufacture, while providing an opportunity for abatements upon proper documentation of goods received in unit containers.
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2005 (6) TMI 465
The Appellate Tribunal CESTAT, Mumbai allowed the appeal of M/s. Vallabh Pesticides and others, manufacturers on job work basis for M/s. United Phosphorous. Duty demands discharged as per Ujjagar Prints' decision upheld, rejecting Revenue's objection to valuation method. Board's Circular supported job work valuation formula. Duty demands and penalties set aside. Appeals allowed.
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2005 (6) TMI 464
Issues:
Appeal against order confirming confiscation of seized gold bars and imposition of penalties.
Analysis:
The judgment pertains to appeals challenging an order-in-appeal confirming the confiscation of seized gold bars and imposition of penalties on the appellants. The penalties imposed on different individuals were detailed, with amounts ranging from rupees 5,000 to rupees 50,000. The penalties were confirmed due to the seizure of gold bars and pieces of foreign origin from the business premises of a specific concern. The penalties on the appellants were upheld as they were involved in the smuggling of the seized goods. The judgment highlighted the roles of various individuals, including the appellants and other associated parties, in the possession and transfer of the gold bars.
The judgment discussed the circumstances surrounding the seizure of the gold bars, initially made by the Income-tax authorities during a survey. It was noted that one of the appellants produced a bill indicating the purchase of the seized gold bars from another firm, which was confirmed by the proprietor of that firm. The authenticity of the bill and the lawful acquisition of the gold bars by the concerned firm were established based on the evidence presented. The Revenue's contention regarding the bill's relevance to the seized gold bars was dismissed, given the admission by the selling firm's proprietor.
Regarding another appellant penalized for possessing gold bars of foreign origin, the judgment analyzed statements made by individuals involved in the transfer of the gold bars. Despite initial denials by one individual, subsequent statements and evidence supported the lawful possession and transfer of the gold bars for the preparation of ornaments. The genuineness of the evidence presented regarding the import of the gold bars was not in question, further establishing the lawful possession of the gold bars by the appellant for ornament preparation.
In conclusion, the judgment set aside the impugned order confirming the confiscation of seized goods and imposition of penalties on the appellants. The decision was based on the detailed analysis of the circumstances, evidence presented, and the lawful acquisition and possession of the seized gold bars. The appeals of the appellants were allowed, providing them with consequential relief as per the law. The judgment was dictated and pronounced in open court, emphasizing the legal resolution of the issues raised in the appeals.
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2005 (6) TMI 462
Issues Involved:
1. Denial of natural justice.
2. Demand of duty based on various documents and statements.
3. Confiscation of seized goods.
Issue-wise Detailed Analysis:
1. Denial of Natural Justice:
The appellants argued that they were denied natural justice as the demand was based on the statements of witnesses who were not cross-examined. The Tribunal had earlier directed cross-examination of certain witnesses, which was not fully complied with by the Commissioner. The Tribunal emphasized that testimony without cross-examination cannot be blindly accepted and that justice must not only be done but also appear to be done. The Commissioner's failure to summon the witnesses as indicated by the appellants and reliance on unsummoned witnesses' statements violated natural justice principles. Citing precedents like Sounds-N-Images v. CC and Shalimar Rubber Industries v. CCE, the Tribunal held that the Commissioner should not have relied on the oral testimony of witnesses who were not offered for cross-examination.
2. Demand of Duty:
The Commissioner classified the demand into six groups, each based on different sets of documents and statements:
Group I:
The demand was based on the removal of S.S. Ingots/M.S. Ingots for job work without Rule 57F(2) challans. The appellants explained that the removals were accompanied by such challans, and discrepancies in dates were due to logistical delays. The Tribunal found no evidence of excess manufacture or double dispatches and deemed the demand unsustainable.
Group II:
The demand was based on private diaries and a note book maintained by an ex-employee, Shri Rameshbhai Patel, who was not cross-examined. The Tribunal found the diary unreliable as it did not reflect all alleged clandestine clearances and lacked corroborative evidence. The demand was not sustained due to improper and biased appreciation of evidence.
Group III:
The demand was based on transport documents showing double sets for the same consignment. The Tribunal found the allegations speculative, as the investigating officer admitted it was a presumption. Statements from transporters indicated only single dispatches, and the demand was not upheld.
Group IV:
The demand was based on chits/memos issued by transport companies without mentioning the appellants' name or products. The Tribunal found no corroboration linking the documents to the appellants and did not sustain the demand.
Group V:
The demand was based on transport documents showing dispatches of S.S. Flats from M/s. Supan Steel Pvt. Ltd. without excise documents. The Tribunal noted that the appellants did not manufacture these goods, and no Show Cause Notice was issued to M/s. Supan Steel Pvt. Ltd. The demand was not sustained.
Group VI:
The demand was based on transport documents with fictitious consignors. The Tribunal found no evidence linking the goods to the appellants, and the demand was not upheld.
3. Confiscation of Seized Goods:
The seized goods were S.S. Ingots and M.S. Ingots, which the appellants claimed were semi-finished. The Tribunal found no evidence that the goods were ready for dispatch or that they were out of unaccounted raw materials. The confiscation was deemed unsustainable as the goods were not proven to be fully finished or ready for marketing. Additionally, the Tribunal noted that non-accountal of semi-finished goods in RG1 did not warrant confiscation.
Conclusion:
The Tribunal set aside the order, allowing the appeals, as the demands and confiscations were not supported by adequate evidence and violated principles of natural justice.
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2005 (6) TMI 461
Issues: Appeal against Order-in-Appeal, Extension of Warehousing Period, Re-export of Goods, Jurisdiction to Adjudicate Chief Commissioner's Order.
Analysis:
1. Appeal against Order-in-Appeal: The appellant filed an appeal against the Order-in-Appeal passed by the Commissioner (Appeals) concerning the clearance of rough marble blocks that were warehoused. The Commissioner (Appeals) directed the appellants to clear the goods within three months, either by payment of duty for clearance to the domestic tariff area or without payment of duty for export, as per Board's Circular 3/2003-Cus. The penalty imposed was also reduced to Rs. 10,000.
2. Extension of Warehousing Period: The appellant contended that they had requested an extension of the warehousing period, which was granted by the Chief Commissioner. However, the appellant argued that without this extension, they were not entitled to re-export the goods. The appellant's contention was that the request for re-export was not considered by the Commissioner (Appeals). The Tribunal noted that the Commissioner (Appeals) had already allowed the appellant three months to clear the goods, irrespective of the extension issue, and hence dismissed this argument.
3. Re-export of Goods: The main grievance of the appellant was the inability to re-export the goods without the extension of the warehousing period. The Tribunal emphasized that the Commissioner (Appeals) had already addressed and permitted the appellant to clear the goods to the domestic tariff area or for export without payment of duty within three months. As the Commissioner (Appeals) had already considered and allowed the re-export of goods within the specified period, the Tribunal found no fault in the impugned order and dismissed the appeal.
4. Jurisdiction to Adjudicate Chief Commissioner's Order: The Tribunal clarified that it did not have jurisdiction to adjudicate on the order passed by the Chief Commissioner of Customs regarding the extension of the warehousing period. Referring to the provisions of Section 129E of the Customs Act, the Tribunal highlighted that its purview was limited to reviewing the order passed by the Commissioner (Appeals). Since the Commissioner (Appeals) had already addressed the appellant's concerns and provided a directive for clearance of goods within three months, the Tribunal upheld the impugned order and dismissed the appeal.
In conclusion, the Tribunal upheld the Commissioner (Appeals)'s order directing the clearance of goods within three months, either by payment of duty for domestic clearance or duty-free export, and dismissed the appeal due to the lack of jurisdiction to review the Chief Commissioner's order and the Commissioner (Appeals) having already addressed the appellant's grievances satisfactorily.
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2005 (6) TMI 460
Issues:
Appeal against duty demand and penalty for wrongly availing Modvat credit in the manufacture of export goods exempt from duty.
Analysis:
The appellants contested the correctness of the impugned order confirming a demand of Rs. 3,34,723/- and a penalty of Rs. 46,368/-. The duty demand was upheld due to the alleged wrongful availing of Modvat credit for inputs used in manufacturing duty-exempt goods. However, it was revealed that the appellants were filing rebate claims for duty paid on these inputs and debiting the amount in their RG-23-A, Part-II account. The appellants maintained this account for their own purposes, initially recording the rebate amount in their Cenvat account but later reversing it after claiming the rebate.
The counsel presented orders sanctioning rebate claims to the appellants for the disputed period, indicating that the rebate had already been granted. Therefore, the appellants were only required to reverse the entry in their RG-23A Part-II account. The tribunal ruled that the amount could not be recovered by the Revenue as duty since the credit availed was not wrongful. The appellants were instructed to provide proof of the reversal in their Cenvat account to the competent authority. Consequently, the impugned order confirming the duty demand and penalty was set aside, and the appeals of the appellants were disposed of accordingly. The judgment was dictated and pronounced in open court on 24-6-2005.
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2005 (6) TMI 459
Issues:
1. Rejection of plea for special discounts under Advance Booking Scheme.
2. Eligibility of discounts under the Advance Booking Scheme.
3. Contention of unjust enrichment.
4. Applicability of Board's Circulars and judicial precedents.
5. Levying of penalty.
Issue 1: Rejection of plea for special discounts under Advance Booking Scheme
The appeal arose from the rejection of the assessees' plea for granting special discounts to a separate class of buyers under the Advance Booking Scheme. The Commissioner confirmed the discounts given to a special class of buyers for a specific period, involving a differential duty. The penalty imposed was also addressed in the order.
Issue 2: Eligibility of discounts under the Advance Booking Scheme
The appellants, manufacturers of Hermetically Sealed Compressors, implemented an Advance Booking Scheme during lean seasons. The scheme offered discounts to dealers who booked compressors in advance, with the discount communicated through Office Orders and to the Central Excise department. The appellants contended that they were entitled to deduct the discounts even for dealers opting for the scheme, supported by Circulars and judicial rulings. They maintained separate accounts and paid duty on notional interest earned on advances, asserting their eligibility for the deductions.
Issue 3: Contention of unjust enrichment
The Revenue contested the matter on the grounds of unjust enrichment, challenging only this aspect before the Tribunal. However, the Tribunal rejected the plea of unjust enrichment, emphasizing the settled issue in favor of the appellants by a previous order that was not challenged by the Revenue.
Issue 4: Applicability of Board's Circulars and judicial precedents
The Tribunal accepted the contentions raised by the appellants, highlighting that they were paying duty on the value arrived at even under the Advance Booking Scheme. The Commissioner's order upholding the contention for deduction of discounts was deemed final, making the appellants eligible for the claimed discounts. The Tribunal relied on Board's Circulars and judicial precedents to support the deduction of discounts, considering them as special discounts granted to specific contracting parties.
Issue 5: Levying of penalty
The learned Counsel submitted that penalty was not leviable in the circumstances. The Tribunal found in favor of the appellants, setting aside the Commissioner's order as not legal and proper. The appeal was allowed with consequential relief, if any, indicating that the appellants were entitled to the discounts under the Advance Booking Scheme.
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2005 (6) TMI 458
Issues:
1. Contravention of Rule 57F(i)(ii) - Removal of inputs at lower price without processing.
2. Contravention of Rule 57G(3) - Failure to maintain proper accounts.
3. Suppression of facts leading to contravention of provisions and imposition of penalties.
4. Applicability of Rule 57-I post-repeal and substitution.
5. Determination of duty liability on rejected goods and scrap.
6. Disputed refund claim and lack of records for accounting.
7. Application of Modvat rules on returned goods and duty refunds.
8. Assessment of duty demands on resale of returned goods and scrap.
9. Consideration of manufacturing processes on returned goods for duty liability.
10. Reassessment of duty demands and refund claims.
Analysis:
1. The appellants were charged with contravention of Rule 57F(i)(ii) for removing inputs at a lower price without processing, leading to duty evasion. The Commissioner confirmed the charges, upheld demands, and imposed penalties, which led to the appeal.
2. The issue of contravention of Rule 57G(3) arose due to the failure to maintain proper accounts, which was also confirmed by the Commissioner, leading to further penalties and demands.
3. Suppression of facts regarding removal of inputs at lower prices and misclassification of scrap resulted in contravention of provisions, necessitating recovery of duty and imposition of penalties and confiscation.
4. The question of the applicability of Rule 57-I post-repeal and substitution was raised by the appellants, citing a legal decision. However, the Commissioner held that the repeal did not affect the sustainability of the notice due to a savings clause in the Budget 2001.
5. The determination of duty liability on rejected goods and scrap was a crucial aspect of the case, with the Commissioner finding discrepancies in the valuation and clearance of such goods, leading to demands and adjustments against payments made.
6. A disputed refund claim was raised by the appellants, but the lack of records for accounting the utilization of rejected goods hindered their case, leading to the rejection of the refund claim.
7. The application of Modvat rules on returned goods and duty refunds was discussed, highlighting the necessity of following prescribed procedures and declarations for availing credits and refunds.
8. Assessment of duty demands on resale of returned goods and scrap involved considerations of manufacturing processes, valuation, and compliance with excise rules, leading to the confirmation of demands in line with show cause notices.
9. The consideration of manufacturing processes on returned goods for duty liability was a key point, with the Commissioner analyzing the processes undertaken by the assessee and the generation of scrap, leading to the determination of duty liability.
10. The reassessment of duty demands and refund claims was crucial for resolving the discrepancies in duty payments, refund claims, and compliance with excise rules, leading to the remittance of the appeal for further determination and setting aside of penalties where not warranted.
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2005 (6) TMI 457
Issues: Valuation of export goods, constitution of Expert Panel, confiscation of goods, plea for re-valuation, remand proceedings
In this case, the appellants sought to export Rough Diamonds to Hong Kong by declaring a value that was disputed by the customs department. An Expert Panel was constituted to value the goods, which resulted in a value higher than the declared amount. The Commissioner confiscated the goods but allowed redemption on payment of a fine. The appellants requested re-valuation by another Expert Panel, which was not addressed by the Commissioner. The Tribunal noted the appellants' contestation of the Panel's constitution and ordered re-valuation by independent experts chosen by both parties. The matter was remanded to the Adjudicating Authority for a final decision.
The primary issue in this case was the valuation of export goods, specifically Rough Diamonds, declared for export to Hong Kong. The dispute arose when the value declared by the appellants did not match the value determined by the Expert Panel appointed by the customs department. The Commissioner confiscated the goods but permitted redemption upon payment of a fine. The appellants requested a re-valuation by another Expert Panel, which was not addressed by the Commissioner. The Tribunal acknowledged the appellants' objection to the constitution of the Panel and ordered re-valuation by independent experts chosen by both parties to ensure a fair assessment.
Another crucial issue was the constitution of the Expert Panel for valuing the export goods. The appellants had contested the Panel's constitution from the beginning, highlighting concerns about the fairness and independence of the valuation process. The Tribunal agreed with the appellants and directed that the valuation should be conducted by independent experts, with one member chosen by the appellants and the other by the customs department. This decision aimed to ensure a transparent and unbiased valuation process, addressing the appellants' concerns regarding the initial valuation conducted by the Panel appointed by the department.
The case also involved the confiscation of the goods by the Commissioner under Section 113(i) of the Customs Act due to discrepancies in the declared value of the export goods. While the Commissioner allowed redemption of the goods upon payment of a fine, the appellants raised a plea for re-valuation by another Expert Panel. This plea was not addressed by the Commissioner, leading the Tribunal to remand the matter to the Adjudicating Authority for a fresh decision. The Tribunal emphasized the importance of a fair and transparent valuation process, especially in cases where the parties contest the initial valuation conducted by the authorities.
Overall, the Tribunal's decision focused on ensuring a just and unbiased valuation process for the export goods in question. By ordering re-valuation by independent experts chosen by both parties, the Tribunal aimed to address the appellants' concerns regarding the initial valuation and uphold the principles of fairness and transparency in customs proceedings. The remand of the matter to the Adjudicating Authority for a final decision underscored the Tribunal's commitment to upholding justice and procedural integrity in customs disputes.
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2005 (6) TMI 456
Issues:
Denial of SSI exemption under Notification No. 8/2000 and 8/2001 based on the use of the brand name 'Hot Breads' belonging to another entity, M/s. Oriental Cuisines (P) Ltd.
Analysis:
The appellants argued that they used the brand name 'Hot Breads' in accordance with an Agreement dated 26-7-1999, emphasizing that M/s. Oriental Cuisines (P) Ltd. did not produce all types of Cakes and Pastries, and therefore, the use of 'Hot Breads' on such items by the appellants should not disqualify them from the SSI exemption. They contended that as bread is exempt from Excise duty and 'Hot Breads' was not used by M/s. Oriental Cuisines (P) Ltd. for Cakes and Pastries, the denial of the exemption was unjustified. The Tribunal noted that the appellants used the brand name 'Hot Breads' on a different product than that of M/s. Oriental Cuisines (P) Ltd., and thus, did not infringe on another entity's brand name for the same item. Citing various judgments and Board Circulars, the Tribunal supported the appellants' position, emphasizing that the Commissioner's new grounds for denial were not raised in the Show Cause Notice, rendering the denial unsustainable.
The Tribunal considered the appellants' argument that their use of 'Hot Breads' on Cakes and Pastries was independent of the Agreement with M/s. Oriental Cuisines (P) Ltd., and therefore, permissible. After careful examination, the Tribunal agreed with the appellants, concluding that they were entitled to use the brand name 'Hot Breads' on different products they manufactured, which were distinct from those produced by M/s. Oriental Cuisines (P) Ltd. The Tribunal found merit in the appellants' position, supported by legal precedents and Circulars, and overturned the Commissioner's decision to deny the exemption.
The Commissioner introduced a new ground alleging that the appellants used a foreign brand associated with a foreign company, which was not raised in the Show Cause Notice. The Tribunal deemed this new ground as invalid, echoing the appellants' argument that the denial based on this ground was unfounded. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellants and allowing the appeal. The Tribunal emphasized that the Commissioner's introduction of new grounds not mentioned in the Show Cause Notice was impermissible, leading to the reversal of the decision to deny the SSI exemption to the appellants.
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2005 (6) TMI 455
Issues:
Appeal against refund claims for reclassification of products and excess duty paid. Appeal against Orders-in-Appeal by Commissioner (Appeals) and Tribunal's decision. Maintaining the correctness of facts and reconsideration of the issue.
Analysis:
The case involves two appeals filed by the Revenue against Orders-in-Appeal passed by the Commissioner of Central Excise (Appeals), Ahmedabad. The appeals were related to refund claims filed by M/s. Promact Plastics Ltd. for reclassification of HDPE tapes and sacks made from such tapes. The Assistant Commissioner calculated the Modvat credit available to the appellants and the duty paid on HDPE tapes. It was found that an excess amount was refundable to M/s. Promact Plastics Pvt. Ltd. The department appealed these orders, and the Commissioner (Appeals) directed a recalculation of the refund. The Tribunal upheld the Commissioner's decision, leading to the current appeal by the Revenue against the Orders-in-Appeal.
The present appeal challenges the Orders-in-Appeal by the Commissioner (Appeals) dated 14-7-99. It was noted that the Commissioner had already decided appeals against similar Orders-in-Original in a previous order dated 12-6-97. The Tribunal had also finalized appeals against these decisions. The Revenue's appeal was deemed not maintainable as the issue had already been decided by the Commissioner and the Tribunal. The circumstances of the second set of appeals filed by the department, despite prior decisions, were questioned.
The Tribunal set aside the impugned orders of the Commissioner (Appeals) and remanded the matter back to reconsider the issue in light of the Tribunal's decision. The directive was to find out the correct facts and reassess the issue based on the previous Tribunal's decision. Both appeals were disposed of accordingly on 3-6-2005.
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