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2005 (2) TMI 412
... ... ... ... ..... imposed on them. 5. The ground taken up by the Commissioner of Customs for imposing penalties on the appellants is that, they abetted the importers to import goods under the invalid DEPB licences by invoking the provisions of Section 112(b) of the Act. But when no penalty has been imposed on the importers and only duty has been demanded from them, the appellants could not be saddled with the penalty. Moreover, at the time of import of the goods by the importers, the licences were valid as the same were cancelled later on and for that reason also, the appellants could not be penalized in view of the ratio of the law laid down by the Bombay High Court in the case of Taparia Overseas (P) Ltd. v. UOI, 2003 (161) E.L.T. 47 (Bom.). 6. In the light of the discussion made above, the impugned orders against the appellants are set aside and the appeals of the appellants are allowed with consequential relief, if any, permissible under the law. (Dictated and pronounced in the open Court)
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2005 (2) TMI 411
Interest on interest ... ... ... ... ..... urt of India in the case of Commissioner of Income Tax v. Narendra Doshi - 254 ITR 606 (S.C.). The facts of the above case are relevant for this appeal also. In the above mentioned case, the Commissioner of Income Tax (Appeals) allowed interest on interest when the law provides grant of simple interest only. The Revenue went in appeal to the Income Tax Appellate Tribunal, which upheld the order of the Commissioner of Income Tax (Appeals). The Gujarat High Court, relying on another decision of the same Court, upheld the order of the Tribunal. The Hon ble Apex Court also upheld the order of the Gujarat High Court. The decision of the Apex Court to uphold payment of interest on interest is binding on this Tribunal. The department is liable to pay interest from the date of payment of the interest till the date of refund of the same as applicable to refund under the Customs Act, 1962. Therefore, we allow the appeal with consequential relief. (Pronounced in open Court on 14-2-2005)
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2005 (2) TMI 410
Issues involved: Challenge to correctness of OIA No. 65/2002-Cus. regarding refund claim rejection based on tariff value reduction and unjust enrichment applicability in provisional assessment.
Issue 1 - Refund claim rejection based on tariff value reduction: The appellants challenged the rejection of their refund claim due to the reduction of Tariff value by the Government of India. They argued that the claim should be considered regardless of the Tariff change, and unjust enrichment should not apply to provisional assessments.
Issue 2 - Applicability of unjust enrichment in provisional assessment: The Tribunal found merit in the appellants' submission, citing the Madras High Court case and various Tribunal cases which held that unjust enrichment does not apply to refunds arising from finalization of provisional assessments. The plea regarding failure to indicate duty amount in the invoice was also considered valid based on supporting judgments.
Issue 3 - Incidence of duty not passed on to customers: The plea that duty incidence was not passed on to customers due to goods being sold at a price lower than landed cost, and loss being similar to duty paid, was supported by relevant judgments. The Tribunal concluded that both orders were unjust, and the refund claim should be granted without applying unjust enrichment provisions.
The impugned order was set aside, and the matter was remanded to the original authority to reconsider the refund claim without unjust enrichment provisions. The Tribunal emphasized that refunds should be granted when assessments are finalized, and the provisions of unjust enrichment do not apply in such cases. The original authority was directed to finalize the refund within four months from the receipt of the order.
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2005 (2) TMI 409
Valuation (Central Excise) - Interest on demand ... ... ... ... ..... nd is dated 5-2-2002 involving period from January 2001 to February 2001 and the third is dated 26-4-2002, for the period April to July 2001. In the first show cause notice since the extended period of limitation had been invoked, the interest under Section 11AB on the duty amount confirmed against the appellants, is payable by them. However, on the duty amount involved under second show cause notice no interest is payable by the appellants under Section 11AB as the duty demand was raised within the normal period of limitation. Under the third show cause notice detailed above, keeping in view the amendment to the provisions of Section 11AB with effect from 11-5-2001, no interest is payable by the appellants from April 2001 to 10th May 2001. But for the rest of the period, interest in terms of Section 11AB is payable by them. In the light of above discussion, the final order dated 12-8-2004 accordingly stands modified. (Operative part of the order pronounced in the open Court)
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2005 (2) TMI 408
Appeal to Appellate Tribunal - Appealable order ... ... ... ... ..... n Orissa Polyfibres case referred to above that the Commissioner s decision rejecting request for transfer of credit, as communicated in the form of letter by Deputy Commissioner - such letter is not appellable order - appeal dismissed as non-maintainable. This Bench in the same order has observed that while parting with this case, we would, however observe, in such cases where valuable rights of the appellant are to be considered and should pass an order after issuing a notice and granting a hearing thereof so that an appropriate appellate remedy would be available to the Appellants. We would expect the Commissioner to adopt this course in this case. In view of above, I direct the Commissioner that he should pass a speaking order after observing the principles of the natural justice so that an appropriate appellate remedy is available to the Appellant. In view of my above observation, I dispose of the appeal in terms of above order. Dictated and Pronounced in the open court.
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2005 (2) TMI 406
Cenvat/Modvat - Duty paying documents ... ... ... ... ..... ave not furnished any such certificate issued by the customs officer. The photocopy of the Bill of Entry containing any endorsement (also photocopy) cannot be treated as certificate in lieu of proper document. 3. The credit was denied by treating certified photocopy as to equivalent to certificate . I am not able to appreciate the distinction being made by the Commissioner. The photocopy in question has been certified as True copy by the Superintendent of Kandla Port. The import took place at that Port and the document contains all the particulars relating to import, payment of duty etc. Thus, the authenticated photocopy contains all particulars, which are required to be certified. I am, therefore, of the view that the Commissioner is in error in not allowing the credit. Accordingly, the stay application is allowed and requirement for pre-deposit is waived. Further, the appeal itself is allowed in view of the factual position noted. (Pronounced and dictated in the open Court)
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2005 (2) TMI 403
Valuation (Customs) - Contemporaneous import ... ... ... ... ..... n value is required to be accepted. This view has been applied by the Chennai Bench in the case of Anish Kumar Spinning Mills v. CC, Tuticorin - 2004 (172) E.L.T. 394 (Tri.) - F.O. No. 599/2004, dated 17-5-2004 in the case of import of second hand machinery. The Tribunal also upheld the transaction value of second hand machinery in terms of the invoice price in the case of Medak Rubber Ltd. v. CC, Chennai - 2000 (117) E.L.T. 700 (Tribunal). By applying the ratio of this judgment, we hold that the rejection of transaction value by the authorities is not correct and not and in terms of the ratio of the Apex Court judgment and the Tribunal rulings noted supra. In the absence of any evidence of contemporaneous import as noted in the Apex Court judgment, the impugned order is not correct, legal and proper and hence the same is set aside by allowing the appeal with consequential relief, if any. (Operative portion of this order was pronounced in open Court on conclusion of hearing).
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2005 (2) TMI 402
EXIM - EPCG Scheme ... ... ... ... ..... ort obligation prescribed for any particular year for 3 consecutive years. In the present case, the appellants have achieved 100 of export obligation in the second year, 78.33 in the third year, 15.56 in the fourth year and 27.27 in the fifth year. In view of this, Para 5 will not be applicable to them and it is only Para 4 which should be used to compute the duty liability giving allowance for the partial obligation completed. According to the appellants, they are liable to pay only Rs. 15,43,743.22 whereas the department has realised an amount of Rs. 20,54,821/-. The appellants have requested for relief by way of refund of the excess amount recovered. The same issue has been gone in depth by us in the case cited by the learned Advocate. That case is squarely applicable to the present case also. Following the ratio of the above case, we allow the appeal with consequential relief, if any. (Operative portion of this order was pronounced in open court on conclusion of hearing).
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2005 (2) TMI 399
Cenvat/Modvat - Import of capital goods with spares - EPCG Scheme - Adjudication - EXIM Policy - fulfilment of export obligation condition - exemption of duty under Notification No. 110/95 - HELD THAT:- We find that there is no provisions under the Central Excise Act or the Rules which prescribes a period within which credit of duty paid on the capital goods should be entered as taken in the register maintained. The intention of the Commissioner therefore for denying this credit cannot be upheld. In fact, it is found that Circular No. 199/33/96-CX., dated 23-4-1996 clarifies that time limit of six months prescribed in 2nd proviso to Rule 57G will not apply to availment of credit on capital goods under Rule 57T and these instructions have been issued by the Board in consultation with the Ministry of Law.
The Tribunal in the case of Surya Prabha Mills Limited v. Commissioner of Central Excise, [2002 (4) TMI 718 - CEGAT, CHENNAI] has held that no restriction in time limit fixed for taking credit in respect of capital goods could be found by them. The decision in the case of Surya Prabha Mills Ltd. v. CCE, Coimbatore (supra) was therefore required to be followed by the Commissioner. The Commissioner's findings in this regard are therefore to be set aside.
In the absence of an allegation specifically to be made in the Show Cause Notice that the demands of differential duty were to be made by reasons fraud, collusion, suppression of facts etc. with an intent to evade payment of duty, it is not now open for the Revenue to allege and deny credit under Rule 7(1)(b). In any case, the provisions as applicable on the date of receipt of capital goods when no such bar shown to exist in the relevant rules. The findings of the Commissioner do not specify the rules under which the availment of credit was prohibited under the Central Excise Rules, 1944. Under these circumstances, the order of the Commissioner which suffers from non application of mind also is required to be set aside and it is to be held that the provisions of Rule 7(1)(b) are not applicable in the facts and circumstances of this case.
The installation and use of the capital goods was never in dispute. In fact, the Assistant Commissioner has certified the installation of the capital goods and that cannot be debated and disputed at this belated stage without any material evidence to challenge that certification. The findings of the Commissioner in this regard is therefore required to be set aside.
The appellants have pleaded that the impugned order traverse beyond the Show Cause Notice inasmuch as the Commissioner has held that the appellants have not mentioned anywhere in the reply during the personal hearing that the imported plant installed are in use and that the appellants have not claimed the benefit of the depreciation. A perusal of the Show Cause Notice does not reveal any such allegation as regards depreciation. The Chartered Accountant's certificate has been produced and we find therefore no reasons to uphold the order on the ground of depreciation having been claimed. The plea of the order traverse beyond the Show Cause Notice is upheld and the order is also required to be set aside on this account.
Thus, the order is set aside and the appeal allowed.
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2005 (2) TMI 398
Valuation (Customs) ... ... ... ... ..... M/s. Atam Manoher Ship Breakers (P) Ltd. (supra). In this case the Tribunal after noticing that the provisions of the agreement whereby there was a clause for price reduction on account of material different and it was found that what has been imported is a different material from what had been agreed to re-import. In such a situation, the Tribunal accepted the reduction in price. The fact of the present case is different. In the present case there is no provision in the Memorandum of agreement for reduction of price on any account. We find that Tribunal in the case of Guru Ashish Ship Breakers (supra) held that in absence of any provision in the memorandum of agreement regarding variation in price, the reduction in price after import is not sustainable. In the present case as discussed above, the price was revised after import and in the absence of any provisions regarding price variation in the memorandum of agreement, we find no merit in the appeal. The same is dismissed.
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2005 (2) TMI 396
Penalty - Production capacity based duty liability ... ... ... ... ..... the Tribunal held that when the determination of annual capacity is under dispute and the final duty has been paid only after the dispute is settled, no penalty is imposable. 5. We have considered the rival submissions and gone through the case law. We find that in spite of a provisional determination order, the appellants chose to pay duty on the basis of the actual production. Under the said Rules, once a provisional order determining the duty liability is made, the assessee is required to pay the amount determined in such provisional determination order. We find, under these circumstances, that penalty is imposable. However, having regard to the facts and circumstances of this case, we consider that a maximum penalty equivalent to the amount of duty not paid is not called for. We, therefore, reduce the penalty to Rs. 30,000/- under Rule 96ZB(3). Subject to this modification, the order of the Commissioner is upheld. 6. The appeal is thus partly allowed. (Dictated in court)
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2005 (2) TMI 394
Software (DCS Software) - Exemption - Computer software ... ... ... ... ..... declaration by M/s. ABB has no force. 9. Summing up, we hold that as far as the Central Excise Notification No. 48/94-C.E., dated 1-4-1994 is concerned, all Softwares are eligible for exemption and one cannot import the definition of Computer Software in the Customs Notification to deny the benefit of exemption to DCS software. The charge of misdeclaration also cannot be sustained. As regards non-inclusion of Systems Engineering charges, there is force in the appellants contention that such activity has been undertaken at site in connection with the layout of the DCS and is in no way connected with the manufacture of the DCS. In view of this, we allow the party s appeal with consequential relief. 10. The Revenue s appeal is with regard to the quantum of penalty imposed under Section 11AC and interest demanded under Section 11AB. Since we have set aside the OIO, Revenue s appeal is rendered infructuous. The Revenue s appeal is dismissed. (Pronounced in open Court on 16-2-2005)
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2005 (2) TMI 392
Motor Vehicle ... ... ... ... ..... an instruction when the period involved is subsequent to the decision of the Punjab and Haryana High Court. 4. We have considered the submissions of both the sides. The issue regarding classification of the body built on chassis supplied by the customer has been settled by the Supreme Court in the case of Ram Body Builders. The body built or fabricated on chassis by independent body builders is classifiable under Heading 87.07 of the Central Excise Tariff. In view of this there is no force in the submissions of the learned Advocate that the bodies fabricated by the Appellants are chargeable to duty under Heading 87.02 of the Tariff. There is no force in the submissions of the learned Advocate that the instructions issued by the Board in 1986 will be applicable for the classification of the impugned product when there is a decision initially by the Punjab and Haryana High Court. We, therefore, find no merit in these appeals and reject the same. (Pronounced in the open Court)
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2005 (2) TMI 391
Project import ... ... ... ... ..... ty of the appellant s Power Plant is only one MW. According to the Government s (Andhra Pradesh) letter of permission, its maximum capacity can go up to 4.5 MW. Under these circumstances, Serial No. 399(iii) is ruled out. While going through the entries in Serial No. 399, it is very clear that Serial No. (iv) is for Power Projects which are much more extensive and more grand than a Power Plant. In view of the Supreme Court s interpretation of Customs Notification No. 71/85, dated 17-3-1985, wherein the entries are similar, it is very clear that the Power Plant of the appellant cannot be considered as a Power Project. It is also very clear that the power is supplied to its sister unit and the same cannot be sold at all. So, even if this tiny Plant can be considered as Project, the concession cannot be given in view of the captive consumption. Under these circumstances, the appellants do not have a strong case and we dismiss the appeal. (Pronounced in open Court on 23-2-2005).
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2005 (2) TMI 390
Cenvat/Modvat - Capital goods ... ... ... ... ..... t credit on the rope way used for transporting the crushed limestone from the factory to the mines. This judgment of the Tribunal was challenged by the Revenue before the Apex Court but their Civil Appeal was dismissed by the Court as it was not pressed for the reason that the decision in the case of CCE, Chennai v. Pepsico India Holdings Ltd. 2001 (130) E.L.T. 193 on this very issue, had already been accepted by the Board. Under these circumstances, the decision of the Tribunal in Raj Cement (supra) does not hold the field. The case of the appellants stand squarely covered by the law laid down in the above referred case J.K. Udaipur Udyog Ltd., and as such, they are entitled to the Modvat credit of the amount in dispute on the capital goods in question. Therefore, the order of the Commissioner (Appeals) cannot be sustained and the same are set aside. The appeals of appellants are allowed with consequential relief as per law. (Order dictated and pronounced in the open Court).
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2005 (2) TMI 387
Appeal - Limitation - Condonation of delay ... ... ... ... ..... fidavit of any person of that company denying categorically the non-receipt of the copy of the order from the office of the Commissioner (Appeals) has been brought on record. Even during the course of arguments the learned Counsel showed his inability to produce such an affidavit. Copy of the impugned order, according to the Revenue, was sent by registered post, as contended by the SDR before us and the same was never received back. Therefore, it can be easily inferred that the copy of the order was received by the appellants, in view of the ratio of law laid down by the apex court in the case of Bharat Nand Lal Katyani v. CCE 1997 (94) E.L.T. A251 . No sufficient ground has been made out for condonation of inordinate delay of over three years in filing the appeal by the appellants. Therefore, the COD application of the appellants is dismissed. Consequently, the appeal of the appellants is also dismissed as time-barred. (Operative part of the order pronounced in open Court).
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2005 (2) TMI 386
Issues involved: Appeal against the order of the Commissioner of Central Excise Vapi regarding entitlement to Modvat Credit and imposition of penalty.
Entitlement to Modvat Credit: The appellant paid duty on galvanized CRCA Strips, taking Modvat credit of duty paid on the strips. Initially, the Department accepted this payment, considering galvanization as manufacturing. Subsequently, it was determined that galvanization did not amount to manufacture, leading to a denial of duty payment on galvanized strips. The Commissioner held that the appellant was not entitled to Modvat Credit on the duty paid for the inputs used in manufacturing the non-excisable final product. A penalty of Rs. 5,000 was also imposed.
Legal Precedents: The Tribunal referred to previous cases where it was established that an assessee is entitled to take Modvat/Cenvat Credit of duty paid on inputs used in manufacturing the final dutiable product, even if the final product was later deemed non-dutiable. Reversal of credit cannot be ordered in such cases, especially when the Department had accepted duty on the allegedly non-dutiable goods. The Tribunal cited cases like PSL Holdings Ltd. v. Commissioner of Central Excise, Rajkot and Vinayak Industries v. CCE Rajkot to support this view.
Judgment: After hearing both sides, the Tribunal allowed the appeal, setting aside the Commissioner's order. The Tribunal emphasized that denial of Modvat Credit for duty paid on inputs used in manufacturing non-dutiable goods, for which duty was paid, was not justified. The decision was in line with established legal principles and precedents, leading to the reversal of the Commissioner's order and the penalty imposed.
(Operative part pronounced in Court)
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2005 (2) TMI 384
Dutiability - Waste and scrap ... ... ... ... ..... t, the inputs must be used in relation to manufacture of final products, the liability to duty would arise only when the scrap is generated as a result of manufacture and since in the present case the scrap did not arise in the course of manufacture of their final products, viz. rubber tyres, the waste and scrap of polyethylene film is not liable to duty. This distinction does not advance the case of the respondents who have clearly stated in their reply to show cause notice that the inputs are used in relation to the manufacture of final products. Therefore, the Tribunal s decision cited supra squarely covers the issue in favour of the Revenue. However, the duty demand is required to be recomputed by treating price as cum duty price, in the light of the decision of the larger bench of the Tribunal in the case of Srichakra Tyres Ltd. 1999 (108) E.L.T. 361 (Tri.) . 5. Following the ratio of the above, we set aside the impugned order and allow the appeals. (Dictated in Court).
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2005 (2) TMI 382
Demand duty - Duty paid on nearest prevailing value - without reviewing the refund order u/s 35EA - Erroneous refund - HELD THAT:- We follow the precedent and apply the ratio of the Supreme Court's decision in Jain Shudh Vanaspati [1996 (8) TMI 108 - SUPREME COURT] to the facts of the instant case and, accordingly, reject the appellants' contention that a SCN demanding erroneously refunded duty could not be issued u/s 11A without revision/review of the refund order. No other issue has arisen from the submissions made in this case.
In the result, we sustain the order of the Commissioner (Appeals) and reject the present appeal.
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2005 (2) TMI 381
Cenvat/Modvat - Inputs ... ... ... ... ..... 3. The issue is no longer res integra and endorsing the view taken in the case of Aar Aay Products Pvt. Ltd. v. CCE, 2003 (157) E.L.T. 40 (Tri.), we find no reasons to deny the transfer of credit, as we find that the Board s Circular No. 1/93 dated 5-1-1993 relied upon by the Revenue would cover the period prior to introduction of Rule 57F(20) which was introduced with effect from 1-3-1997. 4. Finding no reasons to deny the credit on reading of the provisions of this rule and the Tribunal s decision, this appeal is allowed. (Pronounced in Court).
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