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TMI Blog2023 (11) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... expense therefore, it was deducted directly from Revenue from Operations as per guidelines given under Companies Act 2013. It may be noted that no Chartered Account can change the format of Balance Sheet or Profit and Loss Account as given under Schedule III of Companies Act 2013, and since the format specifically mandates that excise duty paid should be specifically deducted from Revenue from operations, then every Chartered Accountants is bound to follow the same format - the company had to pay excise duty irrespective of sale/production under compounding scheme, therefore, it has correctly debited entire amount to profit and loss account. The refund amount constitutes the entitlement of the company on account of excess excised duty paid and mere change in nomenclature i.e. called pre-deposit or deposited under protest etc. does not change the essence of transaction. Under no circumstance compoundable excise duty can be shown anywhere else but as a reduction from Revenue from Operation. recovery of excise duty is not possible. It is found that there is no set mechanism or opportunity available to the manufacturers working under compounded levy scheme in terms of Section 3A and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the parameters as provided in the rules and the notification carved out for determination of Annual Capacity of production of the factory by the Jurisdictional Assistant Commissioner, where such goods were produced, in accordance to the rates specified in the Chewing Tobacco Capacity Determination Rules. 4. The Annual Capacity of production was fixed on the basis of factors like the product, the speed of the machines, the retail sale prices, and whether or not production activity was in process or closed. It was mandatory levy for the Appellant to discharge the levy of Excise Duty on compounding basis and the Appellant could not have taken as a component of cost for fixing a price as mentioned in the impugned decision at supply place. There was no cause for the Determination of any actual production and clearance from the factory. 5. There was a separate scheme under erstwhile Rule 10 of the Chewing Tobacco Rules, which provided for the Abetment of duty for the complete closure of the factory, but that was claimed only after the payment of Duty by 5th day of the month in advance under Rule 9 of the Chewing Tobacco Rules, ibid, no law relating to post removal payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Notional Incidence and the recovery was thereof not possible to be connected with the quantum of goods manufactured and sold under an invoice, which is corroborated by the fact that when clearance of the final product is made the cenvatable invoices is marked with indelible stamp Discharge under compounding levy . He further submits that the learned Adjudicating Authority ought to have appreciated the fact that on ocular examination of the cenvatable invoice, it was not coming out that in spite of the advance discharge of the levy of the duty, there was no ground which could in any manner and probability show the recovery of tax from the customers or passing of the incidence to the buyer. The authorities below evidently based their findings on wild inferences and is rather intriguing. Because the Appellant had argued on the ground that there was a distinction in discharge of levy under erstwhile section 3 of the Act and section 3A of the Act. Under section 3 of the Act, the charging provision carves out a levy of CENVAT either on ad-valorem basis or in terms of specific duty, measured with reference to the quantity of goods manufactured and cleared, whereas under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis was mandatory, there was no option left for the Assessee but to adhere to, and abide, and follow the annual capacity of production, which has been determined by the Learned Assistant Commissioner and he also failed to appreciate the fact that the duty with regard to chewing Tobacco not being optional, as per the Rules, it carved out for advance payment of the duty running five days of the Calendar Month with regard to the production activity. 16. In support of his submissions he has relied upon the following decisions. (i) Kothi Steel Ltd. Vs. Commissioner of Central Excise, Vadodara, reported in 2004 (167) ELT 545 (Tri.- Bom.). (ii) Commissioner of Central Excise, Pune-I Vs. Sandvik Asia Ltd., reported in 2014 (303) ELT 138 (Tri.- Bom.). (iii) CCE, Mumbai-V Vs. Shree Ram Textile Processing Mills (I) Pvt. Ltd., reported in 2006 (193) ELT 485 (Tri.- Bom.), (iv) Mohinder Steels Ltd. Vs. Commissioner of Central Excise, Chandigarh, reported in 2022 (145) ELT 290 (Tri.- LB). 17. Learned D.R. justified the impugned order and reiterated the discussions and findings of the learned Commissioner (Appeals). 18. Heard both sides and perused the appeal recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the entitlement of the company on account of excess excised duty paid and mere change in nomenclature i.e. called pre-deposit or deposited under protest etc. does not change the essence of transaction. Under no circumstance compoundable excise duty can be shown anywhere else but as a reduction from Revenue from Operation. recovery of excise duty is not possible. 23. It is an established fact on record that the amount of refund i.e., Rs. 6,95,52,000/- was claimed by the Appellants only in the month of March 2022 after passing of the final order No. A/70062/2022-EX[DB] dated 02.02.2022 by the Tribunal, settling the issue of classification and consequent fixation of annual capacity of production and Appeal against which was already dismissed by Hon ble Supreme Court, hence accepted. Appellant argued that prior to the admissibility of the refund claim the Appellant could not have shown the amount of refund amounting to Rs. 6,95,52,000/- as current asset and the amount receivable on account of Excise Duty. 24. It is only after the acceptance of the refund claimed by the Appellant for the subjected amount, that the said amount could have been shown in the balance sheet as the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and removed under the scheme of levy and more appropriately under Section 3 of the Act, the said principle cannot by any logically and economical be justifiable as legally tenable principle be extended to the manufactures working under compounded levy scheme under Section 3A. 28. Appellant relies upon the judgment in the matter of Commissioner of Central Excise, Ahmedabad-I Vs. Devi Synthetics, reported in 2010 (261) ELT 416 (Tri.- Ahmd), wherein it has been held as under: M/s. Devi Synthetics, engaged in the manufacture of textiles fabrics, was discharging duty liability under the Compounded Levy in terms of annual capacity fixed under Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The refund claim filed by M/s. Devi Synthetics (respondent) has been allowed in the impugned order and Revenue is in appeal against the same. 2. The Commissioner (Appeals) as well as the original adjudicating authority allowed the refund claim on the ground that there was no unjust enrichment in view of the fact that the duty was not paid consignment-wise but on the basis of annual capacity fixed and also based on the Chartered Accountant s certi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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