CESTAT RULING (CENTRAL EXCISE)
2014-TIOL-686-CESTAT -MUM
Sachin L Palod Vs CCE (Dated: March 4, 2014)
CE/ST - Disclosure of Unaccounted income of about Rs.42 crores before Income Tax
authorities - Director admitting that this amount was realized on account of Sale and
Marketing of Tobacco products - CE duty demand confirmed against manufacturer of
Tobacco products in respect of the "unaccounted sale" - Simultaneously, Service Tax
demand under the head ‘Business Support Services' raised on the said Marketing
company is also upheld - transaction cannot amount to both Service and manufacture
& sale at the same time; it can be only one of the two - On this very ground alone,
impugned order confirming CE duty cannot be prima facie sustained - Unconditional
waiver from pre -deposit & stay granted: CESTAT
Also see analysis of the Order
2014-TIOL-685-CESTAT -AHM
M/s Power Build Ltd Vs CCE (Dated: February 17, 2014)
Central Excise – CENVAT credit – availment of credit of tax paid under ‘GTA',
pertaining to outward transportation is under dispute herein. Held: Settled in the
judicial pronouncements like Applied Auto Parts case that credit on Outward
Transportation is admissible provided the delivery of finished goods by the appellant is
contracted under FOR destination to be made at the door steps of the buyers, as
clarified by CBCE vide circular dated 23.8.2007 - credit admissible subject to
fulfilment of certain conditions - However, appellants has to establish their case before
the Adjudicating Authority with documentary evidence that the finished goods are
contracted to be supplied on FOR destination basis at the door steps of buyers –
impugned order passed by the first appellate authority is required to be set aside and
the matter remanded back to the adjudicating authority for denovo consideration appellant shall produce all the relied upon documents available with them to establish
their case that Outward Freight is incurred on FOR basis and that conditions specified
by CBCE Circular dtd 23.8.2007 are fulfilled - Needless to say that Adjudicating
Authority should give an opportunity of personal hearing to the appellant to explain
their case.
2014-TIOL-672-CESTAT -DEL
M/s Resinova Chemie Ltd Vs CCE (Dated: April 02, 2014)
Central Excise - Demand of duty on shortages of raw materials - Though the appellant
have admitted shortages of raw materials, there is plausible explanation for the same
as the appellant could not update the records in SAP due to connectivity issues - It is
settled law that mere shortages in stock cannot lead to the inevitable conclusion of
clandestine removal - Impugned order is set aside.
2014-TIOL-671-CESTAT -DEL
CCE Vs M/s Royal Aluminium Co Pvt Ltd (Dated: April 02, 2014)
Central Excise - CENVAT credit denied on the ground that the imported aluminium
scrap was not received in the factory and the scrap used was obtained from local
kabaries - No error in the order of Commissioner (Appeals) setting aside the demand
on the ground that the allegation that imported aluminium scrap was substituted with
the locally procured scrap by the Appellants could not be proved by the Department.
2014-TIOL-670-CESTAT -DEL
Shri Sanjay Kumar Sahu Vs CCE (Dated: April 04, 2014)
Central Excise - Confiscation of Indian currency on the ground that the same
represents sale proceeds of gutkha - Before confiscating the currency, the Revenue
must establish that there was by sale; that the sale was of smuggled goods; that the
sale was a person having knowledge reason to believe that the goods were smuggled
origin; that the identity of the seller and buyer must be established by the customs
authorities - If all the above ingredients of Section 121 of the Customs Act, 1962 are
not established by the Revenue, the violation of Section 121 cannot be made out Impugned order set aside.
2014-TIOL-667-CESTAT -AHM
M/s Ratnamani Metals And Tubes Ltd Vs CCE & ST (Dated: March 7, 2014)
Central Excise - CENVAT credit - Appellant discharged tax liability with cess from
cenvat account, on ‘GTA' and sales commission paid to overseas agents (‘BAS');
objected to in CERA audit requiring them to pay the dues under reverse charge in
cash; subsequently paid the impugned amounts in cash and took suo moto credit of
the previous debits - Revenue viewed that the suo moto credit was irregular; that the
impugned debits ought to have been claimed as refund under Sec 11B of the CEA
1944; and proposed demand for recovery of the same - demand confirmed with
interest and penalty in adjudication, affirmed by Commissioner (Appeals) and agitated
herein.
2014-TIOL-666-CESTAT -DEL
CCE Vs Decent Drugs Pvt Ltd (Dated: April 2, 2014)
Central Excise CENVAT Credit Credit availed on items used for manufacture of support
structures - Tribunal in a number of other appellants similar situate has taken a view
that when decisions of the Higher appellate authorities, during the relevant period,
were in favour of the assessee, no malafide can be attributed to the assessee so as to
invoke the longer period of limitation. From the fact that the credit was being availe d
by reflecting the same in their statutory records, in which case no malafide can be
attributed on the part of the respondents so as to justifiably invoking the longer
period of limitation No merit in revenue appeal.
2014-TIOL-665-CESTAT -DEL
M/s Kisan Sahkari Chinni Mills Ltd Vs CCE (Dated: April 4, 2014)
Central Excise - Manufacture of dutiable and exempted goods - CENVAT Credit availed
on molasses used in manufacture of rectified spirit cleared on payment of 8% amount
in terms of Rule 6 of the CENVAT Credit Rules, 2004 - Revenue demanding entire
CENVAT credit availed on molasses on the ground that no dutiable goods were
manufactured during the disputed period - It may happen that on one day the
appellant may manufacture only dutiable product and on the other they may only
manufacture exempted product - The periods cannot be segregated in that manner so
as to finalize the as sessee liability - Accordingly, there is no warrant to do so in terms
of the Cenvat credit Rules - Demand set aside.
2014-TIOL-658-CESTAT -MUM
Hindustan Petroleum Corporation Ltd Vs CCE ( Dated: February 27, 2014)
CE - Refund - if the claimant himself has treated the refund amount due as
“expenditure” and not as “claims receivable”, the claimant cannot said to have passed
the test of unjust enrichment: CESTAT
Also see analysis of the Order
2014-TIOL-657-CESTAT -DEL
Ms Mamta Garg Vs CCE ( Dated: February 24, 2014)
CE - Main appellants had admittedly settled the dispute before the Settlement
Commission and have not been vested with any penal liability - in such a scenario
whether imposition of penalties on the present appellants who are only charged with
colluding and abetting the main appellant is justified or warranted - Difference of
Opinion - matter referred to TM: CESTAT
Also see analysis of the Order
2014-TIOL-655-CESTAT -DEL
M/s Whirlpool Of India Ltd Vs CCE & ST ( Dated: December 24, 2013)
Central Excise - Stay / Dispensation of pre -deposit - CENVAT credit - Appellant availed
credit of service tax paid on the premium for Group Insurance Policy provided by the
appellant to their workers, viewed by Revenue as not an input service under Rule 2(l)
of the Cenvat Credit Rules 2004 - demand for recovery of irregularly availed credit
along with interest and penalty confirmed in adjudication, affirmed by Commissioner
(Appeals), and agitated herein.
Held: It is clear that the Cenvat credit in respect of Medical Insurance Policy provided
by the Appellant to their employees is sought to be denied only on the ground that the
same has no nexus with the manufacture of final product and is not an input service In the show cause notice, there is no allegation that the medical insurance cover also
includes the family members of the employees; issue was not considered by the
adjudicating authority, but was raised for the first time before the Commissioner
(Appeals) - well settled law laid down by a series of Judgments of the Apex Court
including in the case of Toyo Engineering India Ltd. that the grounds, which do not
find mention in the show cause notice, could not be taken in the adjudication or
appeal proceedings and that the adjudication order or appellate order cannot travel
beyond the grounds mentioned in the show cause notice - impugned order as such
has travelled beyond the allegations made in the show cause notice - prima facie, it is
not disputed that the entire cost of Medical Insurance Policy is included in the cost of
production of the goods and for this reason also, the credit would be admissible in
view of the Larger Bench ruling in the GTC case - core issue as to whether the service
of Medical Insurance cover provided to the workers is eligible for Cenvat credit or not,
stands decided by the Karnataka High C ourt in the cases of Stanzen Toyotetsu India
(P) Ltd. and Micro Labs Ltd. - appellant have a prima facie case in their favour, and
the requirement of pre-deposit of Cenvat credit demand, interest thereon and penalty,
therefore, is waived for hearing of the appeal and recovery thereof is stayed till the
disposal of the appeal.
2014-TIOL-656-CESTAT -DEL
M/s Ultratech Cement Ltd Vs CCE ( Dated: February 18, 2014)
Central Excise - CENVAT credit - Input services credit availed on construction of
residential colony near the factory as also of cleaning services obtained for the
residential colony and guest house, under dispute herein - Issue settled by the AP
High Court ruling in the case of ITC Limited, followed in appellant's own case in the
Tribunal's Final Order No. 1680/2012-SM(Br) dated 21.12.2012.
2014-TIOL-653-CESTAT -MUM
Ramkrishna Electricals Ltd Vs CCE (Dated: March 6, 2014)
CE - Appellant supplying standby transformer to client when the one initially sold is
received for repairs - after repairs, the standby transformer is received back in factory
and appellant takes credit of duty paid thereon while initially clearing the same Revenue objecting to taking such credit - the expression "or for any other reason"
used in Rule 16 of CER, 2002 is of wider connotation - prima facie case made out in
favour - pre -deposit waived and stay granted: CESTAT [para 4]
Also see analysis of the Order
2014-TIOL-652-CESTAT -AHM
M/s Manish Organics India Ltd Vs CCE (Dated: April 23, 2014)
CE - Glyoxal used in the manufacture of Drug intermediates which exempted under
Notification No.147/1984-CE, dt.19.06.1984 – based on an intimation to the Drug
Controller that Glyoxal 40% is used in the manufacture of drug intermediates,
Revenue demanding duty on Glyoxal – later appellant intimating Drug Control
Authorities that they have started using Glyoxal 20% in the manufacture of exempted
drug intermediates – appellant contending that Glyoxal 20% is not a stable product
capable of being sold, which is based on the test report of Dy.Chief Chemist Vadodara
and hence cannot be charged to duty – Commissioner confirming demand and appeal
before CESTAT. Held: No investigation has been done by the Revenue to argue that
unstable Glyoxal 20% cannot be used in the manufacture of exempted drug
intermediates manufactured by the appellant - It is also observed from the chemical
test report dt. 24.01.1991 from Chemical Examiner, Central Excise, Vadodara, that
Glyoxal 20% on storage, deteriorates and cannot be considered as marketable - In
the light of the above comprehensive evidences brought on record by the appellant, it
cannot be said that drug intermediates are manufactured by the appellant only from
the stable Glyoxal 40% - No case can be made against the assessee on presumptions
and conjectures – appeal allowed with consequential relief: CESTAT [ para 4]
2014-TIOL-651-CESTAT -KOL
M/s Bhalotia Auto Products Ltd Vs CCE & ST (Dated: March 18, 2014)
Central Excise - Stay / dispensation of pre deposit - Valuation - Body builder
(Appellant 1), manufacturing vehicles for Appellants 2 & 3, charged with not including
an amount of Rs.10,000+Cess (Specific Excise Duty) relating to chassis on which
credit is availed; also not including the amount paid in respect of freight and
insurance charges while arriving at the cost of chassis received. Held: Undisputed that
the body builder is taking credit of Rs. 10,000/ - paid upstream on chassis as a special
duty and hence, prima -facie, the Applicant has a strong case in this regard inasmuch
as, the amount relatable to credit taken, cannot be considered as an element of cost Ratio of Tribunal stay order in Hyva (India) Ltd. applicable - In case of Tata Motors
ruling e
r lied upon by Revenue, the issue was confirmation of duty against the
differential value between the R.S.O (Regional Sales Office) by M/s Tata Motors and
the assessable value on which the duty was paid by the body builder arrived by the
body builders on co sting basis - In the present case, show-cause notice issued against
Appellant 1, proposing inclusion of Rs. 10,000/- plus Education Cess into the value
arrived at by the body builder for assessment to duty - facts are akin to the facts of
the case covered in the case of M/s Hyva (India) Pvt. Ltd. - Applicants made out a
prima -facie case for full waiver; Predeposit of all dues adjudged against all the
Applicants is waived and its recovery stayed during pendency of the appeal.
2014-TIOL-650-CESTAT -AHM
M/s Krishna Screen Art Vs CCE (Dated: April 23, 2014)
CE - Clandestine manufacture and removal of processed fabrics without payment of
duty - entire case is based upon the packing register maintained at the premises of
M/s. Sunira Traders and accepted by the sole proprietor of the four units that the said
register contains details of the processed fabrics received from Shri Krishna Screen
Print Art - in vie w of such a categorical admission by the proprietor who is the sole
beneficiary of non -discharge of duty, evasion of duty is conclusively established certificate of Chartered Engineer relied upon by the appellant to prove that they had
no capacity to manufacture the quantum of processed fabrics on which duty has been
demanded has been issued in the year 2005 whereas case booked in the year 2001
and does not indicate as to whether the Chartered Engineer visited the factory
premises of appellant Shri Krishna Screen Print Art or whether he witnessed the
production for any specific period - said certificate has no evidentiary value in the
absence details of machinery in installed and noticed as working – duty confirmed
penalties imposed are correct – appeals rejected: CESTAT [ paras 13, 14, 17]
2014-TIOL-644-CESTAT -MUM
CCE Vs Crompton Greaves Ltd (Dated: March 3, 2014)
CE - Condonation sought for the delay in filing appeal on the ground of Annual
General Transfer is not maintainable: CESTAT
Also see analysis of the Order
2014-TIOL-642-CESTAT -AHM
M/s Nandan Synthetics Pvt Ltd Vs CCE & ST (Dated: April 22, 2014)
CE - appellant, a 100% EOU, cleared the products manufactured by him out of
indigenous raw material discharging 50% of the amount of duty payable - Revenue
seeking to deny the concession by citing provisions of paragraph 6.8 of the EXIM
Policy inasmuch as holding the view that benefit of paragraph 6.8(b) of the EXIM
Policy will be applicable only to physical exports - in the case of Gandhi Fibers,
Tribunal vide order dt. 11.06.2009 relying upon the judgment of Virlon Textile Mills
Ltd. had allowed the appeal by holding that assessee is eligible to clear goods to
Domestic Tariff Area by taking 50% of the deemed exports value as their eligibility and this order has been upheld by the Gujarat High Court and against which decision
the SLP filed by the department has been dismissed - Revenue representative relying
upon the Madras High Court decision in case BAP Industries Ltd. will not carry the
case any further, as the Jurisdictional High Court's decision on the very same issue is
a recent one and has been upheld by the Apex Court & needs to be followed - order
set aside and appeal allowed with consequential relief: CESTAT [ paras 9, 10, 11]
2014-TIOL-640-CESTAT -DEL
M/s Park Nonwoven Pvt Ltd Vs CCE (Dated: April 4, 2014)
C X- Semi-finished goods destroyed in fire accident - as the appellant is not liable to
pay any duty on semi-finished goods, there is no requirement to file remission
application - therefore, rejection or acceptance of remission application is ineffective:
CESTAT
Also see analysis of the Order
2014-TIOL-634-CESTAT -MUM
M/s Kokan Synthetics And Chemicals Pvt Ltd Vs CCE (Dated: February 3,
2014)
Modification application - Stay order passed by Tribunal by relying upon a decision
which decision had already been overruled by the Larger Bench of the CESTAT - in
these circumstances, stay order is recalled and matter is posted for fresh hearing Miscellaneous application allowed: CESTAT
2014-TIOL-633-CESTAT -MAD
M/s Chettinad Cement Corporation Ltd Vs CCE (Dated: May 8, 2013)
Central Excise - Stay / dispensation of pre deposit -Prayer for extension of stay
ordered previously - contested by department on the grounds that with effect from
10.05.2013, stay cannot be extended beyond 365 days and that the Apex Court ruling
in the Kumar Cotton Mills case is inapplicable from that date. Held: In the case of SRF
Ltd., the decision of the Supreme Court in the case of Kumar Cotton Mills was not
placed before the Bench - Noted that in the present case there is a direction that
predeposit of the balance amount shall remain waived during the pendency of the
appeal - Accordingly, the preliminary objection raised by the department is rejected.
2014-TIOL-632-CESTAT -KOL
M/s Bharat Ingot Steel Co (P) Ltd Vs CCE & ST (Dated: December 12, 2013)
Central Excise - Stay / dispensation of pre deposit – Clandestine clearance, common
issue in all cases – Expert technical opinion taken in the year 2000, on the average
electricity consumption for manufacturing unit quantity of MS Ingot and compared
against actual consumption - The difference between the quantity of production so
determined and the quantity of Ingots shown as manufactured and cle ared in the
statutory Daily Stock Account(DSA), had been alleged as the quantity cleared without
payment of duty – Demands confirmed with interest and penalty, agitated herein.
Held: Bombay HC ruling in the Orange Castings case followed the Bhagawati Ispa t
ruling and considered various other judgments approved evidences / observations in
the Sridhar castings case – Revenue directed to file evidences, which was done Prima facie, found that more or less, similar evidence/circumstances, as referred to in
Shridhar Castings case have been brought out on record by the Revenue against the
Applicants in the present set of Appeals - prima facie, though the Applicants have all
along been disputing the basis of consumption of electricity for confirmation of the
demand, did not bring out any materials on record, justifying the high consumption of
electricity, which varied significantly - Applicants could not make out prima facie case
for total waiver of pre -deposit of the dues adjudged - Keeping in view the financial
hardships expressed by the Applicants, the interest of revenue and following the
principle of law laid down by the Bombay High Court in Orange Alloys' case, each
appellant directed to pre -deposit 25% of the duty confirmed, within a period of eight
weeks; upon compliance, the balance dues adjudged against each of the Applicants
would stand waived and its recovery stayed during the pendency of the Appeals.
2014-TIOL-631-CESTAT -BANG
M/s Molex (India) Pvt Ltd Vs CCE (Dated: June 19, 2013)
Central Excise - Stay/dispensation of pre-deposit - CENVAT Credit - 100% EOU Statute itself provides that duty payable by 100% EOU is excise duty only and the
quantum is required to be worked out based on customs duty leviable on the goods Question of denial of benefit of CENVAT Credit does not arise - Waiver of pre -deposit
and stay of recovery ordered - Section 3 of the Central Excise Act 1944.
2014-TIOL-630-CESTAT -DEL
M/s Paramount Communication Ltd Vs CCE (Dated: April 3, 2014)
CX - CENVAT credit denied on Outdoor Catering services on the ground that the LB
while granting the benefit in GTC case had noted that Canteen services is mandatorily
required to be provided when number of workers is more than 250 whereas in the
case of the appellant the number is less - It is the ratio of the law declared by the
Larger Bench which is applicable and not the reasoning – CENVAT credit on Outdoor
Catering services is admissible even if number of workers in the factory is less than
250 – Appeal allowed: CESTAT [ paras 3, 5]
Also see analysis of the Order
2014-TIOL-628-CESTAT -MUM
Colour Roof (India) Ltd Vs CCE (Dated: February 12, 2014)
CX - Activity of de-coiling the sheets, cutting to length, shearing and other activity like
de-greasing, cleaning, etc. and clearing the same on payment of duty by utilizing
CENVAT credit – Revenue alleging that activity does not amount to manufacture and
hence credit availed should be reversed - Once duty on final products has been
accepted by the department, CENVAT credit availed need not be reversed –Appeals
allowed: CESTAT [para 7]
Also see analysis of the Order
2014-TIOL-627-CESTAT -MUM
Bhuwalka Steel Industries Ltd Vs CCE (Dated: March 6, 2014)
CENVAT – Credit denied on the ground that Capital goods were procured prior to
01.04.2000 and have been put to use in June 2000 – in the case of Rishi Steels &
Alloys P Ltd. credit has been allowed – following the precedent decision appellants are
entitled to credit – appeals allowed: CESTAT [para 3]
2014-TIOL-626-CESTAT -DEL
Gajroula Spinning Mills Vs CCE (Dated: March 5, 2014)
CE - Appellant applying to Asst. Development Commissioner, Noida SEZ & Asst.
Commr ., C & CE, Hapur on 19.11.2006 for conversion of 100% EOU to EPCG scheme
and de -bonding – Duty on imported and indigenous capital goods, of Rs.39,11,250/paid by appellant in April, 2007 as directed by I/c Range Superintendent – pursuant
thereto, in November, 2007, Development Commissioner conveying final de-bonding
and allowing conversion of 100% EOU to EPCG Scheme – after 4 ½ years a SCN was
issued alleging that appellant should have remitted duty at the rate of 16.48% instead
of 5% on indigenously procured capital goods as per para 8(i) of Notification No.
22/2003-CE dated 31.3.2003 - Prima facie, invocation of the extended period of
limitation for confirming demand of excise duty, interest and penalty, where the entire
material facts were within the domain and knowledge of the competent authorities
service November 2006 to November 2007, is unjustifiable – strong prima facie case
in favour – Pre -deposit waived and stay granted: CESTAT [ para 3]
2014-TIOL-625-CESTAT -AHM
M/s Balmer Lawrie And Co Ltd Vs CCE & ST (Dated: March 7, 2014)
Central Excise – CENVAT credit - excess duty paid during the month of March 2008
re-credited by appellant in RG-23A part-II on 29.04.2008 suo moto – viewed by
department as erroneous; demand for recovery of credit with interest and penalty
confirmed in adjudication, affirmed by Commissioner (Appeals), agitated herein.
Held: Issue no longer res integra – High Court ruling, dire ctly to the point of dispute,
preferred as precedent over the Tribunal Larger Bench ruling relied upon by Revenue
– Impugned order set aside.
2014-TIOL-619-CESTAT -MUM
Tata Motors Ltd Vs CCE (Dated: March 25, 2014)
CX - Valuation - So -called 'special discount' is not a discount at all is established by
the fact that it was never passed on to the ultimate customers of cars and, therefore,
is includible in Assessable value - Demand of Rs.59 crores upheld against M/s Tata
Motors Ltd by CESTAT
Also see analysis of the Order
2014-TIOL-617-CESTAT -MUM
CCE & C Vs Raymond Ltd (Dated: March 20, 2014)
Refund - Amount claimed as refund is not shown as 'receivables' in the books of
account and the same were expensed out in the P & L account - if this be so, it
signifies that the respondent has adjusted the amount in their income while arriving at
the net profits thereby implying that the incidence of duty has been passed on to third
parties - Claim hit by unjust enrichment - Revenue appeals allowed: CESTAT [paras
5.2, 6]
Respondent paying duty of Rs.76.61 lakhs on Yarn of waste wool after claiming
CENVAT credit on inputs used for its manufacture and later seeking refund of the said
duty by claiming benefit of captive consumption notification 67/95 -CE & by reversing
credit of Rs.3.12 lakhs - reversal made after filing refund claim - refund claimed is for
the period June 2001 to June 2002 - no evidence has been led by respondent to
justify that the credit reversed pertains to the inputs which was used in the
manufacture of exempted final product for the whole period - bar of unjust
enrichment has also not been crossed by respondent - merely because goods were
sold below cost, it does not mean that incidence of duty has not been passed on respondent has not discharged the statutory obligation cast on it to justify that claim
is not hit by bar of unjust enrichment - order of Commr(A) is unsustainable in law Revenue appeals allowed: CESTAT [paras 5.2, 6]
Also see analysis of the Order
2014-TIOL-616-CESTAT -AHM
M/s Yash Laboratories Vs CCE & ST (Dated: October 17, 2013)
Central Excise - Refund - appellant has been agitating for the amount of interest due
to them on the refund filed by them - OIO dated 22.05.2012 is in favour of the
assessee granting them refund of the amount which was sought, but is totally silent
on the interest which was demanded by the appellant, presumably vide letter dated
26.6.2012 - The first appellate authority in the impugned order has recorded that
against this letter, appellant has preferred an appeal on 19.09.2012 which should be
within time - first appellate authority should have considered the appeal and disposed
of the same on merits instead of holding that the appeal has been filed by the
appellant against order in original dated 22.5.2012 - impugned order needs to be setaside and matter needs to be heard and disposed of by the first appellant authority on
merits - Accordingly, impugned order set aside and matter remitted back to the first
appellate authority to reconsider the issue afresh after following the principles of
natural justice.
2014-TIOL-615-CESTAT -MAD
Inox Air Products Ltd Vs CCE (Dated: October 15, 2013)
Central Excise - Stay / dispensation of pre deposit - CENVAT credit of input services
under Rule 2(l) of the CENVAT Credit Rules 2004 - credit availed on Audit Fees, ISD
Distribution, GTA, Manpower Supply, Security Service, Repairs and maintenance,
testing etc. denied in adjudication on the ground that applicant did not prove any
nexus between the input services and their manufactured products namely, industrial
gases supplied in applicant's own cryogenic containers; agitated herein.
Held: The degree of nexus cannot be proved in respect of input services with
manufactured products as in the case of inputs - Supreme Court itself doubted the
decision of Maruti Suzuki Ltd. and the matter has been referred to a Larger bench in
the case of Ramala Sahkari Chini Mills - waiver of pre-deposit of dues arising from the
impugned order granted for admission of appeals - Further there shall be stay on
collection of such dues during pendency of the appeals.
2014-TIOL-614-CESTAT -MUM
M/s Goodlass Nerolac Paints Ltd Vs CCE (Dated: March 3, 2014)
MODVAT credit denied on the ground that the duplicate copy of invoice has not been
produced and there was no co-relation between the factory to depot - it is not in
dispute that inputs have been received at the factory and used in the manufacture of
final product - co-relation of sale invoice is a curable defect and only a technical lapse
- no dispute that inputs are not duty paid - credit admissible - appeal allowed:
CESTAT [para 3]
2014-TIOL-605-CESTAT -MAD
M/s ITC Ltd Vs CCE (Dated: February 11, 2014)
Central Excise – Valuation – Inter unit transfer of goods consumed by the appellant
for further manufacture and clearance of goods to their own units – Appellant paying
duty under Rule 8 based on cost of production – While arriving at the cost of
production, whether the cost of raw material received from their own unit on paymen t
of duty under Rule 8 should be adopted as 115%/110% - Matter referred to Larger
Bench in view of the conflicting views of Mumbai and Chennai Benches – Facts are
different from the Larger Bench Ruling in case of Eicher Motors case.
Valuation under Rule 8 based on cost of production as per CAS 4 standards –
Inclusion of “Intra-Division Service Charges” and “Intra -Corporate Notional Charges” There is no reason to consider the amount of IDSC/ICNC debit notes as actual cost of
raw material and it cannot be added in the cost of raw material at the hands of the
appellant for captive consumption under Rule 8 of Valuation Rules.
CAS 4 – Exclusion of unabsorbed overheads due to idle capacity - “abnormal idle
capacity” would cover external factors including lack of orders - Finding of the
adjudicating authority that the that the appellant have not proved the idle capacity as
arising due to any abnormal reason is not sustainable - The unabsorbed overheads
referable to abnormal idle capacity for lack of order shall not form part of the cost of
production and the demand of duty is not sustainable.
Also see analysis of the Order
2014-TIOL-604-CESTAT -DEL
M/s Mangalam Cements Ltd Vs CCE & ST (Dated: January 17, 2014)
Central Excise – Cenvat credit - duty paid on welding electrodes and gases used for
repair and maintenance of plant and machinery availed as credit under Rule 2(k) of
the CCR 2004 denied in adjudication and also by Commissioner (Appeals) on the
ground that said activity cannot be held to be an activity associated with the
manufacturing process.
Held: Issue is no more res integra and stands settled in favor of appellant by the High
Court of Chhattisgarh and also by High Courts of Rajasthan and Karnataka - In as
much as the issue stands decided, decision of the Tribunal in Sa mruddhi Cement case
followed; impugned order passed by the Commissioner (Appeals) set aside; appeals
allowed with consequential relief.
2014-TIOL-600-CESTAT -DEL
CCE Vs M/s IPCA Laboratories Ltd (Dated: January 22, 2014)
Central Excise – CENVAT credit on inputs – Applicant availed credit on inputs sent to
job worker directly or through them – job worker discharged duty on clearances,
which was reimbursed by applicant along with job charges – Revenue viewed that
applicant was ineligible to avail credit inasmuch as the duty on clearances was not
discharged by them, culminating in demand for recovery of irregular credit with
interest and penalty in adjudication – relief granted by Commissioner (Appeals) on
limitation as well a s revenue neutrality, agitated by d-epartment herein.
Held: If the goods manufactured at the job worker's end were returned to the
assessee and then cleared by them on payment of duty, they were admittedly entitled
to availment of CENVAT credit duty paid on the inputs – Factually, when the duty was
paid by the job worker, the same stands re -imbursed by them - As such, the duty is
deemed to have been paid by the manufacturer, through the job worker and the
Revenue has received the entire duty element due to them and denial of credit to the
respondents would not be justified - no infirmity in the impugned order that the entire
credit having been taken by the respondents on statutory records and having been
reflected in them, no suppression can be attributed to them - demand raised beyond
the normal period of limitation has rightly been struck down by the appellate authority
as barred by limitation - no merits in Revenue's appeal.
2014-TIOL-599-CESTAT -KOL
M/s Auro Ispat (India) Pvt Ltd Vs CCE, C & ST (Dated: September 18, 2013)
Central Excise - Stay / dispensation of pre deposit – clandestine clearance – Duty
Demand confirmed on impugned clearances based on computerized data from pen
drive recovered during search, along with interest and penalties on firm and
individuals under Sec 11AC of the Central Excise Act 1944 and Rule 26 of the Central
Excise Rules 2002.
Held: Present case revolves around retrieval of private records/data stored in a Pendrive maintained by the employee of Applicant No.1 - Prime facie, adjudicator has
dealt in detail the evidences retrieved from the Pen-drive from the employee of the
Applicant No.1 and on comparing it against the statutory register maintained in the
factory, discrepancies were noticed relating to the production and clearance of
finished goods - prima facie, the data which has been retrieved from the possession of
the employee of the Applicant has relevance to the statutory records as there were
common transactions - it is a question of appreciation of evidence and not a case of
no evidence - Applicant No.1 directed to deposit 50% of the total duty confirmed after
deducting the amount of Rs. 30.00 Lakhs already deposited by them during the
course of investigation - Directors cannot absolve themselves at this stage pleading
that there was no involvement in the clandestine manufacture and removal of MS
ingots from their factory during the material period - Applicant No.2 & 3 directed to
deposit Rs.1.00 Lakh each within a period of eight weeks; upon compliance by all,
pre -deposit of balance dues adjudged against Applicant No.1, 2 & 3 would be waived
and recovery thereof be stayed during pendency of the Appeal.
2014-TIOL-594-CESTAT -BANG
M/s Global Oil Industries Ltd Vs CC, CE & ST (Dated: September 6, 2013)
Central Excise - CENVAT Credit - Capital Goods - Eligibility - Appellants are ineligible
for availment of Cenvat credit on capital goods, which were used in manufacture of
final products exempted from duty at the time when the capital goods were received,
in view of the decision of the Tribunal - Revenue demand for reversal of Cenvat Credit
is upheld while penalty is set aside.
2014-TIOL-590-CESTAT -BANG
Indus League Clothing Ltd Vs CCE, C & ST (Dated: December 2, 2013)
Central Excise - Readymade garments (RMG) returned for refining / repair /
reconditioning under Notification No.30/2004 -CE dt. 09/07/2004, entered in Form -V
Register, subsequently cleared therefrom after reconditioning - Revenue sought to
recover
credit
attributable
to
the
RMG
with
interest
and
penalty.
Credit availed on returned goods under Rule 16 of Central Excise Rules 2002 not
accounted for in Annexure-10, Form -IV or RG-I - unless it is shown that the appellant
was following a practice of not entering the returned goods anywhere other than in
Form V register, the conclusion that the same were not included in the stock of inputs
cannot be reached - when there is no evidence at all and there is no logical basis for
the conclusions reached and no investigation is conducted to bring out the facts or
verify important aspects, the only obvious solution would be to hold that extended
period could not have been invoked.
2014-TIOL-586-CESTAT -MUM
Alpha Impex Pvt Ltd Vs CCE (Dated: March 11, 2014)
CE - Appellant has misrepresented the facts before the High Court by stating that they
had taken the plea of financial hardship before the Tribunal when the facts were
otherwise - Tribunal cannot assume financial hardship on the part of the appellant Such conduct is highly improper – Matter posted for final disposal: CESTAT [para 3, 4]
Also see analysis of the Order
2014-TIOL-585-CESTAT -BANG
M/s Arani Agro Oil Industries Ltd Vs CCE (Dated: May 15, 2013)
Central Excise - Stay/Dispensation of pre-deposit - Classification - Limitation - Prima
facie appellant's claim under the ground of limitation is sustainable as the show cause
notice issued by department for the period in question was beyond normal period of
limitation - In view of earlier judgments of the Tribunal, waiver of pre -deposit and
stay of recovery ordered.
2014-TIOL-582-CESTAT -MUM
Srj Peety Steels Pvt Ltd Vs CCE (Dated: January 31, 2014)
CE - Clandestine manufacture and removal of Ingots without payment of duty alleged
on the basis of electricity consumption - difference of opinion - Matter referred to
Third Member: CESTAT
Also see analysis of the Order
2014-TIOL-579-CESTAT -DEL
M/s Indian Oil Corporation Ltd Vs CCE & ST (Dated: April 2, 2014)
Central Excise - Stay and Waiver of pre -deposit: CENVAT Credit on Capital Goods There is absolutely no requirement that the capital goods at the time of receipt must
be owned by manufacturer or that the same would cease to be capital goods, if they
are installed in the factory and become fixed to earth:
The Department sought to deny the Cenvat Credit on the two grounds, namely ;-
(a) at the time of receipt of capital goods in the refinery where the same had been
installed for setting up Nephtha Cracker Plant, the appellant were not owner of the
goods, as the same had been brought by their contractor for setting up the plant; and
(b) the goods after being installed had become fixed to earth structure which is not
excisable a nd hence the Cenvat Credit of Central Excise duty involved these goods
would not be available to the appellant.
In term of the definition of 'capital goods' as given in Rule 2(a) of the Cenvat Credit
Rules, 2004, the capital goods are those goods which are specified in this Rule and
which (except for office equipment or appliance) are used in the factory of the
manufacturer of the final products or for providing of output service. Thus any item
which is covered by the list of the items mentioned in Rule 2(a) of the Cenvat Credit
Rules, except for office equipment or office appliances, and is used in any manner in
the factory of the manufacturer of the final products, would be covered by the
definition of the capital goods and accordingly would be eligible for Cenvat Credit.
There is absolutely no requirement that the capital goods at the time of receipt must
be owned by manufacturer or that the same would cease to be capital goods, if they
are installed in the factory and become fixed to earth. In fact, most of the capital
goods the machinery, equipment or instruments covered by Chapter 84, 85 & 90,
pipes and tubes, pollution control equipment refractories, and storage tanks are
required to be installed and after installation, the same put together constitute a
manufacturing plant, which is a fixed to earth structure. Just because after being
installed in the factory, the capital goods put together become a plant which is a fixed
to earth structure, the Cenvat Credit cannot be denied on the basis that the plan t
which is fixed to earth structure, is not excisable. This preposition of the Department
is, in fact absurd, as there is no such condition in Rule 2(a) for capital goods. For
capital goods Cenvat Credit, the items must be among those mentioned in this Rule
and should have been used in the factory of the manufacturer and how the items are
not used relevant. The words used in Rule 2(a) are "used in the factory of
manufacturer of the final product" not "used in the manufacture of final product".
Therefore, once any item received in the factory is "capital goods" in terms of Rule
2(a) of the Cenvat Credit Rules, and is used in the factory, the manufacturer would be
entitled to Cenvat Credit of excise duty paid in respect of the same. If the logic of the
commiss ioner in the impugned order is accepted, no capital goods Cenvat Credit can
be allowed in respect of any item of capital goods enumerated in Rule 2(a) of the
Cenvat Credit Rules, as all the items - various items of machinery covered under
Chapter 84, 85 & 90 of the Tariff, pipes & tubes, tanks, pollution control equipments
refractories etc. have to be installed in the factory before being put to use and after
installation, the same would become fixed to earth plant. Reading the impugned order
gives an impre ssion that the same has been passed without any application of mind.
We, therefore, are of prima facie view that impugned order is not sustainable and as
such the appellant have strong prima facie case in their favour.
The requirement of pre-deposit of th e Cenvat Credit demand, interest thereon and
penalty is, therefore, waived for hearing of the appeal and recovery thereof is stayed
till the disposal of the appeal.
Also see analysis of the Order
2014-TIOL-575-CESTAT -DEL
M/s Asian Colour Coated Ispat Ltd Vs CCE (Dated: April 2, 2014)
Cutting/Slitting and pickling of HR coils and sheets - appellant taking CENVAT credit
on HR coils/sheets and discharging CE duty by treating activity as manufacture - in
view of fact that cutting/slitting of coils has held as being not amounting to
manufacture by Delhi HC in case of Faridabad Iron & Steel Traders Association,
whether appellant should have sought for a notification u/s 5B to regularize credit
taken - difference of opinion - Matter referred to Third Member: CESTAT
Also see analysis of the Order
2014-TIOL-574-CESTAT -DEL
M/s Hero Motors Ltd Vs CCE (Dated: March 4, 2014)
Central Excise -CENVAT Credit -cash refund of - Rule 5 of CCR -Interest for delayed
payment of refund - assesse gives up right to claim interest before Adjudication
authority - Assessee is not barred from claiming interest at appellate stage - No
estoppel against law: Assessee claimed refund of accumulated credit under Rule 5 of
the CENVAT Credit Rules. Even after three years refunds were not sanctioned.
Assessee gave letters to the Adjudication authority undertaking not to claim interest.
After getting refund, in appeal, assessee claimed interest.
In terms of Section 11BB if any duty ordered to be refunded under sub section( 2) of
the Section 11B to any applicant is not refunded within three months from the date of
receipt of application under sub -section(1), there shall be paid to that applicant,
interest at rate notified by the Central Government on such duty from the date
immediately after expiry of three months from the date of receipt of such application
till the date of refund of such duty. The refund under Rule 5 of the Cenvat Credit
Rules, 2004 is the refund of in cash of the accumulated Cenvat Credit availed by a
manufacturer in respect of inputs and input services used in the manufacturer of
finished goods which had been exported without payment of duty under bond/ LUT
and which manufacture is unable to utilize for payment of duty on clearance for home
consumption. Clause (c) of Proviso to section 11B (2) refers to the "refund of credit of
duty paid on excisable goods used as inputs in accordance with the rules made, or any
notification issued under the Central Excise Act, 1944", as the refund claim not hit by
the principle of unjust enrichment. Thus section 11B covers the refund of Cenvat
Credit mentioned in Clause (c) of the Provision to section 11B (c). Therefore, the
refund claims filed under Rule 5 of the Cenvat Credit Rules, 2004 have also to be
treated as refund claim under section 11B and the Proviso of Section 11B (2) would be
applicable to the same.
There is no estoppel in law against an assessee in taxation matters .
Right conferred under the statute cannot be given up on the basis of concession made
by any party to the lis . Therefore, just because the appellant by the letters addressed
to the Jurisdictional Assistant Commissioner had given up their claim for interest on
the amount of refund for the period of delay in sanction of the refund claims, they
would not be estoppel from challenging the denial of interest and claiming the same
when they are entitled for the same under the statutory provisions of Section 11BB .
Also see analysis of the Order
2014-TIOL-573-CESTAT -DEL
CCE Vs M/s Grasim Industries Ltd (Dated: February 12, 2014)
Central Excise - Valuation - cylinder testing charges are not includible
assessable value of the liquid chlorine:
in the
The respondent assessee are manufacturers of Caustic Soda, Liquid Chlorine, S.B.P
etc. chargeable to Central Excise duty under various Headings of Chapter 28 of the
Central Excise Tariff. The liquid Chlorine is sold by them to their customers in their
own cylinders called Tonners, and also in the cylinders/Tonners brought by the
customers. Some quantity of liquid chlorine is also supplied through pipeline. The
Tonners are required to undergo periodical Hydrau lic testing as per the provision of
Gas Cylinder Rules, 1981.
The point of dispute is as to whether the testing charges for the customers - tonners
which according to the Respondent are optional, are part of the transaction value of
the goods.
Any amount that the buyer is liable to pay to or on behalf of assessee for the reason
of or in connection with sale would cover the amount paid or payable by the buyer for
the goods, only for the expenses which contributed to the value of the goods or are
necessary to make the goods marketable and this expression would not include the
amounts paid by the buyers for something which has no nexus with the emergence of
marketable goods or does not contribute to the value of the goods up to the point of
sale from the place of removal. Thus if some goods become marketable and can be
sold only when packed in certain type of containers and testing of those containers is
mandated by law, the testing charges of those containers would be includible in the
value along with the cos t of such containers if the containers are of durable and
returnable nature, the amortized cost of the container including testing charges during
the period of use would be includible in the assessable value .
In this case, the fact that liquid Chlorine manufactured by the Respondent is being
sold by them either in their own tonners or in the customers tonners or even through
pipeline, shows that Chlorine is marketable as such. It is also not disputed that testing
is optional and the testing charges have been charged only in those cases where the
liquid chlorine was supplied in the tonners brought by the customers and the
customers had requested for testing of their Cylinder/tonners. In these circumstances
neither the cost of tonners nor their testing charges would be includible in the
assessable value of liquid chlorine. In fact, in this case, the testing of the tonners
belonging to the customers on their request is an activity different from the sale of
Chlorine which is marketable as such and, hence the charges for such testing cannot
be said to be for the reason of or in connection with sale of Chlorine, as the customers
could have got the testing of their tonners done from other persons also .
Held : the cylinder testing charges are not includible in the assessable value of the
liquid chlorine.
Also see analysis of the Order
2014-TIOL-572-CESTAT -DEL
M/s Crest Steel And Power Pvt Ltd Vs CCE (Dated: January 20, 2014)
Central Excise - Cenvat Credit - Capital goods credit of 100% availed in the first FY
itself, instead of 50%, in violation of Rule 4 of the Cenvat Credit Rules 2004 - Demand
for reversal of the same with interest and penalty confirmed in adjudication, modified
by Commissioner (Appeals) and agitated herein.
Held: Commissioner (Appeals) found that though the credit was availed prematurely,
the same was actually utilised after it became due to the assessee - Billforge ruling
applicable and interest demand set aside - penalty imposed in terms of provisions of
Rule 15(1) of CENVAT Credit Rules, 2004 - malafide intent no pre -requisite for
imposition of penalty under the said sub-rule; as such, appellant is liable to penalty in
terms of the said Rule - However, keeping in view that the excess credit, though
taken by the assessee, was not actually utilised by them and as such no undue gain
stands availed by them, penalty reduced to Rs.2,000/-.
2014-TIOL-571-CESTAT -MAD
Tejas Networks India Ltd Vs CCE (ST) (Dated: August 2, 2013)
Central Excise - Offence case - Applicant company engaged in manufacture of optical
transmission equipment, 'multiplexers' - investigation revealed that the appellant was
clearing multiplexers unde r delivery challans without payment of excise duty to their
different offices and also to various parties in different parts of the country - duty
demands adjudicated with interest and penalties on company and individuals under
Sec 11AC of the Central Excise Act 1944 and Rule 26 of the Central Excise Rules
2002, agitated herein.
Held: Force in Revenue's view that the goods cleared without payment of duty for
which duty is now demanded cannot be considered as goods cleared to other units of
the appellant fo r further manufacture of other excisable goods - These are cases of
clearances for evasion of duty; valuation under Rule 8 will not apply; and the value of
comparable goods is correctly applied - The detailed work sheet annexed to Show
Cause Notice shows that value for each clearance has been worked out separately for
each transaction based on available data, not disputed by appellant - no merit in the
argument of the first appellant in this matter.
For goods to be marketable it is not necessary that they should be generally available
in the market - Marketability does not depend upon the number of purchasers, as held
by the Apex court in A.P. State Electricity Board case - Huge machineries as also small
parts of one machinery may be designed to the order of one customer and such item
may not be useful to others; Still such goods will be considered as marketable.
Allegation with evidence to prove clearance without payment of duty sufficient to shift
burden of proof to the appellant - second consignments sent on the pretext of goods
short shipped were clandestinely removed - Excise liability does not depend on
realisation of money but on manufacture and removal and evidence as presented
shows clearance the same goods twice - appellant has been freely removing goods
under the pretext of testing to be done, replacement of defective pieces etc without
payment of duty and proper accounting of the goods after testing etc. - In the case of
short shipment also this is only a method adopted for clandestine removal and not
cases of genuine supplies to make good short shipments - There are far too many
such cases which indicates malpractice rather than genuine mistake.
On limitation, case law relied upon by appellant distinguished and that relied upon by
Revenue found appropriate - Demands sustained on limitation aspect - No reason to
interfere with the impugned order against the first appellant - However in the case of
the second appellant and the third appellant they are only employees of the first
appellant which is a company - Nothing has been brought on record to show that they
have personally gained by the duty evaded - After imposition of adequate penalty on
the first appellant there is no justification to impose penalty on the second and their
appellants also; hence the penalties imposed on second and third appellant are set
aside.
2014-TIOL-561-CESTAT -BANG
M/s Jindal Aluminium Ltd Vs CCE (Dated: May 28, 2013)
Central Excise - Clearances to SEZ developer - Non-Payment of Duty - Appellant
cleared aluminum pipes to a SEZ developer without payment of duty - Demand of
duty by Revenue is not sustainable, as clearances made to SEZ developers without
payment of duty have to be considered as rightly made, in view of decisions of High
Courts - Appeal allowed.
2014-TIOL-556-CESTAT -BANG
M/s Apollo Tyres Ltd Vs CCE, C & ST (Dated: March 28, 2014)
CE - Appellant, a manufacturer of tyres - sale of tubes & flaps to dealers in the
replacement market as trading activity - CENVAT credit not taken on such tubes/fla ps
when used for trading purpose, however, credit taken when they are inserted into tyre
and cleared to OEM manufacturers - no separate accounts maintained of input
services viz. GTA service utilized in respect of trading of tubes & flaps - proportionate
credit of ST availed on GTA service & attributable to trading arrived at in accordance
with standard accounting principles is required to be reversed - appellant submitting
that even though this was not the ground on which show-cause notice was issued,
yet, they agreed to reverse the proportionate credit - appellant has written to the
department informing them about the trading activity conducted by them suppression cannot be invoked - demand should be limited to normal period question of penalty also does not arise - Appeal decided in above terms: CESTAT [
paras 4, 5]
2014-TIOL-555-CESTAT -BANG
M/s Apollo Tyres Ltd Vs CCE, C & ST (Dated: March 28, 2014)
CE - Proceedings have been initiated on the ground that the tubes and flaps sold
along with tyres in the replacement market cannot be considered as inputs at all and,
therefore, the CENVAT credit availed is required to be reversed - Tubes and flaps are
accessories and, therefore, have to be considered as eligible inputs - so also, since
credit is reversed at the time of clearance, there is no justification for the demands orders set aside with consequential relief: CESTAT [ paras 5, 6]
2014-TIOL-553-CESTAT -AHM
M/s National Conductors Vs CCE & ST (Dated: April 04, 2014)
CX - Appellant receiving broken and used copper wire from suppliers for conversion
into copper rods - due to purported exigency/emergency at the end of the persons
who had sent materials for job working, appellant cleared their own finished goods
viz. copper rods under the cover of job work challan without payment of duty – CE
duty demanded and confirmed against such supplies made which has been admitted
by the partner of the appellant firm – appellant submitting that the copper rods
manufactured on job work basis were later cleared on payment of duty and hence
demand cannot survive.
Held : Procedure for functioning under the job work is different and clearance of
finished goods manufactured in the appellants factory from his own raw material is
different – stand taken by lower authorities is correct - question of Revenue neutrality
would arise only when the activities of clearance takes place within the sister concern
or their own units – judgments cited do not apply to the facts of the case – no merits
in appeal, hence rejected: CESTAT [ paras 8, 9, 10]
2014-TIOL-548-CESTAT -AHM
CCE Vs M/s Panasonic Battery Of India Co Ltd And Vice Versa (Dated: April 1,
2014)
CE - Refund pursuant to finalization of provisional assessment - Commr(A) allowing
refund without going into the question of unjust enrichment - appeal filed by
Department - Revenue representative submitting that the appellant having cleared
the goods on duty paying documents under provisional assessment, the purchaser
would have availed the CENVAT Credit and the appellant is unjustly enriched in the
process if refund is sanctioned.
Held: LB in appellant’s own case has held that Doctrine of unjust enrichment will not
be attracted to the refunds pertain ing to the finalization of provisional assessment for
the period prior to 25.06.1999 when the linking proviso under Rule 9B(5) of Central
Excise Rules was not in existence - Revenue appeal rejected: CESTAT [para 8]
2014-TIOL-545-CESTAT -BANG
M/s AL Steel Industries Vs CCE (Dated: May 15, 2013)
Central Excise - Stay/Dispensation of pre-deposit - Classification - Manufacture Appellant's claim that galvanizing did not amount to manufacturing during the
demand period and it was only after 2011 budget that a Chapter Note was introduced
holding that galvanizing would amount to manufacture, is prima facie acceptable Waiver of pre-deposit and stay of recovery granted.
2014-TIOL-544-CESTAT -MAD
Cassel Research Laboratories Ltd Vs CCE (Dated: October 17, 2013)
Central Excise - Stay/Dispensation of pre-deposit - CENVAT Credit - Applicant availed
CENVAT Credit and depreciation on same amount - Whether depreciation claimed
wrongly during one year can be rectified after four years by writing back depreciation
claimed and its effect on CENVAT credit taken and utilized is debatable issue Applicant prima facie gained pecuniary advantage for some time against Rule 4(4) of
CENVAT Credit Rules - Pre-deposit of Rs.10,00,000/- ordered.
2014-TIOL-543-CESTAT -MUM
CCE Vs Raptakos Brett & Co Ltd (Dated: November 27, 2013)
CENVAT - furnace oil used for generation of steam which was captively consumed in
the manufacture of dutiable as well as exempted goods is Cenvatable - Revenue
appeal dismissed: CESTAT [para 6]
2014-TIOL-537-CESTAT -BANG
M/s Madras Cements Ltd Vs CCE (Dated: February 3, 2014)
Central Excise - Benefit of Rate of Duty - Appellant's claim that cement packed in bags
and cleared through their depot is eligible for benefit of rate of duty under Sl. No. 1C
of Notification No. 4/2006-C.E. dated 1.3.2006, is acceptable in view of the earlier
judgment of Supreme Court on similar issue - Industrial consumer should have
purchased the commodity from manufacturer, for purpose of benefit, as per Rule 2(a)
of SWM Rules - Depot cannot be said to be a different entity from manufacturer.
2014-TIOL-535-CESTAT -BANG
M/s BEML Ltd Vs CCE (Dated: October 1, 2013)
Central Excise – Stay/Dispensation of Pre-deposit – CENVAT Credit – Reversal –
Demand of Interest – Revenue issued show-cause notice u/s. 11AA/ s.11AB of the
Central Excise Act, 1944 for demand of interest and imposition of penalty against
CENVAT Credit availed wrongly and reversed by appellant – Prima facie , appellant
made out the case that the show cause notice was issued under a wrong Section and
in the absence of issuance of show-cause notice invoking extended period u/s. 11A,
the demand could not be sustained – Waiver of pre-deposit and stay of recovery
ordered.
2014-TIOL-530-CESTAT -DEL
M/s Goyal Tobacco Co Pvt Ltd Vs CCE (Dated: December 31, 2013)
CE - Unmanufactured Chewing Tobacco - Packing Machine Capacity Determination
Rules, 2010 - machines found in rented godown plugged into electric socket but with
essential parts like motor missing - these parts were not found in the premises whether conclusion by Commissioner that missing parts of the machines can always
be attached to the machines to make the same operational as it does not require
substantial engineering skills and thus goods can be deemed to have been
manufactured and cleared by deeming fiction of the Rules needs to be prima facie
upheld & pre-deposit is to be ordered - Difference of Opinion - Matter referred to Third
Member: CESTAT
Also see analysis of the Order
2014-TIOL-528-CESTAT -BANG
Sagar Cements Ltd Vs CCE (Dated: July 10, 2013)
Central Excise - Stay/dispensation of pre-deposit - CENVAT Credit - Disallowing of
Cenvat Credit - Whether structural parts such as steel, cement and TMT bars
embedded into earth for structures which are eventually used in manufacture of
cement, for an expanded production capacity constitutes to capital goods or
immovable property, is still disputable question - Conditional waiver of pre -deposit
and stay of proceedings ordered.
2014-TIOL-525-CESTAT -BANG
M/s Global Food Specialities Vs CCE (Dated: July 8, 2013)
Central Excise - Stay/dispensation of Pre -deposit - Valuation of Goods - Appellant's
contention that when there is no job work, there is no need to adopt the price at
which the goods are sold as basis for purpose of valuation, prima facie appears to be
acceptable, in view of Department's clarification to appellant in this regard and the
earlier judgment of Tribunal - Waiver of pre -deposit and stay of recovery granted Rule 10A of Central Excise Valuation Rules, 2000.
2014-TIOL-524-CESTAT -BANG
M/s Indofab Engineers Vs CC, CE & ST (Dated: June 26, 2013)
Central Excise - Stay/Dispensation of pre-deposit - CENVAT Credit - Disallowing of
Cenvat Credit - Prima facie, Revenue conclusion that the inputs have not been
received in the factory and Appellant have availed Cenvat credit wrongly, is not
acceptable - In absence of other evidences, evidences that non -passing of the vehicles
through the check-posts or the vehicle numbers mentioned in the invoices were
incorrect or appellant could not substantiate input receipts in the factory, cannot be
ground to deny the CENVAT credit, when the basis of sale is ex-delivery - Waiver of
pre -deposit and stay of recovery ordered.
2014-TIOL-519-CESTAT -MAD
Dalmia Cement (Bharat) Ltd Vs CCE (Dated: October 17, 2013)
Central Excise - Stay/Dispensation of pre -deposit - CENVAT Credit - Appellant availed
CENVAT Credit on cement and steel as capital goods - Since the issue has been
decided by Larger Bench and the Apex Court against appellant, it is proper to call for
pre -deposit of entire amount of duty - Pre -deposit of Rs. 13,29,994/ - ordered.
2014-TIOL-518-CESTAT -MAD
M/s Fine Cast Industries Vs CCE (Dated: September 13, 2013)
Central Excise - Cenvat Credit - Appellant No.2, scrap dealer, supplied MS scrap to
Appellant No.1, manufacturer of CI & SGI castings - Appellant No.1 availed credit on
basis of documents describing inputs as CR Coils / CR Sheets, whereas this was not
the input received and factually non duty paid scrap was received - credit denied in
adjudication, recovery of erroneous credit along with interest confirmed in
adjudication - penalties imposed on Appellant 1 under Rules 25(1)(a) & (b) of the
Central Excise Rules 2002, and on Appellant 2 under Rule 26 ibidem; agitated herein.
Held: In the case of M/s. Amex Alloys Pvt. Ltd., Tribunal upheld the demand of duty
along with penalty on the manufacturer as well as on the dealer under identical
circumstances - no reason to interfere with impugned order in the instant case.
2014-TIOL-514-CESTAT -MUM
Keltech Energies Ltd Vs CCE (Dated: February 17, 2014)
CE - To ascertain facts, the matter was remanded for decision afresh and, therefore, it
cannot be said that a new case has been made out - ROM application dismissed:
CESTAT
Also see analysis of the Order
2014-TIOL-509-CESTAT -MUM
CCE Vs M/s Jay Tanks & Vessels Pvt Ltd (Dated: February 19, 2014)
Rule 8 of CER, 2002 - Notfn. 12/2003-CE(NT) - Once the amended rules have come
into force, they have to be given full effect and, therefore, for the period from
1.4.2003, the new rate of interest shall apply and not the rate of interest which was
prevalent when the amount of duty was due - Otherwise, the entire rule becomes
infructuous/otiose - Revenue appeal allowed: CESTAT [paras 5.1, 5.2]
Also see analysis of the Order
2014-TIOL-504-CESTAT -DEL
M/s Shakti Steel Roiling Mills Vs CCE (Dated: January 24 2014)
Central Excise - CENVAT Credit - Disallowing of Cenvat Credit - Appellant has duly
complied with requirement of verifying genuineness of supplier as per Rule 7 of the
Cenvat Credit rules - Appellant's received raw materials along with invoice from
registered dealer, made payments through cheque, availed CENVAT Credit on such
invoices and filed RG 23A registers along with returns periodically - Revenue failed to
conduct inquires with the transporter and supplier during the relevant period Revenue made subsequent investigations which revealed that address of supplier was
subsequently changed and it was rightly registered at the address given at relevant
period - In absence of any evidence to show that the raw material was procured from
other sources, Revenue contention that the dealer issued invoices without actual
supply of goods is not sustainable.
2014-TIOL-491-CESTAT -BANG
M/s Toyota Kirloskar Motors (P) Ltd Vs CCE (Dated: July 17, 2013)
Central Excise - Stay/Dispensation of pre-deposit - CENVAT Credit - Prima facie,
CENVAT credit claimed towards insurance premium for parents of employees, training
of employees and services of clearance of baggage of Directors/family do not have
any relation with business of manufacture - Pre -deposit of Rs. 4 lakhs ordered.
2014-TIOL-490-CESTAT -BANG
M/s Tally Solutions Pvt Ltd Vs CCE (Dated: July 4, 2013)
Central Excise - Stay/dispensation of pre -deposit - CENVAT Credit - Appellants utilized
the accumulated service tax credit for payment of excise duty on excisable
goods/packaged software - From scrutiny of ER1 return, difficult to say that prima
facie there was mis-declaration or suppression of facts on part of appellants - Waiver
of pre-deposit and stay of recovery ordered.
Limitation – Show-cause notice served on 05.09.2011 for the period April 2005 to
August 2009, proposing to treat the CENVAT credit accumulated as lapsed, was
beyond period of limitation - Waiver of pre-deposit and stay of recovery ordered.
2014-TIOL-489-CESTAT -MUM
Kirloskar Oil Engines Ltd Vs CCE (Dated: February 10, 2014)
CENVAT - Rule 10 of CCR, 2004 - Shifting of Factory from one site to another whether excess credit lying in the books of accounts can be transferred even if inputs
or capital goods are not available for shifting or only part of the inputs/capital goods
are available. Held: Rule 10 nowhere stipulates that the credit that can be transferred
should be attributable to the inputs or capital goods that are transferred - even if
excess credit is available in the books of accounts the same can be transferred - no
bar imposed under rule 10(3) of CCR, 2004 - applicant has made out a strong case for
grant of stay - pre-deposit waived: CESTAT
2014-TIOL-484-CESTAT -MUM
CCE & CC Vs M/s Starlite Inds (I) Ltd (Dated: January 15, 2014)
Notification 10/97-CE - Clearance of Optical fibres and cables - certificate of Dy. Secy.
not produced at the time of clearance but applied thereafter and produced after
issuance of SCN - condition is not merely procedural but has to be strictly complied
with - fibres/cable in running length of 88 km cannot be considere d as
accessories/spare parts - benefit of Notification claimed by suppressing the material
fact - extended period of limitation rightly invoked - exemption not available Revenue appeal allowed: CESTAT [paras 7, 8, 9]
Also see analysis of the Order
2014-TIOL-483-CESTAT -MUM
CCE & C Vs Sun Pharmaceuticals Ltd (Dated: February 4, 2014)
CENVAT - at the time of taking credit, the goods manufactured were dutiable and,
therefore, credit was rightly taken - however, at the time of clearance goods were
exempt and, therefore, appellant reversed the credit attributable to inputs contained
in the exempted final products - this reversal is perfectly legal - no merit in Revenue
appeal, hence dismissed: CESTAT
2014-TIOL-482-CESTAT -MAD
CCE Vs M/s Ambit Infotech Pvt Ltd (Dated: July 9, 2013)
Central Excise - Exemption - Benefit of Notification No. 10/97 -CE dated 01.03.97
denied in adjudication in respect of clearances to educational institution on the ground
that DSIR certificate was not filed, allowed in appeal- agitated by Revenue. Held: all
supplies made to M/s. Siddarth Engineering Institute was for research purpose only
and were based on the Essentiality Certificate issued by the Registrar of Nagarjuna
University, complying with DSIR guidelines - under the notification, respondent
required to produce a certificate from the Head of the Institution in each case at the
time of clearance of the goods that they are intended to use exclusively for research
purpose; and the institution is required to be registered with DSIR - Revenue's
contention that a certificate of registration from DSIR is required, is not sustainable not the case of Revenue that institution is not registered with DSIR - appellant fulfilled
the condition of the notification that essentiality certificate was obtained from the
Registrar of the University to clear the impugned goods - authenticity of the certificate
not challenged in any manner and therefore the certificate from the Registrar of the
University is acceptable - No reason to interfere with the order of the Commissioner
(Appeals).
2014-TIOL-478-CESTAT -DEL
M/s Ultratech Cement Ltd Vs CCE (Dated: November 18, 2013)
Facts of the case –
The Appellants are manufacturers of cement and cement clinker.
The sales are through depots. The goods are first transported to depots from where
the same are sold to customers. While the Department had allowed the CENVAT credit
of service tax paid on GTA service availed for transportation from the factory up to the
depot, the CENVAT credit of service tax paid for transportation from the depots to the
customers' premises was disallowed on the ground that the GTA service availed for
transportation up to the 'place of removal' only can be treated as input service and in
respect of the goods sold from the depot, it is the depot, which is the 'place of
removal'.