LATEST IN JUDICIARY
BASIC
SAIL (2012) SC
Fact- SAIL mines ores from the mine. The ore was crushed, grinded, washed and concentrated with
the object of removing foreign particles. The Department contended that the process carried out
amounts to manufacture.
Decision - Since no new article comes into process by the activity carried out, there is no
manufacture.
OSNAR CHEMICALS PVT LTD (2012) SC
Mixing Polymer and additives to heated bitumen – merely result in improvement in quality – no
change in characteristics of bitumen – hence not manufacture
SIDHARTH OPTICAL DISC PVT LTD 2013 (DEL)
Intermediate product to be eligible must be goods i.e. a complete product with commercial identity
and capable of being sold to customer. Blank CD/DVD/VCD does not come into existence as excisable
goods in the course of manufacture of pre recorded audio CD/VCD/DVD if both process
(manufacturing of CD and recording) are carried out simultaneously.
CENTRAL EXCISE RULES, 2002
CCEX. V.PRIYADARSHINI CEMENTS LTD. [2013] 292ELT 30(A.P)
In case of default in payment of duty by the due date, interest as per rule 8(3) will be levied rate of
interest to be charged will be determined as per equivalent to rate prevailing on the date of default
SEYA INDUSTRIES LTD [2013] 295 ELT 525 (BOM)
Mere change in the name of the company cannot possibly affect the post of the Central Excise dues or
the liability of the company to pay these dues.
There is no basis or justification to revoke the Central Excise Registration merely because the name of
the company has been changed.
FLEX ENGG. LTD 2012 (SC) [MFR & INPUT FOR CENVAT CREDIT]
Facts:
Assesee is a Mfr of packaging machines called F & S machines. These machines are customer specific
and are made as per the specifications given by the customer. The agreement contains a clause that
the inspection/trial should take place at the premises of the assessee in the presence of the
customers' engineers. After the customers satisfaction only the goods will be dispatched.
Issues
Whether F & S machines Mfr is complete only after testing & readjusting as per the requirements of
customer or before testing. Whether flexible laminated plastic film & poly paper used for testing etc
are inputs for the purpose of availing Cenvat Credit
Decision:
The machines become marketable only when they are accepted by the customer after testing. Taxable
event of Mfr is complete only after the goods pass the test of marketability. Goods become chargeable
only after that. Hence the Mfr is complete only after the successful completion of testing.
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VIRAT CRANE AGRI TECH LTD 2013(SC)
For remission of duty on account destruction of goods unfit for consumption, the assessee has to
produce evidence to satisfy CEO to allow their claim of remission. The assessee will not be entitled for
to remission of duty for destruction of pulp for which neither intimation was given nor analytical
report by them before CEO
CCEX V. HARISH SILK INDUSTRIES 2013(GUJ)
Requirement of sec 11AC are to be satisfied for imposition of penalty under rule 25
CCEX V. BALAJI TRADING COMPANY 2013(DEL)
Penalty under rule 25 cannot be imposed on the purchaser of goods even if they are related concern
of the manufacturer
CCEX V. VIJAYA STEELS PVT LTD (KAR) 2014
Offence alleged against the director of a company that they were not diligent in seeing that cheques
issued towards payment of excise duty were encashed or not, is not an offence that fall under rule 26
therefore residuary penalties of 5,000 shall be levied on director
VALUATION
TATA MOTORS LTD 2012 (BOM) READ WITH MARUTI SUZUKI INDIA LTD 2013(SC)
Pre –deleivery inspection and after sales service charges provided by the dealer is a part of TV
only if they are charged by car manufacturer from dealer
INTERNATIONAL AUTO LTD. 2010 SC
Price variation clause leading to increase in price- increased element recovered from buyer
subsequently is part of TV
VICTORY ELECTRICALS LTD 2013(TRI)
Liquidated damages deducted by buyer as compensation for delay in supply of goods by assessee
shall be allowed as deduction (reduced from TV)
J.J. CONFECTIONERY 2007 TRI
Liquidated damages received by manufacturer is in the nature of penalty and is not a part of
transaction value
ELECTRONICS AND CONTROL POWER SYSTEM 2011 SC
Battery is essential bought item for UPSS system hence is a part of TV
SUPER SYNOTEX (INDIA) LTD 2104(SC): while computing transaction value as per sec 4 the
assessee will not be entitled for deduction of amount of sales tax collected from the customer but
retained with himself under incentive scheme provided by government. The same shall form part
of AV of goods. Deduction of only that amount of sales tax shall be available that is actually paid to
the state government
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CENVAT CREDIT RULES, 2004
HEG LTD 2012 (CHATTISGARH) HC
Electricity generated is partially used in factory and partially is sold out: Credit admissible
KCP LTD V CCEx 2013 (SC)
Assessee would not be entitled to CENVAT credit of duty paid on machinery purchased from other
manufacturers when such machinery had not even been unpacked by assessee in his own factory and
it had been transported in the exact condition along with the machinery manufactured by himself to
foreign country
KAY KAY INDUSTRIES 2013(SC)
CCr cannot be denied on the ground that the supplier of input has not discharged full duty liability
covered in the invoice.
JUHI ALLOY LTD 2014 (ALL)
Where assessee had purchased inputs from first stage dealer and had taken all reasonable steps to
ensure that duty was paid on inputs, it would be impracticable to require assessee to go beyond
records of first stage dealer and verify whether original manufacturer had paid duty on such goods
Thus CENVAT credit would be admissible to him.
PRAYAGRAJ DYEING AND PRINTING MILLS 2013(GUJ)
Cenvat credit cannot be denied on goods purchased from manufacturer if such manufacturer who was
registered with the Central Excises department is not traceable. If goods were received in factory
along with duty paying document and the payment is made to supplier by cheque, validity of credit so
taken cannot be denied. Merely because manufacturer could not be found, invoices issued by them
cannot be treated as fake or fraudulent.
PANCHMUKHI PROCESSOR PVT LTD 2013(GUJ)
Disallowance of CENVAT credit cannot be made to assessee where supplier firms were either not
found or their addresses were incomplete, as payment was by account payee cheques and the
supplier firms had also filed income tax returns. Also the assessee had maintained a lot register.
It was a fact based matter to be determined on basis of material available. Appeal was not
maintainable in High court as no question of law arose.
FLEX ENGINEERING LTD 2012 (SC)
Process of manufacturing is completed after testing, therefore goods used in testing is also eligible for
CCr
HINDUSTAN ZINC LTD 2013 (RAJ)
Where input has become waste in or in relation to manufacture of final product due to natural cause
of atmospheric condition, then the duty paid on such input is eligible for CCr
SAMTEL COLOUR LTD 2013 (ALL)
Duty paid on paint and building material for making the production hall as dust free and fire
retardant, as dust free hall was essential for final product “Colour picture tube” will be considered as
incidental and ancillary requirement for the manufacture of final product and therefore eligible for
CCr
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SINTEX INDUSTRIES LTD 2013 (GUJ)
Two different unit of a manufacturer, adjoining each other, set up within a common boundary wall,
having a common PAN but different excise registration, shall be treated as two different factories.
CCr can be availed on eligible input utilized for the generation of electricity only to the extent the
same is utilized in the unit registered for that purpose but not to the extent it was supplied to other
unit having different registration.
INDUCTOTHERM (I) PVT.LTD 2012 (GUJ)
CCr cannot be used for payment of amount specified u/s 11D
KHURANA WOLLON MILLS 2013(P&H)
There is no rule for reversal of credit taken on input which is destroyed. Credit is required to be
reversed only if input is used in exempted goods. Hence, if input are destroyed then reversal of credit
not required
CLASSIFICATION OF GOODS
HINDUSTAN LEVER LTD 2013 (SC)
Liril active shower gel shall be classified under the heading “soap and other various substance” not
under the heading “beauty or other preparation
CIENS LABORATORIES 2013 (SC)
Moisturex cream consisting of pharmaceutical ingredients that have therapeutic or prophylactic or
curative properties, even if sold without a medical prescription, is used for the cure of certain skin
disesase would be classified under pharmaceutical not under the heading beauty treatment
CONNAUGHT PLAZA RESTAURANT - 2012(SC)
Facts: The assessee is manufacturing and selling at Mc Donalds a product called SOFT SERVE.
Revenue classified it as ice cream under Heading 21.05 But assessee classified it as other dairy
product under heading 0404
Ice cream was not defined under CETA or chapter notes, but defined under Prevention of Food
Adulteration Act as containing not less than 10% of milk. The milk fat content in soft serve is only 5%.
Decision: The product is known in the trade parlance as ice cream. The common man is not expected
to be aware of intricate details such as milk content in ice cream. The common man understands this
only as ice cream. The definition in other Acts is irrelevant.
Hence soft serve shall be classified as ice cream under chapter 21.05
WOCKHARDT LIFE SCIENCE LTD. 2012 (SC)
Issue: Whether the products providence Iodine cleansing Solution USP and Work dine Surgical scrub
were medicated detergents U/Chapter Heading 3003 or detergents under residual entry U/Chapter
Heading 3402.90.
Held: The products as above are to be classified as medicaments and not as detergents.
Reasons: The products are antiseptic and used by surgeons for cleaning or de-genning their hands
and scrubbing surface of skin of patient before operation. Products are called medicaments when they
have prophylactic (preventive) or therapeutic (curative) use.
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The products in question are primarily used for external treatment of the human beings for the
purpose of the prevention of the disease. Since these are used by surgeons for scrubbing the surface
of the skin of the patient. These have to be classified as medicated detergents under chapter heading
3003.
SALORA INTERNATIONAL LTD. 2012 (SC)
T.V. sets were disassembled into parts and supplied the parts with "Serial numbers to sister units
of the assessee.
Issues: Whether they have to classified as parts of Television Receivers Under Tariff Heading 8529 or
to be classified as Television Receivers falling under 8528 of the Tariff Act. Held that the parts have to
be classified as Television Receivers under Heading No. 8528 as the assessee supplied Television
receivers in parts and not parts of Television receives.
Note: As per Rule 2(a) of Rules for interpretation goods supplied in an unassembled form shall be
classified as assembled goods
SSI
CCEx v. SPECIAL BOARD MANUFACTURING COMPANY 2014(GUJ)
Benefit of separate notification shall be available to assessee where initially assessee was constituted
as partnership firm and after few month businesses was taken over as a proprietor. Both would be
treated as distinct legal entities, thus, it would not be said that benefit had been taken by the same
assessee under both notification sole proprietor is separately eligible for SSI exemption
CCEx . v. XENON 2013(JHAR)
In case is any dummy company is created to claim the benefit of SSI, excise duty can be demanded and
penalty can be levied on original company not on dummy company
DEMAND AND REFUND
SALASAR DYEING & PRINTING MILLS (P) LTD. V. CCE [2013] 290 ELT 322 (GUJ)
Evasion cases- Full 5 year available from relevant date even if department come to know of it:
In case of fraud, collusion, etc. leading to evasion of payment of duty, extended period can be invoked
upto 5 year prior to date of service of notice i.e. period of 5 year shall be computed from relevant date
Assessee argument that when department come to know of such fraud, etc., the period of limitation
available would be 1 year from date of such knowledge was invalid. Hence, notice issued after 1 year
from date of knowledge of fraud, etc. but within 5 year from relevant date was valid. –
CCE V. AYYAPPAN TEXTILES LTD. [2013] 294 ELT117(SC)
Excise Department must draw samples and test them prior to raising demand based on their
grade/quality
If department, on inspection of a manufacturing premises on a particular day, detects that
goods/cotton yarn of a particular specification /high count are being manufactured, department is
entitled in law to presume that (until manufacturer proves contrary) goods of same specification are
continued to be manufactured.
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

However, said principle can be applied only when samples are drawn to draw an initial
presumption.
Thus, where department had neither:
(a) Drawn any samples; nor
(b) Examined contents of file/registers including statements of employees,
To ascertain fact whether assessee actually manufactured yarn of a higher count than declared count
during period covered by such file, demand of duty treating production as that of higher count could
not be sustained.
CCE V. ITC LTD.- 2013 (295) E.L.T. A64(SC)
No extended period, if all facts within knowledge of Department
Where –
 There has been correspondence between assessee and Department,
 Goods were inspected and facts were known to Department
 There were judgments in favour of assessee prior to Supreme Court judgment making assessee
liable to pay duty, and
 Assessee had been duly paying duty for subsequent periods after judgment of Supreme Court
then, there was no suppression/fraud with intent to evade duty and extended period was not
invocable. Further, department was unable to discharge its burden to prove that assessee had
intent to evade payment of duty.
UNIWORTH TEXTILES LTD. V. CCE [2013] (SC)
For invocation of extended period of limitation, there must be deliberate default on part of assessee
and burden of proving same lies on Department and assessee cannot be asked to substantiate his
bone fide conduct
HINDUSTAN INSECTICIDES LTD 2013 (DEL)
In case of retrospective price rise, assessee is liable to pay differential duty thereon along with
interest and period of limitation applicable under sec 11A for principal amount will apply for interest
amount also
CCE V. GUJARAT NARMADA FERTILIZERS CO. LTD [2012](GUJ)
Voluntary payment of time –barred duty – Interest not payable even if duty paid
If there is no evasion case, the Department cannot issue notice beyond 1-year period of limitation. In
such case, if assessee pays duty voluntarily for period prior to 1- year then, since such duty itself was
no recoverable under section 11A, department cannot seek payment of interest under section 11A for
example, in 2013 Mr. Ram came to know of short-payment and pays duty relation to year 2010-11
(though there was no case of evasion). Since there was no evasion, extended period of imitation was
not invokable by Department. Mr. Ram has paid time-barred duty, but, he cannot be asked to pay
interest on delayed payment of time-barred duty.
INTERNATIONAL CONVEYORS LTD. 2014 SC
Doctrine of unjust enrichment is not applicable and refund can not be denied where
 Due efforts were made to find out whether amount of duty had been passed over to
purchaser; and
 Even purchaser had admitted fact that the amount of duty had not been recovered from
them, and said finding is not challenged.
In case of refund due to assessee, for refunding the amount the department can not ask the assessee
to give an undertaking that refund amount should be paid back on outcome of any other case if the
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same is decided in favour of the department
APPEALS AND REVISION
KANYAKA PARAMESWARI ENGG. LTD. ALSO RANBAXY LABORATORIES LTD. 2011 (SC)
Interest on delayed refund U/S 11 BB is payable after 3 months of receiving the refund application
and not on the date of deposit of duty.
SATISH B AGGARWAL 2013 GUJ
Delay in filing appeal can be condoned if the assessee has reasonable cause for failure of not filing the
appeal in time limit. In this case assessee was under a bonafide belief that he was not required to
reply the SCN, since the other party to whom the SCN was issued on the same grounds, has replied the
SCN, and such bonafide belief resulted in delay in filing the appeal, the said delay can be condoned
GUWAHATI CARBOB LTD 2012 (SC)
Valuation & classification matter- direct appeal to supreme court- no appeal to high court- high court
can not entertain the writ petition
BISHWANATH BHATTACHARYA 2014(SC)
It is not permissible for the appellant to raise certain grounds directly the Supreme Court and which
were not taken in writ petition before the High Court. An appellant can not seek re-appreciation of
evidence without an appropriate pleading in writ petition. It was more so as high court in its writ
jurisdiction normally does not re-appreciate evidence
SURYA AIR PRODUCTS 2013(P&H)
Order passed by tribunal on an application for waiver of pre deposit is an appealable order before
High Court
ADVANCE RULING
COLUMBIA SPORTS WEAR CO. 2012(SC)
The ruling pronounced by advance ruling authority can be challenged in High Court or Supreme Court
through writ petition
GSPL INDIA TRANSCO LTD 2012 (GUJ)
Application can be filed by subsidiary company even if same matter of holding company is pending
before CESTAT as both companies have separate legal entity
SETTLEMENT COMMISSION
EXOTICA GLOBAL PVT LTD 2013(CAL)
Recovery proceedings are not the adjudicating proceedings and pendency of recovery proceeding do
not mean that adjudication proceeding are pending. Hence, in respect of recovery proceedings
application for settlement cannot be made
M/S MAHAHAR AUDIOTRONICS PVT LTD 2010 MUMHC
SAURASHTRA CEMENT LTD 2013 GUJ HC
Issue: Whether settlement order can be challenged in writ petition?
Ans: Yes
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CUSTOM
GROZ-BECKERT ASIA PVT LTD 2014(DEL)
Drawback would be available u/s 74 of custom act, 1962 in a case where imported goods are just
repacked and then re exported. Such repacking can not amounts to any ‘process’ or ‘operation’ on the
goods
CCE V. KANAK METAL INDUSTRIES (2013) SC
Fob value may be higher than Indian market value of exported goods; export incentive shall be
available on the basis of FOB value not on the basis of Indian market price.
PRASHANT J MEHTA v. SENIOR INTELLIGENCE OFFICER 2013(KER)
In accordance with amendment made by finance act, 2013 regarding an offence punishable u/s 135
relating to import or export of any goods, not declared in accordance with the provision of the act and
the market price of which exceeds 1 crore shall be non bailable, transaction carried out both before
and after the date of amendment by the accused person shall be taken into consideration for
ascertaining the value of 1 crore.
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