CESTAT RULING (CENTRAL EXCISE)...to the Notification No. 10/2008 dt. 1.3.2008 to the definition of input services w.e.f 1.4.2008, a radical change was introduced expanding the clearances

CESTAT RULING (CENTRAL EXCISE)

2016-TIOL-1203-CESTAT-MAD

M/s Srinivasa Hair Industries Vs CCE (Dated: March 2, 2016) Central Excise - Refund - It is submission of the appellant that the CENVAT credit remaining unutilized may be refunded under Rule 5 of the CENVAT Credit Rules, 2004 since the credit so remaining has no possibility of utilization in future, because of the closure of the unit.

Also see analysis of the order

2016-TIOL-1202-CESTAT-DEL

M/s S Kumars Ltd Vs CCE (Dated: February 15, 2016)

CX - Penalty - Assessee filed application to avail Compounded Levy Scheme and during pendency of decision by Commissioner, they were paying duty on provisional basis in terms of sub-rule (2) of Rule 96 ZNA - Later, when application for scheme was rejected by Commissioner, amount already paid was adjusted against normal duty liability in terms of Section 3 and they were granted refund of excess payment - When application of assessee for scheme was rejected, it is clear that assessees were not governed by provisio ns of Scheme - Invoking one of provisions of Scheme for imposing penalty is thus legally not sustainable - Impugned order is not sustainable and set aside: CESTAT

2016-TIOL-1197-CESTAT-CHD

M/s Rudra Ventures Pvt Ltd Vs CCE (Dated: March 22, 2016) CX - Charge of clandestine removal has been alleged against assessee on premises that cigarettes in brand name of assessee were recovered from one M/s Shardha Traders but Sh. Ajay Adwani, proprietor of Sharddha Traders never named assessee that they have procured said goods from assessee - Only reason to implicate assessee is statement of Sh. Ravi Singhal and it has been presumed by revenue that said goods have been manufactured by assessee and cleared clandestinely - As assessee unit was in physical control of CE Department and nothing incriminating was recovered from assessee and officer incharge of factory of assessee were never investigated, charge of clandestine removal of goods is not sustainable - In absence of evidences namely procurement of raw material, manufacturing process, flow back of money, mode of transportation, said allegation is not sustainable: CESTAT


M/s Tirupati Plastomatics Pvt Ltd Vs CCE (Dated: January 15, 2016)

CX - Assessee engaged in manufacture of PVC coated wire & cables and they are one of buyers of PVC compound from KPIL - Cenvat credit denied to assessee on basis of investigations conducted at selle r's site and statements given by Director of KPIL- A list of buyers was shown to Director, who stated that he never specifically cleared any

goods to them - In absence of clear evidence to effect that assessee is one of persons listed and as confirmed in statement, main basis of case stands un-substantiated - Modus operandi as alleged is that though coating of wire is done using both virgin PVC compound and re -processed PVC compound, attempts were made to show huge receipt and duty paid virgin of PVC compound without actually receipt and usage - Though such modus operandi was alleged, further verification of accounting and raw materials consumption was not made at assessee's end - Assessee have relied on GR forms with rubber stamp of Rajasthan State Check -Post, amount paid for PVC compound by A/c Payee, Cheque/DD and issue of C -Form for ST for suppliers during impugned period - No verification has been made in assessee's premises regarding due accounting or receipt of goods - Denial of credit, as upheld in impugned order, is not sustainable: CESTAT

2016-TIOL-1194-CESTAT-HYD

M/s Siemens Ltd Vs CC & CE (Dated: January 25, 2016) Central Excise - CENVAT Credit - Input Services - Nexus - Credit denied on input services namely fabrication services, CHA, rent-a-cab, air travel & train travel services, pest control and maintenance of immovable property, clearing agent service and training services to employees - Appellant submits that the period involved is prior to 1.4.2011 when the definition of ‘input services' had a wide ambit as it included ‘all the activities relating to business' - It is seen that in respect of the fabrication service, credit was denied on the ground that the services were availed outside the factory premises, which is not acceptable - By bringing in the amendment to the Notification No. 10/2008 dt. 1.3.2008 to the definition of input services w.e.f 1.4.2008, a ra dical change was introduced expanding the clearances of final products upto the place of removal - Moreover, precedents have held that in the case of input services there is no restriction that it should be received in factory premises - Hence, credit is a dmissible on fabrication service and also on all the other input services in question in view of a number of precedents allowing the credit on the services - Hence, impugned order set aside - Appeal allowed. [paras 2, 3, 4, 6, 7, 9]


M/s Tyco Sanmar Ltd Vs CCE (Dated: November 6, 2015) Central Excise - Order in Appeal - Sec 35A(4) of the Central Excise Act 1944 requires the appellate authority to ensure that the order he passes goes through three phases - The first phase should see the points for determination; the second phase is to decide on the issue framed; stating the reason why he has reached to a conclusion - Unless these three phases are followed an order of the authority fails to receive judicial scrutiny - impugned order in the instant case suffers from legal infirmity for no issues framed nor cogent reason stated - Apex Court in the case of JCIT, Surat Vs. Saheli Leasing & Industries Ltd., laid down the manner how judicial and quasi judicial orders are to be written - impugned order set aside and remanded to Commissioner (Appeals) for denovo consideration.


M/s Drytech Processes India Pvt Ltd Vs CCE & ST (Dated: Jume 23, 2015)

CX - Refund - Assessee entered into Contract Manufacture Agreement with principal manufacturer by which goods manufactured by assessee were to be sent directly to distribution centers of principal manufacturer - Duty required to be paid on price of Rs. 65 per sachet, less abatement of 35% whereas, assessee paid duty by considering MRP as Rs. 310 per sachet less abatement - Distribution centers of Principal Manufacturer charged correct price from retailers and no excess duty was recovered from final customers - Assessee have also submitted along with refund claim, a

detailed chart showing comparison of invoices raised by assessee and distribution centers of Principal Manufacturer - Observations in impugned order that no evidence of stock transfer invoices have been provided by assessee is not appreciated, in view of stock transfer invoices enclosed to appeal paper book and also placed along with refund claim - Refund claim is not hit by doctrine of unjust enrichment, as excess amount of duty has not been passed on by assessee to any other person - Therefore, impugned order is set aside: CESTAT


Motor Industries Co Ltd Vs CCE (Dated: April 4, 2016) CX - Issue involved is reversal of Cenvat credit on capital goods when they were removed after use for some time - It will be unjust and injudicious to subject the assessee to penalty, particularly when assessee cleared the capital goods and paid duty at depreciated value - As goods were cleared to its sister unit and duty paid would have been available to sister unit as credit, there could not have been any malafide on part of assessee - Indeed, in assessee's own case, CESTAT referred to earlier waived penalty altogether - Accordingly, no penalty is warranted - Impugned order set aside and matter remanded to Original Adjudicating Authority for arriving at amount of cenvat credit liable to be reversed in accordance with principle laid down by CBEC vide its circular No. 643/34/2002-EX, which the assessee will have to pay with applicable interest, if not already paid: CESTAT

2016-TIOL-1186-CESTAT-MUM

Nssl Ltd Vs CCE & C (Dated: December 1, 2015)

CX - Refund - Appellant is engaged in the manufacture of Industrial Valves - while supplying goods to M/s BPCL, in the sale invoice the price was wrongly fed as Rs.3,64,495/- instead of Rs.36,495/- per unit - excess duty paid paid was claimed as refund but same was rejected by lower authorities on the ground that description does not tally between the invoice and the purchase order - appeal to CESTAT.

Held: Facts that the price was charged on the higher side and excise duty paid thereon is not under dispute - M/s BPCL has issued a letter mentioning that the actual price for the item is Rs.36,495/- but appellant had wrongly invoiced at Rs.3,64,495/- and correspondingly duty was charged on higher side; wrong entry was corrected and payment was made for actual amount - it is clearly mentioned that the payment of only Rs.6,76,732/- was made against the value shown in the invoice of Rs.14,15,748/- - with this evidence all the doubts stand cleared that the appellant has charged higher amount inadvertently and accordingly excess duty was paid - no reason why the refund should not be granted of the excess paid duty - order set aside and appeal allowed: CESTAT [para 5]


Jindal Steel And Power Ltd Vs CCE & ST (Dated: November 2, 2015)

CX - Refund - Assessee had supplied iron and steel products pursuant to purchase order placed by buyer M/s Somani Ispat - Due to error in SAP package, said invoice has reflected excise duty of Rs. 4,30,779/- as against actual liability of Rs. 82,050/- - Upon realization of mistake regarding excess payment of duty, assessee had lodged refund claim - CA has also certified that excess amount of duty has not been paid by buyer to assessee - Incidence of excess paid excise duty has not been passed on by assessee to its buyer and excess paid excise duty has been borne all along by assessee, for which the refund claim cannot be rejected on ground of doctrine of unjust enrichment: CESTAT


CCE Vs Golden Tobacco Mfg Co Pvt Ltd (Dated: November 16, 2015) CX - Abatement under Notfn 11/2011-CE (NT) - Assessee engaged in manufacture of 'Khaini' - Machines installed in their factory were shut down during period 14.09.2011 to 30.09.2011 - Abatement claim for said period was rejected by Department on ground that production activity was stopped on 13.09.2011 and clearances were made on 17.09.2011 - Assessee had removed only those of goods which were already manufactured by date of these lying of goods and were lying in balance - Except the fact of delay of two days in removing goods, assessee has fulfilled requirement of notification to entitle him abatement of duty - Non-filing of intimation with Department within time is a procedural lapse, for which substantive right conferred in statute cannot be whittled down: CESTAT


Eicher Tractors Vs CCE (Dated: March 9, 2016) CX - Appeal filed against O-I-O in terms of which CENVAT Credit demand was confirmed along with interest and penalties on ground that assessee had not reversed CENVAT Credit attributable to stock of raw material, inputs contained in work -in-progress and contained in final product in stock, when final product namely, tractors became fully exempt from CE duty - Issue is no longer res integra having been decided in favour of assessee vide Madras High Court in case of Tractor and Farm Equipment Ltd. 2014-TIOL-2307-HC-MAD-CX - A manufacturer obtains credit for excise duty paid on raw material to be used by him in production of an excisable product immediately it makes requisite declaration and obtains an acknowledgement thereof - It is entitled to use credit at any time thereafter when making payment of excise duty on excisable product - Impugned order set aside: CESTAT


M/s Sanmar Foundries Ltd Vs CCE (Dated: April 25, 2016) Central Excise - CENVAT Credit on input services - Eligibility of Maintenance or repair or helicopter, Rent a cab, Management consultancy Service - Rule 2(l) of the CENVAT Credit Rules, 2004



Sirmaxo Chemicals Pvt Ltd Vs CCE (Dated: April 6, 2016)

CX - Refund - Rule 5 of CCR, 2004 - Whether refund is admissible to the a ppellant against supply of final product to SEZ - lower authorities rejected the refund claim of the accumulated CENVAT credit on the ground that supplies made to SEZ is a deemed export and not a physical export - appeal to CESTAT.


M/s Mahindra Sona Ltd Vs CCE (Dated: April 27, 2016)

CX - CENVAT credit availed on services used exclusively in respect of exempted goods - in the self-assessment memorandum, appellant has declared that the credit has been taken correctly as per CCR, 2004 - this declaration is incorrect and which fact is undisputed - in the era of self assessment, the onus of taking credit correctly has been put on the appellant - extended period rightly invoked - Appeal dismissed: CESTAT [para 4, 5]



CCE Vs Bharat Forge Ltd (Dated: April 25, 2016) CX - Appellant installing a machine in their plant for doing job work for their clients - For this purpose, appellant were manufacturing dies in their premises and using the same capital goods - SCN issued for recovery of CENVAT credit availed on the inputs used for the manufacture of dies and for the purpose of job work on the ground that job work activities were exempted under notification 214/86-CE - Credit denied in four cases and hence appeal to CESTAT - in one case Revenue in appeal against dropping of demand by Commissioner(A). Held: Decision of Larger Bench in the case of Sterlite Industries - 2005-TIOL-305-CESTAT -MUM-LB (which is upheld by Bombay High Court) holding that the provision of rule 57C of CER, 1944 would not be attracted to a job worker where the principal manufacturer undertakes to pay duty is squarely applicable in the facts of the case - Appeals of assessee are allowed and that by Revenue is dismissed: CESTAT [para 4, 5]


M/s ITC Ltd Vs CCE & C (Dated: March 11, 2016) CX - Appellant had given machineries on hire to MR Brown Bakers (I) Pvt. Ltd. (MRBBIPL) to manufacture Biscuits - On termination of contract, as per appellant's directions, the capital goods were dispatched to M/s. Utsav Food Products and M/s. Disha Foods Pvt. Ltd. - however, while clearing the goods MRBBIPL did not pay excise duty/reverse credit - capital goods were seized from the premises of M/s. Utsav Food Products and M/s Disha Food Products Pvt. Ltd. and, thereafter, M/s. MRBBIPL paid entire duty along with interest on 12.12.2007 - SCN issued on 08.04.2009 and demand confirmed/appropriated along with interest - original authority allowing redemption of seized goods on payment of redemption fine of Rs.13 lakhs - appeal rejected by Commissioner (A), therefore, appellant before CESTAT.


Rathi Dye Chem Pvt Ltd Vs CCE (Dated: April 25, 2016) CX - Whether Clearing & Forwarding agent service, Insurance service on finished goods in transit and Maintenance & Repair service of vehicles an Input service for availment of CENVAT credit.


Vasudha Chemicals Pvt Ltd Vs CCE (Dated: April 12, 2016) CX - Capital goods - In 2004-05, Appellant availed cenvat credit to the tune of 50% of Rs.1,04,828/- and remaining 50% was capitalized - appellant claimed the depreciation on the total assessable value and 50% of excise duty, i.e. Rs. 1,04,828/- - In the year 2005-06, the appellant reduced an amount of Rs.1,04,828/- from the capital account

and availed cenvat credit of the said amount as remaining 50% - SCN issued for denying entire credit - Commissioner (A) denying credit of 50% - appeal to CESTAT. Held: Rule 4(4) of CCR, 2004 clearly provides that only part of the value of capital goods which represents the amount of duty on such capital goods, which the assessee claimed as depreciation shall not be allowed as cenvat credit - In the present case, the part of the value, which is claimed as depreciation, is Rs. 16569/- only - Therefore, to this extent the appellant is not entitle for the cenvat credit, however the remaining amount i.e. Rs 88263/- (Rs.104832-16569/-) is eligible as cenvat credit to the appellant for the reason that in respect of this amount of Rs. 88263/-, depreciation was not claimed - appellant is entitled for cenvat credit of Rs. 104828/- in the year 2004-05 and Rs. 88263/- in the year 2005-06 - Appeal partly allowed: CESTAT [para 6.2, 6.3, 7]

2016-TIOL-1167-CESTAT-AHM

M/s Heranba Industries Ltd Vs CCE & ST (Dated: March 15, 2016) CX - Whether on conversion of DTA unit to an 100% EOU, CENVAT Credit lying in balance at time of conversion can be availed and utilized by 100% EOU - Issue is no more res-integra - Assessee had availed CENVAT Credit as per CCR and it does not prohibit domestic unit converted into an 100% EOU, availing and utilizing CENVAT Credit lying in balance - Prior to amendment of Rule 17 of CER, 2002, an 100% EOU was not allowed to pay duty by utilizing cenvat/modvat credit - In view of consistent decisions of Tribunal in Sun Pharmaceuticals Indus. Ltd and GTN Exports Ltd's case , Tribunal do not see any reason to record a different finding - Impugned order is set aside and appeal allowed: CESTAT


M/s Auro Lab Vs CCE (Dated: February 25, 2016) Central Excise - Exemption - The appellant cleared "sutures" to M/s RITES LIMITED, New Delhi, on payment of duty for the 'Cataract Blindness Control Project', financed by the World Bank - Subsequently they filed a refund claim on the ground that they are eligible for exemption under Notification No.108/95-CE dated 28.08.1995 - The claim was rejected in adjudication on the ground that they were ineligible for the exemption inasmuch as the conditions were not satisfied - the rejection was upheld by Commissioner (Appeals); and is now agitated herein.


M/s Monarch Catalyst Pvt Ltd Vs CCE (Dated: April 27, 2016) CX - CENVAT - Event Management was organized to showcase their new plant (within the same factory)and its production capacities to the prospective buyers - same has to be considered as part of sales promotion activity - Credit admissible - Appeal allowed: CESTAT [para 4]



M/s NCR Corporation India Pvt Ltd Vs CCE (Dated: March 9, 2016) Central Excise - Valuation - ATMs were supplied by the appellant to SBI and warranty charges were paid, but not included for assessment to duty - differential duty demand with interest and penalties under (proviso to) Sections 11A(1), Sec 11AB, Sec 11AC of

CEA 1944; and Rule 26 of CER 2002, on the firm as well as individuals adjudicated; and agitated herein.


M/s Jeevan Diesels And Electricals Ltd Vs CCE (Dated: March 4, 2016) Central Excise - Demand - appellants are 100% EOU engaged in the manufacture of Diesel Generating sets with control panels, switchgears, Enclosures and accessories etc. - they are entitled upto 50% of the FOB value of exports into DTA sales; and cleared the goods to their DTA unit during the material period, without payment of duty - Duty demand with interest and penalty under Sec 11A(4) read with Sec 11D, Sec 11AB and Sec 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002 confirmed in adjudication; amounts paid were appropriated; and is agitated herein.


M/s Hindustan Unilever Ltd Vs CCE (Dated: March 11, 2016) Central Excise - CENVAT credit - input credit availed on ‘jumbo bags' sent to the job worker for dispatch of bulk detergent powder back to appellant, denied in adjudication on the ground that it is not an input for the appellant; and is agitated herein.


Hinduja Foundries Ltd Vs CCE (Dated: March 7, 2016) Central Excise - CENVAT credit - input services credit (professional fees, and internet tele-communication service) availed on the basis of debit notes - same denied in adjudication, demand for its recovery with interest and penalty confirmed; upheld by Commissioner (Appeals), and agitated herein.


Primo Pick N Pack Ltd Vs CCE & ST (Dated: August 3, 2015) CX - Assessee engaged in manufacture of HDPE woven bags - Machine was removed from facto ry to a nearby premises for finishing of manufacturing process - Process in these premises was carried out by assessee themselves - Machine was used by assessee for production of final products - Thus, activity of assessee in using machine (capital goods) can be said to be part of its manufacturing activities of final products in its registered factory premises - There is no justification for denying credit - As there is no suppression of facts on part of assessee as he intimated the department about remova l of machine by proper documents, cenvat credit cannot be denied to assessee: CESTAT


M/s Rinox Engineering Vs CCE (Dated: March 15, 2016) CX - Cum duty price - SCN was issued to both assessees for demand of duty on scrap due to discrepancy in documents and goods were not covering challans sought to be confiscated and for imposition of penalty on both assessees - Assessee is only praying that benefit of cum duty price would be given - As it is not coming from records that

assessee has charged any amount over and above sale price, assessee is entitled for cum duty benefit - Therefore, assessee be given benefit of cum duty price which shall be calculated by adjudicating authority and benefit of same shall be given to assessee - Goods which were found without cover on invoice/challans during investigation have been exported and on verification report has obtained from revenue which also certified that goods in question were ultimately exported - There was not mala -fide intention of assessee to de-fraud the revenue - Goods are not liable for confiscation - Therefore, penalty on both assessees under rule 25 & 26 are not imposable: CESTAT


SAIL Ltd Vs CCE & ST (Dated: March 31, 2016) CX - ROA - Assessee filed restoration of appeal application seeking recall of CESTAT order, on ground that COD application although available on date of dismissal of appeal, was not brought to notice of CESTAT and is now being submitted with ROA application - It is held that CESTAT had granted liberty to assessee to apply for restoration of appeal on production of necessary clearance from COD and had not set any time limit for doing so - Thus, appeal should be restored as clearance from COD has been produced - On perusal of COD clearances, it is observed that appeal cannot be ordered to be restored except for penalty aspect - Restoration of appeal allowed - Pre -deposit of penalty waived and its recovery stayed during pendency of appeal: CESTAT [Para 1, 4]

2016-TIOL-1144-CESTAT-KOL

M/s Sail Vs CCE (Dated: February 15, 2016)

CX – Payment of interest under Section 11AA of CEA,1944 – Whether interest under Section 11AA can be recovered from assessee, with respect to a demand on Pitch Creosote Mixture (PCM) for period 01.03.86 to 31.12.87 paid by assessee on 04.03.2004, after the issue was partly decided against them as per Apex Court's order – Neither the duty is determined under Section 11A(2) of CEA, 1944 nor assessee has given any such undertaking - Inspite of that assessee deposited the entire disputed duty decided by Supreme Court within three months from case was decided by Apex Court - Even if it is presumed that duty was determined under Section 11A(2), which is factually incorrect, still the revised duty determined by Supreme Court stands paid within three months of such determination as per provisions of Section 11AA(1), r/w Explanation-I to this Section - Appeal allowed: CESTAT


M/s Saket Pvc Pipes Industries Pvt Ltd Vs CCE (Dated: November 06, 2015) CX - Clandestine removal - Assessee contends that shortages in stock of inputs/finished goods were due to non-writing of relevant registers as their dealing assistant was sick, secondly, stock taking was on eye -estimation basis and not on actual basis - Physica l stock-taking was conducted in presence of representative of assessee's company and no objection was raised about process of phyysical stock-taking - Regarding claim of non-completion of relevant stock register by entering earlier days production, authorities below had observed that assessee was making such claim without supportive evidence - Demand on shortages and penalty on assessee's company are justified - Assessee is entitled to pay 25% of penalty imposed under section 11AC of CEA, 1944 - In absence of direct evidence against Director Shri Vijay Kumar Jalan, on his involvement relating to discrepancies in stock noticed, personal penalty imposed on Director is set aside: CESTAT

2016-TIOL-1140-CESTAT-ALL

M/s Raman Ispat Pvt Ltd Vs CCE & ST (Dated: February 11, 2016) CX - Shortage of stock - Assessee engaged in manufacture of MS Ingots - Contention of assessee that they record production on estimated weight basis and actual weighment of ingots is done only at time of removal, have not been found to be untrue - Valuation method adopted by inspection team, there is bound to be variation of stocks value determined with book records - In case of MS Ingots, variation in physical quantity of MS Ingots and book records is about 15% and in case of sponge iron, is about 11% - Such variation is considered to be normal - No case of clandestine removal of finished goods and raw material is made out - It is evident from statement recorded on date of inspection that there is no element of malafide in taking of credit - Accordingly, no penalty is imposable for same - Interest is not payable on amount of credit so, reversed which was not utilized before reversal - If it is found that assessee have utilized any part of Cenvat credit, during period, credit was lying available, interest for such user will be payable: CESTAT


CC & CE Vs M/s Krishna Engineering Works (Dated: January 4, 2016) Central Excise - SSI Exemption - Clubbing of Clearances - Commissioner (A) set aside the denial of SSI exemption and the demand raised by clubbing the clearances of the two units, by holding that the clearances/turn over of the two units cannot be clubbed for the purpose of SSI exemption in the facts of the case - Revenue contends that the partners of both the units are common, resources were shared and there were financial transactions - To club the turn -over of two units which were statutorily recognized as two different entities by various Govt. authorities as submitted by appellant, evidences should have been produced by Revenue to show that one or the other of the units is merely a dummy unit with no manufacturing facility or clearance of its own - No such material evidence was brought on record by Revenue to contest the findings of Commissioner (A) but just have repeated the original allegations in the grounds of appeal - Hence, no reason to interfere with impugned order in which Commissioner (A) has examined the every point in detail and has clearly brought out the factual and legal position - Hence, Revenue's appeals are dismissed. [paras 1, 2, 4]


Sagar Industries & Distilleries Pvt Ltd Vs CCE & C (Dated: April 15, 2016) CX - CENVAT - Clearance of goods under under the excise laws of the state is akin to clearance of goods on which exemption notification has been claimed - rectified spirit is an exempt goods and as the appellants do manufacture dutiable goods, CCR does permit assessee to take credit of duty paid on molasses subject to compliance with Rule 6 - CENVAT Credit taken on inputs that have gone into the exempt goods - credit taken on inputs at the time of clearance of rectified spirit is reversed is sufficient compliance - There cannot be discriminatory treatment in the treatment accorded to two manufacturers of the same product merely on the ground that one used captively produced molasses and the other procures from external sources - Orders set aside and appeals allowed: CESTAT [para 10, 11, 13, 14]



Saga Laboratories Vs CCE & ST (Dated: March 9, 2016)

CX - Penalty - Assessee engaged in manufacture of P&P medicines - Apart from clearing goods on payment of duty, they are also supplying goods free to their distributors - Assessee had intimated Department that they are not paying duty on free supply of goods in view of decision of in Vinayaka Mosquito Coil Mfg. Co. 2004-TIOL-827-CESTAT-BANG - There was sufficient reason for assessee to have had bonafide belie f that duty is not payable on free supply of goods in view of said decision of Tribunal - As issue was under dispute and was finally settled only later by decision of Larger Bench in case of Indica Laboratories Pvt. Ltd, 2007-TIOL-713-CESTAT-AHM-LB, imposition of equivalent penalty under Section 11AC is not justified - Penalty is set aside: CESTAT


Nidhi Pipes Ltd Vs CCE (Dated: February 23, 2016) CX - Assessee has taken cenvat credit of education cess shown in invoices - Otherwise, they are entitled to take cenvat credit of duty mentioned in invoices therefore, cenvat credit taken on education cess cannot be denied - On capital goods, assessee is entitled to take cenvat credit 50% of first year and remaining in next year - Therefore, they are entitled to take cenvat credit to tune of 100% of capital goods is at most - Assessee is required to pay interest for intervening period - They have availed cenvat credit on joints/angles/channels as capital goods manufactured and used in acid tank therefore they are entitled to avail cenvat credit as per Rules 2(a) of CCR, 2004 - No demand is sustainable against assessee - Consequently, whatever amount paid by them is required to be refunded to assessee - As duty is not required to be paid by assessee, question of imposing penalty does not arise: CESTAT


Shivam Castings Vs CCE & ST (Dated: April 1, 2016) CX - ROA applications filed by assessee on ground that Tribunal had dismissed appeals for non-prosecution, by way of remand vide order dated 30.11.2015 - Tribunal observed that demand was proposed on ground of clandestine removal of goods and contention of Revenue is that adjudicating authority had not considered the evidences in proper manner - Tribunal held that it is difficult to proceed in matter and therefore, remanded the matter to adjudicating authority to decide afresh on grounds of appeals raised by Revenue, after giving proper opportunity of hearing to assessee - When appeals are not dismissed and have been remanded with all issues open, then, same cannot be restored: CESTAT


Shri Santosh Textile Mills Vs CCE, C & ST (Dated: January 12, 2016)

CX - Assessee being a job worker, received grey fabrics and processing in their factory returned MMF(P) to principal - As per Panchnama dt.26.11.2001, there were only two stentor machines having four chambers in each machine installed in factory, which are capable to manufacture 8 lakhs L.Mtrs per month - During six months in dispute, assessee cleared about 41 lakhs L.Mtrs on payment of duty and allegation of additional clandestine clearance of about 62 lakhs L.Mtrs is impossible - It has given importance on recording of statements of employees of transporter and others - CE Officers visited assessee's factory in 2001 and no initiative was taken for verification of records and electricity consumption - Statements of employees of transporters were recorded in 2006, which are uncorroborative nature - There was shortage of grey fabrics during physical stock verification for which assessee failed to give a

proper reason - Thus, demand of duty on shortage of raw material is justified.

As regards to imposition of penalty on Shri Sandeep Arunkumar Khaitan, Director of assessee company, he has accepted removal of finished goods, therefore, imposition of penalty is warranted but same is reduced - There is no material available of involvement of Shri Mohan Lal Khaitan, and M/s Koral Prints and therefore, imposition of penalty on them are not justified - If goods are not available, confiscation of goods and imposition of redemption fine cannot be warranted - Assessee is entitled to option to pay penalty 25% of duty alongwith entire amount of duty and interest: CESTAT


Matrix Laboratories Ltd Vs CC, CE & ST (Dated: January 12, 2016) Central Excise - CENVAT Credit - MS Items - Appellants are manufacturers of bulk drugs - Credit denied on MS items such as angles, channels, plates etc. on the ground that they do not qualify as capital goods - It is seen that appellant produced Chartered Engineer's certificate which states that impugned items were used for fabrication of technological structures bridges, supporting to equipments like reactors, heat exchangers, pipe line systems etc., - Commissioner (A) observed that even assuming that the items were used for fabrication of structures to support reactors, distillation column, pipe lines, electric cables etc., as they are permanently fixed on the ground or walls, they are not goods anymore and credit is not admissible on such structural items - This view is not acceptable in view of various precedents which held that credit on MS items used as support structures for or in fabrication or manufacture of capital goods/parts/components/spares is admissible and is settled - Courts have taken view that machineries in a factory have to be properly supported and connected - Such structural supports are necessary for machines to make them function without vibration or movement - In ‘ Divis Laboratories Ltd. ' case it was held that MS items used as parts of technological structures which support a reaction vessel or used in particular equipment in the manufacture of bulk drugs is admissible - - However, as regards the credit on impugned items used for making canteen sheds, credit is not admissible as submitted by Revenue since the canteen sheds do not qualify as capital goods as provided in CCR, 2004 - So the amount of impugned item used in making canteen sheds should be quantified and credit attributable to that part is to be reversed - Appellant is directed to approach the Range Superintendent and produce necessary documents pertaining to MS items used in making canteen sheds and to reverse the concerned credit - Credit availed on impugned items used in other than making canteen sheds, is admissible - Appeal disposed of. [paras 1, 2, 4, 5, 7]


Sai Mirra Innopharm Pvt Ltd Vs CCE (Dated: October 29, 2015)

Central Excise - Refund - appellants are the manufacturers of pharmaceutical products, both sales pack as well as samples pack - they cleared the samples pack on payment of duty for distribution to Doctors as physician's samples; assessed on proportionate value based on the value of sales pack - Subsequently, they filed refund claims, on the ground that the valuation of samples distributed free is to be done under Rule 1 read with Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods), 2000 - The claims were rejected in adjudication, on the ground that the assessees had failed to produce any documentary evidence to substantiate the cost of production; the denial of refund was upheld by Commissioner (Appeals), now agitated herein.

Held: The short issue involved in these cases relates to rejection of refund claim of excise duty paid on the physician samples, on the ground that they have failed to produce any documentary evidence to substantiate the cost of production as per CAS4 - The issue stands settled by the LB decision of the Tribunal in the case of Cadila

Pharmaceuticals Ltd., holding that notwithstanding the non-availability of the normal sale price under Section 4(1)(a) of the Act, by reason of the goods being specified under Section 4A(1) making the retail sale price i.e. MRP as its deemed value, the appropriate rule governing the valuation of physician's samples would continue to be Rule 4 - ratio of the Cadila ruling squarely applies to the facts of the present case; no infirmity in the order of the Commissioner (Appeals), which is upheld. [Para 4]


A R Shanmugasundaram Vs CCE (Dated: October 6, 2015)

Central Excise -Clandestine manufacture and removal of acid slurry -Absent evidence of manufacture of large quantities and illicit clearances, electricity consumption, exact quantification of finished goods vis-à-vis raw materials consumed, demand of large amount of duty and penalty merely based on statements and private records without corroborative evidence is wholly unjustified and unsustainable.

The appellants are registered with central excise and being a chemical industry the adjudicating authority ought to give clear cut findings on the manufacture of final products and clandestine clearance. Further it is vital that both the inputs LAB and sulphuric Acid and the final product that is Acid slurry are highly corrosive chemical requires safety for transportation and storage and use. The Revenue tried to make out the entire case based on the SWC records for supply of Linear Alkyl Benzene (LAB), various fictitious firms etc. The onus is on the department to establish the supply of LAB by SWC in various fictitious names pertaining to the appellants. Further more, that mere single seizure of 449 kgs. of acid slurry valued Rs.16000/- during the transit cannot be a proof for the Revenue to arrive conclusion that the huge quantity of Acid slurry was manufactured and cleared clandestinely. The, seizure of acid slurry found at M/s. Baby Star Soap Works, cannot be expanded to the total quantity of 1366.686 M.Ts alleged to have been manufactured by the appellants clandestinely.

It is pertinent to note that in order to manufacture acid slurry, use of second raw material ie., sulphuric acid oleum is equally important to establish illicit manufacture of finished goods of such a huge quantity, as alleged in the findings. Appellants rightly if they have to manufacture such a huge quantity of acid slurry definitely it requires huge storage capacity for LAB, finished product and spent acid, which is a by-product as the same cannot be thrown out without clearing.It is apparently clear from the record that the adjudicating authority has computed the quantity and value purely on mathematical formula and worked out the total quantity of acid slurry by adopting the ratio of raw materials LAB and sulphuric acid purely based on the alleged quantity of LAB received by the appellants from SWC and not supported with any evidence. As regards the payments made to employees of SWC, the appellants claimed that this was paid for the expenses. Butthere is no finding to link the said payments to supply of LAB to the appellants and mere statements that they are related and controlled by the appellants, is not an evidence to hold that appellants revived LAB.

As is noticed that in spite of clear directions by the Tribunal by giving an opportunity to the adjudicating authority to bring out all the evidences including the electricity consumption, adjudicating authority failed to bring out any material evidence in support of supply of LAB by SWC to the appellants, no evidence for such a huge amount of manufacturing activity, or no evidence of any payments for sale of finished goods clandestinely removed and no evidence on removal of spent acid. It is also clear that no attempt has been made to obtain the documents and records from TNPL, which is crucial for sale of LAB instead the LA had only relied on the statements and records of SWC who is a sole selling agent of TNPL.

Thus the entire demand of clandestine removal of acid slurry has been made based on assumption and theoretical calculations by arriving taking notional quantity of LAB. Accordinglythe demand is not sustainable and entire demand is liable to be set aside. However, the confiscation of the seized goods of 449 kgs of Acid slurry and imposition

of fine ordered by the adjudicating authority is upheld. The excise duty demanded in the impugned order is set aside and the appeal is allowed to that extent.As regards the imposition of penalty on the second appellant taking into overall circumstances of the case, and also considering the demand of duty on the main appellant is set aside, the penalty is reduced from Rs.50,00,000 to Rs.2,00,000/-. The appeals are accordingly disposed of. (Para 14-19)


Shivam Textiles Vs CCE & ST (Dated: January 27, 2016)

Central Excise - Temporary enhancement of the attributes or attractiveness of fabric subjecting to Dew Drop Process technique held does not amount to manufacture - Demand of duty on Dew Drop Process for the disputed period August 2000 to December 2000 hence cannot be sustained.

The Dew Drop Process was brought into the country in August 2000 from Korea. On examining the write-up on Dew Drop process and the Certificate submitted by the appellant in the Appeal Memorandum from Textile Technologist it is clear that the process does not have a long lasting effect and does not amount to transformation of the fabrics. It is more in the nature of enhancing the attributes or attractiveness of the fabrics. The effect also gets washed away by 3-4 simple washes.

Under these circumstances, no fault can be found with the Appellants' having a bonafide belief that during the relevant period the process did not amount to manufacture and that they are not liable to Central Excise duty. It is also observed that the Department noticed the alleged duty evasion in January 2001, yet they issued the Show Cause Notice only on 01.04.2005, after almost 4 and 1/2 years. It is also noticed that the South Gujarat Due Drop Processors Association had also taken up the matter with the Minis try of Finance and Ministry of Textiles that the process of Dew Drop does not amount to manufacture and Central Excise duty is not leviable on the same. It is seen that the Ministry in its wisdom, has accepted the merits of the case and has exempted the process of Dew Drop from levy of Central Excise duty. Therefore the demand of Central Excise duty on the process of Dew Drop for the period August 2000 to December 2000 on the Appellant cannot be sustained, the impugned order hence is set aside. The appeal is allowed. (Para 7-9)


Raipur Forging Pvt Ltd Vs CCE (Dated: January 21, 2016)

CX - Case originated with investigation conducted by officers against M/s. Indian Steel and Power Pvt. Ltd., manufacturer of Sponge Iron - Based on certain ledger accounts maintained in pen drive and statement confirming contents of pen drive given by Director of said company, further statements were recorded at assessee's end - On admission by assessee regarding receipt and further manufacture of un-accounted excisable products, investigation stopped - No further verification or evidence was sought to be recovered for clandestine manufacture, firs t of M.S. Ingots and thereafter, from M.S. Ingots to M.S. Angles, and thereafter, their unaccounted clearance to various buyers - No verification was made in assessee's manufacturing unit or in their records - Statements did not provide details of receipts with dates, manufacture or sale to identifiable buyers - It is essential to have some piece of corroboration for such a clandestine activity other than sole evidence of general admission statement of Director or /partner - Impugned order set aside: CESTAT


Nabha Steels Ltd Vs CCE (Dated: February 8, 2016) CX - Second round of litigation - It is alleged that assessee has not physically received goods and in which invoices were made on ground that octroi received/ procured does not mention name of assessee or supplier in octroi records - As order of Tribunal has attained finality because both sides have not challenged order and as per that order of Tribunal, burden to prove that goods were received by assessee cast upon assessee - Assessee has not come up with concrete evidence that they have received goods except denying allegation of revenue - Assessee cannot avail cenvat credit as they have not come up with complete evidence to show that they have physically received goods by way of producing any evidence - Impugned order upheld: CESTAT


Superior Fire And Security Services Ltd Vs CCE & ST (Dated: April 5, 2016)

CX - Availability of cenvat credit of ST paid on various taxable services - Definition of 'Input Service' contained in Rule 2(l) of CCR, 2004 was substituted w..e.f. 01.04.2011 by Notfn 3/2011-C.E. (N.T.) - Since amount of disputed cenvat credit of Rs. 6,76,214/- is prior to 01.04.2011, and phrase 'activity relating to business' was specifically finding a place in definition clause of 'input service', assessee shall be eligible for cenvat benefit on disputed services - As authorities below have disallowed cenvat credit of Rs. 7,03,266/- instead of amount of Rs. 6,76,214/- as claimed by assessee, it is appropriate to remand the matter to for ascertaining actual amount to which assessee shall be entitled for cenvat credit: CESTAT


CCE Vs M/s Shyam Telecom Ltd (Dated: September 1, 2015)

CX - Whether photocopy of courier bill of entry is a prescribed document in terms of sub-rule (1) of Rule 9 of CCR, 2004 - When courier agency has been permitted to file common bill of entry on behalf of several importers, obviously all such importers cannot be given original documents, and as such, benefit of cenvat credit cannot be denied - Since said bill of entry has been endorsed by authorized signatory of courier service and receipt of disputed goods and their utilization for intended purpose have not been disputed by CE Department, Cenvat credit cannot be denied to assessee: CESTAT


Sakata Inx India Ltd Vs CCE & ST (Dated: July 23, 2015)

CX - Cenvat credit on various input services denied to assessee on the ground that these services have no nexus with manufacture of final product by assessee - Issue is no more res integra in view of various judgments/ decisions of judicial forums - Since, definition of input service is very broad and the fact is not under dispute that those services have been used by assessee for its business related activities, cenvat credit cannot be denied to assessee - Impugned order set aside: CESTAT


M/s Sage Metals Ltd Vs CCE (Dated: September 1, 2015)

CX - Interest on delayed reversal of cenvat credit and imposition of penalty - Since assessee has reversed wrongful cenvat credit before its utilization and intimated

Department of such reversal particulars, interest cannot be charged for such late reversal since taking of cenvat credit and reversal thereof will be construed as a mere book entry - As also there is no violation of provisions of Cenvat Credit Rules, and more particularly any intention on part of assessee in defrauding the Government Revenue, Rule 15 read with Section 11AC will have no application for imposition of penalty: CESTAT


M/s Metlon India Vs CCE (Dated: April 11, 2016)

CX - Cenvat credit on inputs were denied to assessee on the ground that process of laminating/ metalizing of polyester film does not amount to manufacture, and as such, goods manufactured were not excisable - When inputs are received and used in or in relation to manufacture of final product and removed from the factory on payment of Central Excise duty, cenvat credit can not be denied on said inputs - Appeal allowed: CESTAT


M/s Kashi Vishwanath Steel Ltd Vs CCE (Dated: March 2, 2016)

CX - Refund - Assessee had taken cenvat credit on capital goods and inputs at time when its final production had been cleared on payment of duty - It started clearing goods at 'nil' rate of duty w.e.f. 26.09.2003 availing benefit of Exemption Notfn 50/2003 - At insistence of Revenue, it reversed credit taken on capital goods and inputs and also paid interest on so-called delayed reversal - Held: Cenvat credit legally taken and utilized was not recoverable unless specific provisions existed therefor and that there was no one to one co -relation in credit scheme - Once it is held that no co-relation between raw material and final product is required, assessee's plea stands answered - If credit can be taken against excise duty on a final product manufactured on very day, it makes it abundantly clear that there need not be co-relation between input and goods cleared and as a result, validly taken credit need not be reversed: CESTAT


Kakatiya Cement, Sugars & Industries Ltd Vs CC & CE (Dated: January 11, 2016)

Central Excise - CENVAT Credit - MS Items - Credit denied on MS items on the ground that the items used for structural support to the machinery for manufacturing of sugar do not qualify as capital goods, for the period June 2007 to April 2008 - Chartered Engineer's certificate and the photographs produced by appellant showing the use of the items were not considered by authorities - Impugned items were used as supporting structure to the centrifugal machinery used in the manufacture of sugar for separation of sugar and molasses - Without this fabrication, the centrifugal machinery, which is the main part of sugar plant, cannot be installed and operated - Without such supporting material, plant could not function - In view of the precedents which held that credit on MS items used for fabrication/manufacture of capital goods is admissible, denial of credit is not sustainable and is set aside - Appeal allowed. [paras 2, 4, 5, 6, 7]


Mr Mukesh Kumar Gupta Vs CCE (Dated: February 25, 2016)

CX - In SCN, only allegation is that assessee is not maintaining proper record - It is not disputed by revenue that assessee were working under small-scale exemption notification and it is not the case of revenue that by adding value of unaccounted goods, assessee cross the value of clearance prescribed under small-scale exemption notification - When exemption limit is not crossed, evasion of duty cannot be alleged even though goods were cleared without any covering documents and therefore confiscation and penalty cannot be ordered - Impugned order is not sustainable, therefore, same is set aside: CESTAT


Shree Parvati Metals Vs CCE (Dated: February 2, 2016) CX - It is alleged that assessee was taking CENVAT Credit on HR coils/sheets of thickness below 10mm only on basis of invoices without receiving goods - As statement of Shri Naresh Singh is relied upon against assessee, not allowing his cross-examination does cause prejudice to assessee, therefore in absence of his cross-examination, Shri Naresh Singh's statement cannot be used as evidence against them - Proprietor himself admitted in his statement that he never received any coil or plates of thickness below 10mm in his factory - There was no retraction of statement nor any allegation that same was obtained under duress - Thus proprietor's statements fully and decisively establish alleged offence - No infirmity found in impugned order: CESTAT


Icomm Tele Ltd Vs CC,CE ST (Dated: January 4, 2016) Central Excise - Benefit of Exemption - Limitation - Appellant-manufacturer of FHTDMA equipments cleared them to Bharat Electronics Ltd., without payment of duty under the notification which grants exemption to all the goods supplied to ‘SAMYUKTA' programme under Defence Ministry - Exemption granted on 16.3.1995 continued upto 1.6.2006 by periodical extensions and it was further extended on 21.8.2006 upto 1.12.2007 - During the time gap between 2.6.2006 to 20.8.2006, there was no effective continuation of the exemption - Hence, Revenue demanded duty on the clearances made during such period - Appellant contends that the exemption to the ongoing programme should be available all along and also the demand raised on 1.5.2009 for the period 2.6.2006 to 20.8.2006 is time barred - Admittedly, there is a gap period during which there is no specific exemption for the impugned goods - However, facts show that it is not a simple case of non-availability of any exemption for the past clearance prior to the date of notification - Hence, from the facts though it is seen that appellant has a strong case on merits as regards availability of exemption without any interruption, case can be disposed of on the question of limitation alone - Appellant entered all the clearances in their records and filed regular returns also - Impugned order did not analyze the reason for sustaining the demand for extended period - If at all there is a mistake on claiming exemption during gap period, it is on both the sides, i.e., Revenue and appellant - There is no unearthing of suppressed facts by Revenue or positive act with intent to evade tax by appellant - Given the factual matrix of the case, there is no reason to justify invocation of extended period on the ground of suppression or fraud - Hence, impugned order of duty demand is not sustainable and set aside - Appeal allowed - Notification No. 64/95-CE dt. 16.3.1995 extended vide Notification No. 40/2006-CE dt. 21.8.2006. [paras 1, 2, 3, 5, 6, 7]


Punjab Tractors Ltd Vs CCE & ST (Dated: February 23, 2016) CX - When there is a statement on record that M/s Jiten Steel Industires has supplied

goods to assessee alongwith invoices and assessee has used those goods in manufacturing of their final goods, then, cenvat credit cannot be denied to assessee - Assessee is not required to investigate prior receipt of goods when first stage dealer has supplied goods to second stage dealer: CESTAT


CCE Vs Patiala Distillers And Manufactures Ltd (Dated: March 23, 2016) CX - Assessee engaged in manufacturing of Rectified Spirit, Extra Neutral Alocohol, Fermentation & Distillation, Fusel Oil and CO2 gas - From the process of manufacture of Rectified Spirit (RS) and Denatured Spirit (DNS), it is clear that capital goods have been used by assessee for processing of dutiable as well as exempted goods, therefore, cenvat credit has been rightly availed by assessee - No infirmity found in impugned order, same is upheld: CESTAT -


CCE Vs Neo Corp International Ltd (Dated: February 18, 2016) CX - Assessee exported goods and availed benefit of exemption Notfn 18/2009-ST on ST remittances incurred on receipt of GTA services utilised for transportation of exported goods from assessee's factory to port of export - Though, rejection concurrently by authorities below was also on ground that GTA services were utilised on to and fro basis for empty containers which is outside the purview of exemption Notfn in terms of Section 65(105)(zzb), this conclusion is seen to be contrary to decision of Tribunal in Tata Coffee Limited - 2010-TIOL-1780-CESTAT -MAD - However, since concurrent findings on bar of limitation aspect, are impeccable, no case is made out for appellate interference: CESTAT - Appeal dismissed : DELHI CESTAT


CCE & ST Vs Mahamaya Steel Industries Ltd (Dated: January 21, 2016) CX - Assessee engaged in manufacture of various Iron and Steel products such as Joists, Channel, Angles and Blooms and also availed cenvat credit of duty paid on inputs and capital goods - Revenue views that credit taken on structural items and cement is not legal and proper - Such assertion by Revenue is without any supporting evidence whereas assessee have produced detailed certificate indicating usage of various steel items in fabrication of conveyors, cooling bed, overhead tanks, billet, pusher bed, heating furnace and ancillary heating furnace - Credit correctly availed on steel structural items - Cement used for constructing under-ground storage tank, which is a civil structure, will not be eligible for cenvat credit: CESTAT - Appeal partly allowed : DELHI CESTAT


Met Trade India Ltd Vs CCE & ST (Dated: January 19, 2016) CX - Assessee, MTIL (Unit-I) was sending lead ingots to Unit-II for manufacture of Lead Oxide and was receiving back the same and clearing on payment of duty from Unit -I of assessee - After acquiring Unit-II, assessee requested Department for

granting a common registration which was rejected by adjudicating authority - Finished product of Unit-I of assessee is starting point of manufacturing in Unit-II - It cannot be said that processes of both units are not inter connected especially when assessee has a common sales tax registration, files common income tax returns - Accordingly, assessee has a case for common CE registration and adjudicating authority has not interpreted procedure in its right spirit when some procedural accommodation is prescribed and there is no risk to Revenue - Appeal filed by assessee to that extent is required to be allowed.

Once assessee's appeal on common registration is admissible then both units are treated as one assessee and no duty on intermediate stages are required to be paid when duty is paid on end products - Nothing on record as to how adjudicating authority concluded that assessee's unit-I has not taken CENVAT Credit - In absence of any such evidence, no duty was required to be paid by assessee on goods got manufactured from Unit-II as 'job worker' under Rule 4 (5) (a) of CCR even if units were separate and entire goods and transfer was recorded in assessee's books of accounts: CESTAT - Appeals allowed : ALLAHABAD CESTAT


Lala Ramswaroop Ramnarayan And Sons Vs CCE & ST (Dated: January 11, 2016)

CX - Assessee engaged in manufacture of calendar/panchang - Whether impugned publications are more appropriately categorized as calendars (CETH 4910) or as panchang or almanac (CETH 4901) - Assessee claimed that it contained almost 99 types of information covering a wide range of subjects and submitted a list of such information - Impugned publication is named and marketed as 'Panchang' - Less than 50% of page space displays date sequence of calendar month - Page contains many details of auspicious times, grihasthithi Rashiphal other information of planetary position - Impugned items can not be categorized as 'calendars' and classified under C.E.T.H. 4910 - Findings of lower authorities are not sustainable: CESTAT


Nagarjuna Agrichem Ltd Vs CC & CE (Dated: January 29, 2016) Central Excise - Interest - Appellant paid differential duty by debiting from their Cenvat account on the clearances made to their sister concern by raising supplementary invoices - Demand raised on the ground that interest has to be paid on the differential duty as per Section 11(AB) - Appellant contends that as they were having excess Cenvat credit in their account during relevant time, they would have paid full duty by utilizing it and the sister concern would have taken credit on such duty paid and so the entire transaction is revenue neutral -Appellant and sister concern being two different units/establishments, such an inference of revenue neutrality, cannot be deduced - Appellant has not opted for provisional assessment under Rule 7 of Central Excise Rules, 2002 - In 'SKF India Ltd.' , case it was held that payment of differential duty by assessee at the time of issuance of supplementary invoices to customers demanding the balance of the revised prices clearly fall under sub section (2B) of Section 11A - And as per Section 11AB, 'where any duty of excise is not levied or paid or has been short levied or short paid or erroneously refunded, any person who paid duty under section 11A(2B), is liable to pay interest' - In the judgment of ' Steel Authority of India ltd.' case while examining the issue of 'demand of interest on differential duty paid on account of enhanced price received due to price escalation', after taking note of 'SKF India Ltd.' case, though it was opined that the judgment in 'SKF India Ltd .,' needs a re-look by a Larger Bench, since that decision is still in force, it needs to be followed - Hence, appellant is liable to pay the interest -

Appeal dismissed - Central Excise Act, 1944. [paras 1.1., 2, 4]


CCE Vs Jayalakshmi Fertilisers Ltd (Dated: January 1, 2016) Central Excise - CENVAT Credit - Original authority denied credit as wrongly availed on the ground that it was taken on the basis of endorsed Bills of Entry, and the invoices issued by importer to assessee are commercial invoices but not central excise invoices - Commissioner (A) set aside the demand for reversal of credit and the penalty - Revenue's case is that the Rule 9 of CCR, does not mention 'endorsed bill of entry' as valid document for availing credit - It is seen that the importer had endorsed the Bills of entry in the name of assessee - Assessee had furnished copy of TR-6 challan evidencing payment of Customs duty -Commissioner (A) observed that Revenue has not challenged the fact of duty payment on imported inputs by assessee, receipt of such inputs in the factory and their utilization in manufacture of final products - Importer, at the time imports was not registered with Central Excise Department and issued commercial invoices in which all the details of duty, description of goods, name and address of factory are shown - On such invoices, goods were received within the factory and were accounted in the books and credit was availed - Moreover, assessee themselves sought clarification from Department on the eligibility of credit on the endorsed bill of entry - On clarification that credit cannot be availed, assessee reversed such credit - Hence, SCN issued after such reversal is unwarranted - When the endorsed bill of entry is accompanied by proper invoice and the evidence of payment of duty, the credit cannot be denied treating it as not a valid document for taking credit - Hence and in view of the precedents, impugned order requires no interference - Revenue's appeal dismissed. [paras 2, 3, 4, 5]


Nestle India Ltd Vs CCE (Dated: January 19, 2016)

CX - Availment of cenvat credit on inputs contained in waste and scrap which have been cleared without payment of duty by assessee - From provisions of Rule 57D it is clear that assessee is not required to reverse the credit on inputs contained in waste and scrap and assessee is not required to pay duty - No merit found in impugned order, same is set aside and appeal allowed: CESTAT


Maral Overseas Ltd Vs CCE (Dated: April 1, 2016)

CX - Issue is relating to quantum of duty payable on finished goods at time of debonding of E.O.U. - Proceedings against assessee was to deny concession claimed by them in terms of Notfn 23/2003- CE - Finished goods which are lying in stock are manufactured by an E.O.U. - Duty liability there -upon has to be discharged as a pre -condition for final debonding of unit which will convert them to a normal domestic Central Excise Unit - Foreign Trade Policy apparently deals with goods which are allowed to be sold in India by an E.O.U. in terms of policy and same is applicable to a functioning E.O.U. - It cannot be said that such expression in FTP applies to finished goods lying in stock when E.O.U. intents to exit the scheme itself - Debonding and conversion of E.O.U. to a D.T.A. unit is legally permissible only on discharging all duty liabilities on capital goods, raw-materials and finished goods lying in E.O.U - It is not legally tenable to argue that rate of duty applicable to a normal Central Excise Unit should be applicable to a E.O.U. even before E.O.U. becomes a normal Central Excise Unit - No merit in appeal, accordingly, dismissed: CESTAT


CCE Vs Sony Polymers Pvt Ltd (Dated: April 15, 2016) CX - 'Sticks' and 'Pens' being secondary packing & containing commodities that are below the threshold prescribed for compliance with the SWAM PCR, 1977 are beyond the ambit of Section 4A of CEA, 1944 - Adopting the theory of consumer behavior is flawed reasoning - Revenue Appeal dismissed: CESTAT [para 12 to 19, 23]



CCE Vs Tvs Motor Company Ltd (Dated: February 4, 2016) Central Excise - Provisional assessments - assessees are manufacturers of motor vehicles and mopeds - they discharged duty for the clearances provisionally, on the ground that they intend to claim certain abatements from the price quoted in the invoice like freight, discounts, turn over tax, tax paid under section 3(4) of TNGST Act and cash discounts and trade discounts and Pre Delivery Inspection (PDI) and Free Service Coupon (FSC) - Accordingly, provisional assessment was ordered for financial years 1999 to 2004 - 05, and subsequently finalized for the respective financial years - the adjudicating authority demanded differential duty [in respect of disallowed deductions towards equalized freight, tax paid under section 3(4) of TNGST Act and trade discounts , PDI and FSC]/ ordered for refund of the excess payment - corresponding portions agitated by the assessee / department respectively before Commissioner (Appeals), who modified the OIO, allowing certain deductions, and upholding disallowance of certain others, now agitated on corresponding portions by Revenue and assessee herein.

Held: Under Rule 5 of the CE Valuation Rules, 2000, there is no absolute prohibition for denying the abatement on freight in cases where the freight is not shown separately in the invoices - the rule itself specifically excludes the actual cost of transportation from the place of removal up to the place of delivery of such excisable goods and it requires a condition for showing the freight separately in the invoices, only in cases where the cost of transportation is charged to the buyer in addition to the price - Therefore, where the freight from the place of removal to the delivery point is in-built in the price itself, the question of showing it separately in the invoices does not arise - the appellant are able to prove the extent of actual price involved by submission of a Chartered Accountant's Certificate which should be sufficient for claiming the abatement - the rejection of abatement on equalized freight in-built in the price itself is not correct, merely because freight element has not been shown separately in the invoices; the Appellant is eligible for deduction of equalized freight. [Para 21, 22]

The transaction value under section 4 of the Act refers to price paid or payable for the goods removed - It is not the case of the department that whomsoever is not eligible for the discount is asked to pay back the same by the appellant through debit notes - once the cash discount is allowed in the invoices, irrespective of the eligibility to the said discount, if any, of the buyer, same is passed on in the invoice itself - therefore, the valuation provision read with the rules would not envisage rejection of such discounts when the same is not recovered later by the Manufacturer - The buyer based on the net price charged in the invoices, pays the amount to the Manufacturer and that becomes the transaction value - Therefore, there is no question of rejecting the benefit of abatement of such discount on the ground that the same is not actually passed on to the buyer; appellants are eligible for deduction of cash discounts. [Para 22(1)]

Supreme Court, in the appellant's own case, held that where the dealer incurs expenditure for pre -delivery inspection and After-sales service charges (free service charges) after the vehicles are bought from the Manufacturer, the same cannot be added back to the sale price, charged by the Manufacturer from the dealers, for computing assessable value - Accordingly, the appellants are eligible for deduction of these charges. [Para 22(2)]

While finalizing the assessment, the impugned orders do not arrive at the value of each Motorcycle/Moped after taking into account all the abatements allowed/disallowed and arriving at assessable value from cum-duty value - Abatements are applicable for all vehicles cleared and each exclusion or inclusion is applicable for every motor cycle, scooter, moped cleared and the original authority should have determined the assessable value by first deducting the abatement element and thereafter arriving at assessable value for calculating the differential duty/excess duty - adjudicating authority directed to recompute after adjusting the excess paid, vis -a-vis the demand and finally arrive at the differential duty. [Para 22(3)]

The liability to pay tax under Sec 3(4) of TNGST Act, on the value of input purchased arises only in the event of transfer of final products outside Tamil Nadu, i.e., on stock transfer - This tax is a levy on the finished excisable goods cleared from the factory and therefore excludable from value in terms of Section 4 - The event of taxation is the sale of manufactured final products - The appellant paid the tax as a seller of goods, on the purchase value of inputs; and it is a levy on sale of goods - The abatement for this Tax allowed in the impugned order is correct - Revenue could not rebut the findings recorded by Commissioner (Appeals) regarding abatement on trade discounts, after considering the fact that the appellant circulated his intent oftrade discounts prior to removal, and it was generally understood as trade practice -assessee's appeals allowed and the departmental appeals are rejected. [Para 23(1), 23(2), 25]


CCE Vs Tube Products of India (Dated: February 18, 2016) Central Excise - Interest - respondent assesses are engaged in the manufacture of steel strips and steel tubes - They cleared the goods to their sister units and opted for provisional assessment owing to fluctuation in the cost of raw materials and further the overhead expenses can only be determined at the end of the accounting period - In all cases, assessments were finalized; duty paid prior to finalization appropriated; and interest demanded under Rule 7(4) of CER 2002, which was paid, and subsequently claimed as refund - the claim was rejected in adjudication, but allowed by Commissioner (Appeals) on the ground that the duty was paid prior to finalization of assessment, hence interest liability does not arise - Revenue is aggrieved by the OIAs in these appeals.

Held: In terms of Rule 7(4) of CER 2002, interest is payable only when any amount is payable consequent to the order for final assessment. When no amount is to be paid consequent to the order of final assessment, sub-rule 4 is not attracted at all - identical issue has been decided by the Bombay High Court in the case of CEAT Ltd. Vs. CCE Nashik (affirmed by Apex Court), and Tata Motors Ld. Vs. CCE, Pune, wherein it has been held that interest is not payable in cases where differential duty is paid prior to the finalization of provisional assessment; and that if the interest is payable on differential duty paid prior to finalization, the rule would have specifically worded so - In the absence of any such wording in Rule 7, the interpretation of the Revenue is not sustainable - on identical issue in CCE, Pondicherry Vs. Measurement Control India Ltd., it has been held that interest is not payable when differential duty is paid before passing final assessment - following the judgment of the Bombay High Court as upheld by Supreme Court and also the Tribunal's decision, the impugned orders are upheld. [Para 8]


Sterlite Industries India Ltd Vs CCE (Dated: February 4, 2016) Central Excise - Valuation - appellants are engaged in the manufacture of Copper Anode, Copper Cathode and Continuous Cast Copper Wire Rods - The copper anodes were not sold but were cleared to their sister units for the manufacture of copper cathodes/continuous copper wire rods - the assessees were filing price declarations to the Department regularly adopting cost construction method for determining the assessable value for payment of duty under the Central Excise valuation Rules - The accounts of the appellants unit was subjected to cost audit under Section 14A of the Central Excise Act, 1944 and the Cost Auditor was nominated for this purpose and he carried out cost audit for the purpose of arriving the cost for the period 1996-97 (July 96 June 97) and 1997 (July-Dec.97) and submitted his report, based on which, proceedings were initiated for the recovery of differential duty - The matter reached Tribunal, who remanded the case for determination of liability on CAS-4 values; the denovo order is agitated in E/295/2000; E/412/2010 and E/406/2010 relate to identical demand for the subsequent period.

Held: Appellant submitted additional evidences like CA certificate, statement of PLA and cenvat account, CAS-4 etc., which were not submitted to the lower authorities -they do not merit consideration as these are of fresh reports or documents created after adjudication and issue of orders so as to cover their plea - the miscellaneous applications seeking submission of additional evidence and additional grounds is rejected. [Para 14]

The lower authority proposed addition of costs in respect of the following ten elements: 1.Foreign Exchange Fluctuation; 2.Difference in CC consumption; 3.Power & Fuel charges; 4.ISO -TQM charges; 5. Salevalue of sulphuric acid in excess of P & L; 6.Professional fee and testing charges; 7.Duty drawback; 8.LC Charges; 9.Excess sale value of sulphuric acid shown in P & L; and 10.Difference in RM consumption - All except 4, 6, 9 are contested herein - In appeal No. E/412/2010, the contest is only on the limited ground of not allowing the adjustment of excess duty paid as against the shortage during the relevant period; whereas, the Revenue is contesting the order allowing certain deductions in respect of foreign Exchange fluctuation, ISO -TQM charges, analysis charges and sale value of sulphuric acid shown in P & L account etc. - In appeal E/412/2010 and E/406/2010, the issue is whether disallowing the adjustment of excess duty paid against the shortage of duty allowing certain deductions in respect of five issues and reduction of the value is correct. [Para 16-18]

There is no provisional a ssessment during the relevant period; the assessment and decision on exclusion or inclusion of cost element in the adjudication proceedings does not fall under the category of finalization of provisional assessment - The factual invoice figures shows that the difference in amounts is not purely on account of foreign exchange fluctuation - The price indicated in the final invoices is the amount which is to be paid by the appellant for supply of the goods; therefore, it is fully within the guidelines of para 5.1 of CAS-4 - Appellants relying on para 5.16 and other paras of the guidelines note is of no relevance - as per CAS-4 the procurement of raw materials payment as per the final invoices is directly accrued to the supply of raw materials - hence inclusion of the amount of Rs.11,92,43,601 shall form part of the value of copper anodes and is not related to any financial charges as claimed by the appellants - As per the final invoices and provisional invoices, the LME price of copper remains same; accordingly, the findings of the adjudicating authority on this issue is upheld - TB is prepared for each unit where the cost of each product of the plant has been worked out separately and it is the basic background for compiling final P & L account - In the absence of any evidence it is held that the adjudicating authority has rightly added the cost of power, fuel and water as per CAS-4 and as per DD (Cost) report; the findings of the adjudicating authority on this account are upheld - As regards the analysis charges and the expenses regarding demurrage and other charges; differential customs duty and promotion of DEPB; and deduction of sale

value of sulphuric acid as shown in P & L account, the adjudicating authority's findings has clearly brought out that as per DD (Cost) report and as per CAS-4 all these charges are liable to be included for determining the cost of the raw materials; same upheld - in respect of drawback, the adjudicating authority arrived at the amount as per the SION norms fixed for the copper anodes and continuous wire rods manufactured and exported by the appellant and allowed after taking into account SION norms - Since, the norms for copper anodes manufactured by the appellant was fixed by the DGFT, the Revenue has no say on the norms; accordingly, the adjudicating authority has rightly calculated the eligible deduction by taking the norms - When SION norms is available for copper anodes, and the appellant is the only manufacturer of copper anodes at Tuticorin, the adjudicating authority has rightly allowed the deduction and included the differential amount in the cost - no merit in the appellant's contention; the addition of cost as per CAS-4 is upheld. [Para 20]

In E/412/2010, the appellants only prayer is to set aside that portion of the impugned order in appeal disallowing the adjustment of excess duty paid - the assessment and determination of value of cost of production of copper anodes and consequent demand of differential duty were confirmed under Section 11A of CEA and this is not the case of finalization of provisional assessment under Rule 7 of CER, 2002 - they have admitted that they have already availed cenvat credit on the duty paid on copper anodes at their unit at Silvasa and that they will not claim any refund on this account - considering the factual position, the appellant's claim for adjustment and claiming automatic set off excess duty paid does not arise, and the order of the Commissioner Appeals) is upheld to that extent. [Para 22]

As regards appeal No. E/406/2010, the adjudicating authority while determining the cost of copper anodes, has added various cost elements as per DD (Cost) Report and the Cost certificate produced by the appellants as per CAS-4, and confirmed the differential duty - Whereas, the Commissioner (Appeals) in the impugned order allowed deductions from cost in respect of foreign exchange fluctuation, analysis charges, ISO -TQM charges and deduction of sale value of sulphuric acid etc., and held that the amount not to be added- It has already been held that these elements are includible; hencethe Commissioner (Appeals) order to that extent allowing deductions on 5 items is liable to be set aside and the OIO passed by the adjudicating authority is liable to be upheld - the adjudicating authority has already dropped Section 11AC penalty and taking the overall facts and circumstances of the case into consideration; that the issue is being debated from 1997 onwards; and also considering the Tribunal's two remand orders, the penalty under Rule 25 is not imposable, the same stands waived. [Para 23, 24]


CCE & ST Vs Ravishankar Industries Pvt Ltd (Dated: February 1, 2016) Central Excise - Job work - the respondent manufactured excisable goods on job work basis, out of the raw material supplied by the principal manufacturer - The Adjudicating Authority demanded differential duty and also imposed penalty on the grounds that the respondent has not discharged the duty as per the value on the sale price of the principal manufacturer - Commissioner (Appeals) set aside on the OIO on the ground that the adjudicating authority lacked jurisdiction; the impugned OIA is agitated by Revenue herein.

Held: This is a valuation dispute of the goods manufactured and cleared by the respondent on behalf of the principal manufacturer - the Assistant Commissioner is competent to decide the valuation issue and demand the differential duty - On the identical issue the Supreme Court in the case of Pahwa Chemicals Pvt Ltd. vs. Commissioner of Central Excise, Delhi held that the order cannot be set aside for want of jurisdiction, and is squarely applicable to the present case - The Punjab and Haryana High Court in the case of Commissioner of Central Excise vs. Saraswathi Rubber Works (P) Ltd had allowed the revenue appeal by relying the Apex Court

decision referred above - The same is applicable as in the present case the issue is on valuation and re-determination of duty and imposition of penalty; the impugned order setting aside the original order on the jurisdiction is not justified; the same is set aside and the Commissioner (Appeals) is directed to decide the issue on merits, within three months. [Para 9, 10]


Caprihans India Ltd Vs CCE (Dated: March 31, 2016) CX - Classification - It is alleged that PVC films/sheets even after printing would continue to fall under Chapter Sub Heading 3920.91 of CETA 1985 and not Chapter Heading 4902 as claimed by assessee - Commissioner (A) has disposed of the appeal by following judgement of Tribunal, which assessee claimed to be no more a good law, in view of recent decision of Supreme Court delivered in their own case - Revenue submits that findings of Supreme Court rest on facts alleged in SCN before it, therefore, present facts also need to be analysed alongwith relevant Excise invoices and other evidences so as to ascertain/determine applicability of said judgement and other judgements on subject to facts of present case - Matter remanded: CESTAT


Ganga Kishan Sahkari Chinni Mills Ltd Vs CCE (Dated: October 26, 2015) CX - Denial of Cenvat credit on certain goods - Except inputs which have been used in civil work and which was not disputed and reverse entry was passed during course of investigation, other goods have been utilised in repair and maintenance of capital goods which are further used in production of excisable finished products - No final product can be manufactured without repair and maintenance and upkeep of capital goods, inputs required for upkeep and maintenance are eligible inputs for Cenvat credit - Impugned order is set aside: CESTAT


R K Transport Company Vs CCE (Dated: February 29, 2016) CX - Order passed in haste by the adjudicating authority without considering the reply filed or granting personal hearing - Matter remanded: CESTAT [para 6]



CCE Vs Magnetic Mangal Pvt Ltd (Dated: February 1, 2016) CX - Allegation in SCN is that they have wrongly availed credit on inputs and input service on basis of invalid documents as invoices bearing wrong address - In SCN, there is no allegation that they have not received input/input service - Therefore, such ground is beyond scope of SCN and is not sustainable in eyes of law - Credit cannot be denied merely on ground that inputs are bearing wrong address: CESTAT


Eastman Spinning Mills (P) Ltd Vs CCE (Dated: February 2, 2016) Central Excise - Demand - appellants are manufacturers of cotton yarn, cleared on payment of Excise duty - The finished goods were partly cleared to their own partnership firms and partly cleared to the unrelated buyers The SCN proposing demand of differential duty was dropped in adjudication, consequent to which the appellant claimed refund of the differential duty already paid, under protest - Refund was also sanctioned; and Revenue preferred appeals before Lower Appellate Authority against both OIOs - The Commissioner (Appeals) in the impugned OIA No.40/2005 dt. 21.3.2005 and OIA No.205/2005 dt. 13.10.2005 set aside the OIOs and allowed the Revenue's appeals; the same is agitated herein.

Held: The short issue is whether value for the excisable goods partly cleared to the sister unit/partnership firm is to be determined as per Rule 8 of CEVR 2000, or as per transaction value under Section 4(1) (a) of CEA 1944 - no dispute on the fact that appellants are manufacturer of cotton yarn and more than 50% of the finished goods were cleared to unrelated buyers - Commissioner (Appeals) held that value to be determined under Rule 8 as per the cost of production - the adjudicating authority has dealt the issue in detail, and considered the facts that appellants have cleared the goods partly to unrelated buyer and partly to their sister unit - the method of valuation when goods are partly cleared to related person, has been clarified by the Board in the circular dt. 1.7.2002, where it has categorically clarified that in case of captive consumption, the goods in their own factory valuation would be done under Rule 8; that when same goods are partly sold by the assessee then such goods should be assessed on the basis of transaction value and duty to be determined as per Section 4 for each removal - This issue stands settled by the Tribunal's Larger Bench in the case of Ispat Industries Ltd. Vs CCE Raigad - impugned orders set aside. [Para 6]


Devashree Ispat Pvt Ltd Vs CC, CE & ST (Dated: January 20, 2016) Central Excise - Refund Claim - CENVAT Credit - MS Items - Appellant was issued letter from Range officer directing them to reverse the credit as it was wrongly availed on MS items used in structural items as capital goods - Appellant reversed the credit under protest and filed for refund of it which was rejected on the ground that the credit was inadmissible - From the records, it is seen that the Department has not issued any SCN proposing to deny the credit taken on MS items or alleging wrong availment of credit, except the letter issued by Range Officer stating that the credit is not admissible - Appellant reversed the credit pursuant to the letter, under protest and thereafter filed refund claim - A SCN was then issued proposing to reject the refund - It is seen that appellant did not file any reply to the SCN, explaining the use of the MS items - Adjudicating authority is seen to have passed the impugned order that the credit is not admissible, basing on the available records - In such a situation, it is a fit case for remand to give a chance to appellant to file reply and substantiate their claim that the credit was rightly availed on MS items - Hence, matter remanded to adjudication authority for de novo adjudication in the light of the precedents and to decide the issue of admissibility of credit on impugned MS items while considering the issue of refund - Appeal disposed of. [paras 2, 3, 5]


Dadu's Mithai Vatika Vs CC, CE & ST (Dated: January 12, 2016) Central Excise - Clandestine Removal - Quantification - On the allegation that the appellant-sweet manufacturer was also manufacturing dutiable goods like cookies, biscuits, cakes and pastries and was clearing them without payment of duty and without central excise registration, and as they have crossed SSI exemption limit

during relevant period, duty demand of Rs. 5.16 lakhs raised with interest and penalties - Commissioner (A) set aside the penalty on appellant's MD while upheld the other part of the demand - Appellant contends that Revenue has adopted ‘best judgment method' for quantifying dutiable clearances which is applicable only for provisional assessment but not in the case; Revenue's calculations are only assumptions; as per their calculations, duty liability along with interest is only Rs. 4 lakhs which is already paid - Revenue contends that the facts came to light only after investigation of appellant's premises by officers and appellant deliberately evaded tax - Appellant was manufacturing both dutiable and exempted (sweets) goods but was not maintaining any separate accounts - Appellant did not mention description of the goods on sale bills - There was huge variation between total turnover declared by appellant for the purpose of VAT payment and the printouts taken by Excise officers for previous periods - As appellant submitted that there is a software problem and printouts cannot be relied on for calculating the demand and as they had not produced any reliable documents/details on the dutiable clearances made, adjudicating authority has arrived at the duty demand, basing on appellant's VAT returns - Appellant's calculation of the sale value was rejected as no calculation sheet/basis for arriving at such sale values was given by them - Hence, when there was no data to arrive at the actual clearances made, department had adopted the method best possible which may include a little guess work - Though department used the word ‘best judgment method', it is seen that they have relied on the VAT returns and other available documents which are statutory records and so it cannot be said that the charges are merely based on theoretical working - No merits in appellant's contentions - Impugned order calls for no interference - Appeal dismissed. [paras 2, 3, 5, 7, 8, 9, 10, 11]


Navjeevan Synthetics Pvt Ltd Vs CCE (Dated: April 25, 2016) CX - Interest can be demanded even when duty has been paid - proviso to s.11AB(1) of CEA, 1944 becomes operational only when duty becomes payable consequent to issue of a s.37B order - Appeal dismissed: CESTAT [para 5]



Himalaya Engineering Company Vs CCE & ST (Dated: March 17, 2016) CX - Penalty - Assessee has violated terms of declaration and had not intimated CE authorities on crossing exemption limit of Rs. 1 Crore - They continued to clear goods without payment of duty from 01.01.2005 to 07.03.2005, till the visit of officers - They we re aware of exemption limit and procedures to be followed, therefore, ingredients for invoking extended period under Section 11A and for imposition of penalty under Section 11AC are present - No reason to interfere with order of lower authorities imposing penalty under Section 11AC on assessee No.1 - Separate penalty should not be imposed on assessee No.2 who is partner of firm, as penalty has already been imposed on partnership firm: CESTAT


Concast Ferro Inc Vs CC & CE (Dated: January 12, 2016)

Central Excise - CENVAT Credit - MS Items - Credit denied on MS items such as plates, channels, tubes, rounds based upon the decision in ‘Vandana Global Ltd.', case by holding that the items were used for making structures of capital goods, for the

period April 2009 - Appellant submits that they had produced photographs and had written letter to department on the manner of use of the MS items - Jurisdictional Range Officer's verification report shows that the items were utilized in the plant and machinery - In view of the precedents which held that credit is admissible on MS items used for fabrication of capital goods/accessories/parts and structural supports to plant and machinery and in view of the facts, denial of credit is set aside - Appeal allowed. [paras 2, 3, 4, 5, 6]


Binjusaria Sponge & Power Pvt Ltd Vs CC, CE & ST (Dated: January 27, 2016) Central Excise - CENVAT Credit - MS Items - Credit availed on MS items such as plates, beams, channels, etc., as capital goods was denied, for the period June 2003 to December 2006 - Appellant has produced Chartered Engineer's certificate, photographs and other documents to show the use of MS items for installation and erection of plant and machinery/spares and components of capital goods - Issue is settled by the p recedents which held that the credit is admissible on MS items used for supporting structure of capital goods/components/spares - High Court in the case of ‘Mundra Sports & SEZ Ltd.' observed that the ‘Tribunal while deciding ‘Vandana Global Ltd.' case, has not mentioned in the judgment as to what is the aid resorted to by the Tribunal to hold that the amendment to Rule 2(k) to apply retrospectively' and observed that the amendment introduced w.e.f 7.7.2009 is to apply prospectively only - In view of the precedents, denial of credit is not sustainable and is set aside - Appeal allowed. [paras 2, 3, 5]


Smita Steels Rolling Mills Pvt Ltd Vs CCE (Dated: March 17, 2016) CX - CENVAT credit on Channel, angles, H.R. Plates, welding electrodes used in the manufacture of parts of furnace and other machinery. Held - Channel, angles, H.R. Plates, welding electrodes were used for fabrication/manufacture of parts or furnace which is capital goods, therefore, credit on these items are admissible - As regard credit on cement and CTD Bars, these items were neither used as capital goods nor as inputs for manufacture of Capital goods for the reason that Cement and CTD bars were admittedly used for making civil structure i.e. foundation for erection or installation of furnace and, therefore, credit is not admissible - since appellant have not disclosed the fact about use of CTD bars & cement to the department, it amounts to suppression of facts, therefore, the extended period is rightly invoked - duty liability & penalty to be re -quantified by adjudicating authority - Matter remanded: CESTAT [para 6]


CCE Vs Sandvik Asia Ltd (Dated: October 6, 2015)

CX - A part of the plant was, in accordance with procedure prescribed in the Foreign Trade Policy, converted as a 100% Export Oriented Unit and the available stock of raw materials and work-in-progress was placed at its disposal for use in production - Prior to conversion on 1 st September 2004, the assessee had utilised the entire credit available in the CENVAT Credit account for discharge of excise duty liability - Case of Revenue is that, though CENVAT Credit was taken on the entire raw material procured by assessee, usage of a part of it by the 100% Export Oriented Unit after 1 st September 2004 was tantamount to removal and non-utilisation for manufacture of excisable goods; such removal should have been preceded by reversal of the credit taken on such goods - Commissioner (A) setting aside o-in-o, therefore, Revenue in

appeal. Held: Not only is there no revenue impact but that there is no transfer at all - The role of M/s Sandvik Asia Ltd in the manufacturing premises remains unchanged - There is no transfer to speak of, much less, removal of raw materials - Hence, the provision of CENVAT Credit Rules cited by the original authority to confirm the demand is clearly inapplicable - Impugned order upheld & Revenue appeal rejected: CESTAT [para 6, 7, 8, 11]


Midas Care Pharmaceuticals (P) Ltd Vs CCE (Dated: April 13, 2016) CX - Refund - Simple fact that the price of the product was uniform does not lead to a conclusion that incidence of duty has not been passed on - appellants have not made any other arguments and have failed in the test laid down by the Supreme Court in the case of Allied Photographics India Ltd. - 2004-TIOL-27-SC-CX - appeal dismissed: CESTAT [para 4, 5]


Jyoti Capsules Vs CCE (Dated: January 21, 2016) CX - Exemption Notfn 108/95-CE - Whether clearance made duty free for supply made to a project financed by International Development Association, is eligible to exemption under said notfn - Issue is no longer res-integra - In assessee's own case for previous period, issue has been decided in favour of assessee - I n respect of supplies made to project funded by IDA, exemption under said notfn is granted: CESTAT


Hindustan Coca-Cola Beverages Pvt Ltd Vs CCE (Dated: April 12, 2016) CX - Appellants are manufacturers of aerated drinks - Broken bottles were cleared without payment of duty and pursuant to objection by revenue appellant paid Rs.6,02,400/- for the period February 2000 to December 2001 for the past clearances under protest and continued payment under protest for subsequent period - later, CESTAT deciding matter in appellant's favour and, therefore, refund claim filed - Claim rejected by lower authorities on ground of unjust enrichment - appellant before CESTAT. Held: In some cases, the customers may be entitled to avail Cenvat Credit and would have done so, if possible - Thus, in respect of all the invoices in which at the time of clearance the duty payment has been shown in the invoice, there is no doubt that the burden of duty has been passed on to the customers in such cases - provisions of unjust enrichment have been rightly invoked in such cases - however, as for the duty payment for the past period, appellant had not issued excise invoices but issued only commercial invoices - CA certificate also produced first time before Tribunal to justify that duty has not been recovered in these cases involving past period - matter is remanded to the Commissioner (Appeals) for giving his findings on the issue - Appeal disposed of: CESTAT [para 5, 6, 7]


Hindustan Petroleum Corporation Ltd Vs CCE (Dated: January 4, 2016) Central Excise - Liability - Marketability - Appellant is a manufacturer of petroleum products - On the ground that exemption under the Notification No. 67/95-CE dt.

16.3.1995 is not available for captively consumed High Speed Diesel oil (HSD), duty demand raised with penalty on the HSD used as fuel in appellant's own power generation plant - Appellant submits that the oil captively consumed by them cannot be sold/marketed as HSD in view of the specific standards prescribed for HSD as per law - In the precedent decision in appellant's own case on the same issue, it was held that the impugned goods are not marketable as they are not satisfying the requirements of marketability and hence cannot be made excisable - Such being the case, their captive consumption also cannot be made excisable - Moreover, Revenue has not produced any evidence in support of their contention that the goods are marketable - Hence, impugned order set aside - Appeal allowed. [paras 1, 2, 4, 5]


Industrial Associates Vs CCE (Dated: January 5, 2016) CX - Main grievance of assessee is that they were not given adequate opportunity in defending case by way of supplying documents and allowing cross examination of witnesses, before accepting statements as evidence that were relied upon in issuance of notice and confirming demand - Even though SCN was issued on 17/12/2012, specifically mentioning therein to file their reply within thirty days, but assessee chose not to respond to said notice; also in spite of sufficient opportunities of hearings were allowed to them in December, 2012 and January/February, 2013 they failed to respond - It is inappropriate to say that Commissioner has not allowed sufficient opportunity to assessee to defend their case.

It cannot be brushed aside also that present demand raised serious allegation ie. non-receipt of inputs, and availment of credit only on invoices during period May, 2008 to December, 2009 when finished goods were claimed to have been manufactured and cleared on payment of duty - While confirming demand, Commissioner referred to statement of proprietor, employees, transporters, input suppliers and certificate issued by Chartered Engineer in arriving at conclusion that assessee at relevant point of time did not have infrastructure to manufacture quantity of excisable goods claimed to have been manufactured and cleared from their factory - All these evidences need to be examined in detail after taking into consideration reply of assessee against such evidences - Assessee is directed to deposit offered amount of Rs.50.00 Lakhs: CESTAT


Auto Aircon (India) Ltd Vs CCE (Dated: March 8, 2016)

CX - Notfn. 10/97-CE - Air conditioning and refrigeration equipment supplied to R&D Establishment of Defence Ministry & modified as a result of research for use in specialized mobile operation theatres for use by the Indian Army in the field are entitled for exemption - Appeal allowed: CESTAT [para 7, 8]



Saint Gobain Sekurit India Ltd Vs CCE (Date: April 1. 2016)

CX - Appellants engaged in manufacture of laminated safety glasses [Hdg 7004.20] - Pallets and trolleys used in the various stages of manufacture as material handling equipment are got fabricated on labour charge basis in their factory by supplying the raw materials - SCN issued to appellant demanding CE duty on these pallets and trolleys by classifying the same under heading 7308.90 and denying benefit of

notification No. 67/95-CE - demand confirmed by lower authorities - appeal to CESTAT.


Razzolone Chemicals Vs CCE (Date: April 1, 2016)

CX - Valuation - Goods manufactured on job work, valued on cost construction basis - Notice was issued to the appellants alleging that the value at which they had cleared the material manufactured on job work basis was much lower than the value at which the same was cleared otherwise - It is the consistent stand of the CBEC as evident from its Circulars 619/10/2002-CX, dated 19-2-2002 & 643/34/2002-CX, dated 1-7-2002 that the decision of the Apex Court in the case of Ujagar Prints Ltd. 2002-TIOL-01-SC-CX and Pawan Biscuits Co. Pvt. Ltd. 2002-TIOL-04-SC-CX is to be followed before and after 1.7.2000 - assessment done by the appellants is correct and as per law - appeal allowed: CESTAT [para 4.2, 5]


J L Morison India Ltd Vs CCE (Date: March 31, 2016) CX - Appellant availed credit of Service Tax paid on the strength of the documents issued by their Head Office, which was registered as an Input Service Distributor (ISD) - SCN issued alleging that they could not have availed credit on the input service credit distributed by the ISD as the said services were availed in a different manufacturing unit i.e. the sister concern of the appellant - original authority in remand proceedings dropped the demand of Rs. 1,49,706/- and confirmed Rs. 1,62,954/- and in appeal Commissioner(A) dropped a further demand of Rs. 60,924/-, thus demand confirmed stood at Rs.1,02,030/- with equal penalty - appeal to CESTAT.


CCE Vs Central Cables Ltd (Date: October 6, 2015) CX - Duty liability on samples drawn for testing within the factory premises. Held: In view of the Board instructions, para 3.2.2 of Supplementary Manual, prescribing payment of duty only upon removal from the factory, the inclusion of samples in the finished stock or as addition to value of finished stock and the decisions in Thermax Culligan Water Technologies Ltd. 2013-TIOL-1877-CESTAT -MUM & RPG Life Sciences Ltd. 2010-TIOL-830-HC-MUM-CX , there is no reason to interfere with the order of the Commissioner (A) dropping the orders passed by the adjudicating authority - Revenue appeal rejected: CESTAT [para 6, 8, 12]

CESTAT RULING (CENTRAL EXCISE)...to the Notification No. 10/2008 dt. 1.3.2008 to the definition of input services w.e.f 1.4.2008, a radical change was introduced expanding the clearances

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