cestat ruling (central excise) · 2018-10-02 · cestat ruling (central excise)...

CESTAT RULING (CENTRAL EXCISE)

2017-TIOL-2792-CESTAT-DEL

Kakateeya Fabs Pvt Ltd Vs CCE (Dated: July 5, 2017)

CX - The main appellant got a work order dated 15.7.2009 from the second appellantfor fabrication, erection and testing of CW liners and pipes -the second appellant hadentered into a contract with M/s.NTPC in connection with setting up of VindhyachalSuper Power Project -a part of the work covered in the said contract was awarded tothe main appellant in terms of the above-mentioned work order -the main appellantfabricated pipes out of steel supplied to them by the second appellant - the mainappellant paid ST on the work executed by them as a sub-contractor to the secondappellant -the dispute in the present case is relating to central excise duty liability ofthe main appellant with reference to the manufacture of pipes -revenue of the viewthat the pipes manufactured by the main appellant will fall under the CETH 730539,under the main heading of ‘other tubes and pipes and steel' -SCN issued to demandand recover central excise duty not paid on such manufactured pipes - dutyconfirmed, goods confiscated, penalties imposed on the appellants - appeal toCESTAT.

HELD - On careful consideration of various provisions of the said work order, the mainappellant cannot be considered as a labour contractor, simply providing labourers forcertain work -it is clear that they have undertaken various fabrication work in terms ofwork order in their own account using the material supplied by the main contractor -the original authority exhaustively examined this issue with the help of ratio laid-downin various decided cases -the Bench is in agreement with the findings as recorded bythe original authority - as such, the findings of the original authority regarding theduty liability of the main appellant with reference to manufacture of pipes and bendsis upheld - regarding the question of time-bar, it is noted that the appellants havedischarged central excise duty liability while undertaking similar activity atVishakhapatnam -further, their claim that the department is aware of their activity isnot correct -they are registered for payment of ST for the work of erection andcommission of the pipelines - payment of ST in terms of provision of Finance Act,1994 by itself will not absolve them from central excise duty liability for manufactureof any excisable items which might have been used in completion of the servicerendered by them -the Bench is in agreement with the findings of the originalauthority- regarding the claim of the main appellant for exemption under notificationno.3/2005, there is no legal basis to hold that the amendment carried-out throughnotification no.4/2011-CE in the said notification will have retrospective effectcovering the impugned period also - regarding the claim for exemption in terms ofnotification no.67/1995, the said exemption has no application as the main appellantis not using the capital goods in the factory of manufacture - the claim of the mainappellant for adjustment of central excise duty liability with the ST already paid isneither factually nor legally tenable -similarly, the claim of revenue neutrality is nottenable in the present case -the main appellant received, free of cost, the main rawmaterial and as such have not paid any central excise duty on such input -hence, thequestion of availing credit is not for consideration in the present proceedings - themain appellant contested the method of arriving at the value for central excise dutypurposes -the Bench finds force in their submission - on looking at the calculation ofduty liability as enclosed to the SCN, it is apparent that the claims of the mainappellant have not been considered in detail before quantification of duty liability bythe original authority - the main appellant contested the confiscation of detainedgoods and impostion of redemption fine for releasing the same - there is no specificfinding regarding seizure of the goods and whether the said goods were available atthe time of ordering confiscation - the main appellant has undertaken manufacture ofexcisable goods and are liable to pay duty -the demand for an extended period issustainable -however, the quantification of duty demand as well as the correctness offinding regarding confiscation and consequent redemption fine has to be re-examinedby the original authority - the second appellant has contested the imposition ofpenalty under rule 26 of the CER, 2002 - the second appellant is a limited company -in various decisions, the Tribunal has held that penalty under rule 26 can be imposed

only on individuals and not on companies - even otherwise, the original order did notbring out the existence of required ingredients attracting the provisions of the saidrule - the original authority is required to decide the case of penalty, afresh - theappeal filed by the main appellant is disposed of in terms of the observations recordedabove - the original authority is directed to re-decide the case to the limited aspect asmentioned above : CESTAT [para 6, 8, 9, 10, 11, 12, 13, 14, 15, 16]


Global Enterprises Vs CCE (Dated: July 4, 2017)

CX - The main appellant M/s.Global Enterprises [GE] are engaged inmanufacturing/trading of multi media speakers with or without FM radio - searcheswere conducted at their premises, goods seized - SCN issued to GE and variouspersons proposing classification of multi media speakers with woofer having FM radiounder CETH 85279990 and to be assessed under section 4A of the CEA - videimpugned order, multi media speakers without FM radio and with FM radio were heldclassifiable under CETH 85184000 and 85279990 respectively - multi media speakerswith FM radio were held to be assessable under section 4A - duty demand confirmedalong with interest - seized goods ordered to be confiscated with option to redeem onpayment of fine - penalty of equivalent amount of duty imposed on GE under section11AC of the CEA - penalties of Rs.1 lakh each imposed on the buyer companies underrule 26 of the CER, 2002 - revenue filed 6 appeals against the same impugned ordercontesting non-imposition of penalties under rule of CER, 2002 on 6 individuals fortheir role in non-payment of duty - another appeal is by M/s.Kaizen Computech Ltd.,engaged in trading of multi media speakers in their own brand name, againstimposition of penalty under rule 26 of CER, 2002.

HELD - There is no dispute about classification of multi media speakers without FMradio under CETH 85184000 - the dispute is only with reference to classification ofmulti media speakers with FM radio -the original authority fell in error in appreciatingthe factual details of the impugned goods, commercial parlance as to how it is broughtand sold and also applicable scope of tariff entries in terms of the provisions of sectionnote/chapter note - multi media speakers with built in FM radio basically contains twospeakers and a woofer - FM radio is built in, in the woofer - he whole set is a multimedia speaker system generally connected to other devices like computers or audioplayers for sound output -a comparison of the above goods with multi media speakers+ sub-woofer, without FM radio, indicates that both the products are almost identicalexcept for the fact that in one, there is a an additional built in FM radio, in the sub-woofer -the Bench is not in agreement with the lower authority in the conclusion thatthe speaker system combined with sub-woofer having built in FM radio, attains clearlydefined function of an FM radio rather than a speaker system -in a plain tradeparlance it is clear and apparent that a person intending to buy a multi media speakersystem will consider the impugned product for his requirement -the FM radio is anadded, in built feature - the main function of the product is being provided by speakersystem with sub-woofer - almost similar issue of classification of multi media speakershaving additional function of USB port and FM radio came up for consideration by theTribunal in the case of Logic India Trading Company - 2016-TIOL-1800-CESTAT-BANGwherein it was held that the impugned goods are speakers with added function andthe main role of the item, in question, remains amplifying the sound received fromoutside source or from inbuilt feature -applying the interpretative rules and sectionnote 3 of Section XVI, the Tribunal held that the product should be classified asspeakers only -the said decision is affirmed by the Supreme Court [ 2016 (342) E.L.T.A34 (S.C.)] - i n view of the above legal position, the impugned order regardingclassification of multi media speakers with added feature of FM radio is not sustainable-the product should continue to be classified as speakers - regarding the liability of GEfor CE duty in terms of Schedule III of CEA, heading 8518 (speakers) are not coveredin the said schedule for applying the provisions of "deemed manufacture" -accordingly, printing of brand name and packing of these products alone cannot beconsidered as manufacture -regarding manufacture of speakers with other's brandname, GE is affixing brand name of buyers on the speakers purchased fromM/s.Krishna Technologies and M/s.JMD Computers - applying the test of ‘manufacture'

as enumerated by the Supreme Court in the case of J.G.Glass Industries Ltd. - 2002-TIOL-112-SC-CX , it is found that mere printing of brand name or packing will notamount to manufacture in case where there is no legal concept of "deemedmanufacture", specifically provided by any provisions applicable to the said product -the impugned order is not sustainable on the question of classification of multi mediaspeakers and usage of brand name of others, without involving manufacture at thehands of GE - the applicability of SSI exemption for the products manufactured by GEhas to be re-verified with the details submitted by GE to arrive at duty liability, if any-- impugned order set aside and appeal of GE allowed on the above terms - in view ofthe above findings, the appeal against penalty under rule 26 of the CER, 2002 filed byM/s.Kaizen Computech Ltd. is also to be allowed - in view of the above findings withreference to GE, there is no merit in the appeals by Revenue for imposition of penaltyon various individuals -these appeals are dismissed : CESTAT [para 4, 5, 6, 7, 8, 9,10, 11, 12, 13, 14, 15]

2017-TIOL-2788-CESTAT-HYD

Bharathi Cement Corporation Pvt Ltd Vs CCE, C & ST (Dated: June 6, 2017)

CX - appellant herein in this case had availed CENVAT credit of Rs. 5,76,896/- whichwas considered by the common show-cause notice as amount which has been availedfraudulently with intention to evade Central Excise duty - Adjudicating authority hasrecorded that this is due to arithmetical error and error of judgment the credit hasbeen taken twice - Adjudicating authority while dropping major amount of demands asunsustainable has imposed equivalent amount of penalty on assessee under provisionof Rule 15(2) of CCR, 2004 - Allegations in SCN are general in nature, like, thatassessee had availed CENVAT credit fraudulently with intention to evade duty - Inabsence of any specific allegations, issue seems to be covered by judgment of Apexcourt in case of Rajasthan Spinning and Weaving Mills 2009-TIOL-63-SC-CX - Dutyliability along with interest is upheld and penalty imposed by Adjudicating authority isset aside: CESTAT

2017-TIOL-2787-CESTAT-MAD

Premier Evolvics Pvt Ltd Vs CCE (Dated: April 13, 2017)

CX - Assessee had debited the amount totaling to Rs.26,58,407/- during two audits,on request of departmental officers - Subsequently, however, on introspection, theyapparently realized that there were no irregular removals or irregular availment ofmodvat credit in respect of said inputs/capital goods and that they were able to locatesupporting documents in respect of modvat credits of Rs.12,55,743/- paid partlythrough PLA and partly through RG.23-A, for which reason they had filed two refundclaims - Whole issue thus boils down to whether assessee indeed has evidence tosupport their assertion that there was no mischief afoot on their part - Both sidesagree that quantum of inputs and capital goods are very huge in number andconsequently, connected documents/records thereof are also voluminous - This forumdefinitely does not have wherewithal to examine all these documents individually andin detail to prove or disprove assertions of assessee/Revenue - Matter remanded tooriginal authority for causing such verification afresh - In case the assessee is able tosatisfactorily prove with documents and vindicate the correctness of their refundclaims with necessary documents including private records, and if he succeeds inmatter, it would obviously be concluded that there was no willful suppression inmatter, unless proved otherwise: CESTAT


Gemini Communication Ltd Vs CCE (Dated: May 8, 2017)

CX - Assessee were manufacturer of computer systems and allied products - A SCNwas issued on assessee proposing to demand duty under proviso to section 11A(1) ofCEA, 1944 with interest under section 11AB and equal penalty under section 11ACand another penalty under Rule 173Q of CER, 1944 on the grounds that assessee hadmanufactured and cleared computer systems in guise of trading of bought out itemsand evaded payment of duty - Assessee was indubitably supplying completedcomputer systems as per contract enjoined on them - This being so, whethercomplete computer system was assembled by him after procuring requiredcomponents, peripherals and accessories in his own premises or whether he does it atrented premises at Besant Nagar, Chennai or for that matter even at schools where heis supposed to supply the systems, will not make any difference to inevitability thatassessee is manufacturer of these goods - Duty liability cannot be escaped from -Original authority has been generous and considerate in allowing not only Rs.onecrore exemption limit of SSI but also has extended cum-duty benefit - In process,contract value has been also reduced for the purposes of duty levy - No reason foundto interfere with classification of computer systems under Chapter 8471 of CETA anddemand of differential excise duty along with interest thereof - Assessee haveattempted to weave a web of deceit with intent to suppress their value of dutiableclearances with intent to evade discharge of required duty liability to exchequer -Penalty under section 11AC of Act is therefore fully justified - However, penaltyimposed under Rule 173Q set aside: CESTAT


Mithailal Gupta Vs CCE (Dated: July 3, 2017)

CX-Refund of pre-deposit - Even though the Vasiyatnama mentions that the appellantwill inherit the tobacco business of Shri Ram Das Gupta, Proprietor after his death, theappellant has failed to produce the probate certificate issued by the appropriate courtin his favour confirming the fact that he is the legitimate successor of Shri Ram DasGupta for the purpose of claiming the refund amount - in the absence of such aprobate certificate issued by the appropriate court, no reason found to interfere withthe impugned order rejecting the refund claim- appeal is dismissed: CESTAT [para 8,9]


Mangalam Cement Ltd Vs CCE & ST (Dated: July 3, 2017)

CX - Dispute is with reference to the eligibility of cenvat credit ofST paid on freightcharges from the depot to the customer's premises– department of the view that thecredit for the input services will be allowable only upto the place of removal –appealto CESTAT.

HELD - Cement is cleared on payment of duty from the appellant's factory to thedepot from where it is sold to various customers – perusal of the purchase ordersreveal that the goods are delivered on FOR basis by the appellant - adjudicatingauthority in his O-i-O has also recorded the finding in para 5.3.3 that delivery ofgoods is on FOR basis -the amended definition of input services w.e.f. 1.4.2008 allowscenvat credit on input services only upto the place of removal -in the present case,since the delivery is on FOR basis, the place of removal is to be considered as thecustomer's premises -consequently, the ST paid on freight will be available -impugned order set and appeal allowed : CESTAT [para 5, 7]


Hindustan Zinc Ltd Vs CCE (Dated: July 4, 2017)

CX–Appellants are engaged in manufacture of zinc and lead concentrates and have a

concentration facility at Dariba where they are mining ores and concentrating thesame, before sending them to their captive smelters for use in mines -they aredrawing water from various dams in the vicinity of factory and pipelines have beenlaid from the tanks to the mines -cenvat credit of duty paid on such pipes was availedby the appellant -revenue of the view that such cenvat credit are not allowable sincethe pipes were not used in the factory of the appellant;that invoices were in the nameof contractor who executed the work of laying the pipeline for the appellant, hencecredit inadmissible – appeal to CESTAT.

HELD - Definition of ‘capital goods' as per rule 2(a) of CCR, 2004 clearly includes thepipes and fittings thereof used in the factory of the manufacturer - the mines were formining of ore and are captive mines attached to the appellants factory - the pipelinesfrom the dams, are for taking water to be used in mines - it is fairly well settled thatcaptive mines attached to the factory can be considered as a part of the factorypremises - since the pipe line is necessary for manufacturing process, such pipes willhave to be considered as having been used in the factory premises - cenvat creditallowable –invoices clearly indicate the appellantas consignee - no reason to denysuch credit – appeals allowed : CESTAT [para 5, 6, 7]

2017-TIOL-2780-CESTAT-BANG

Forbes Gokak Ltd Vs CCE , C & ST (Dated: May 3, 2017)

CX– Appellant, a 100% EOU, had manufactured and cleared cotton yarn out ofindigenous raw material to DTA on payment of duty at the rate of 8% BED byavailing notification no.55/91 instead of following the procedure laid downin notification no.8/97-CE dated 1.3.1997 as amended wherein the duty payable is theaggregate of the duties of excise liable under section 3 of CEA – SCN issueddemanding differential duty of Rs.3.57 lakh– duty confirmed, penalty of Rs.20,000/-imposed u/r 173Q of the CER, 1944 –Commissioner (Appeals) confirmed the demandbut dropped the penalty – appeal to CESTAT.

HELD - Circular dated 19.10.2000, clarifying that AED would be on yarn manufacturedby a 100% EOU from indigenous raw materials and cleared into DTA, has beenquashed by the Tribunal in the case of Indocount Choongnam Textiles Ltd. by relyingupon the decision of the Supreme Court in Nahar Industrial Enterprises Ltd. [ 2004-TIOL-68-SC-CX ] - further, the Board had issued a circular no.384/17/98 dated20.3.1998 wherein it has clarified that an assessee would be eligible to claimexemption either under notification no.8/97-CE dated 1.3.1997 or notificationno.55/1991-CE and the impugned order has failed to follow the directions of the Boardas well as the decision of the Tribunal cited above –It is settled law that when thereare two notifications available, it is the option of the assessee to follow any one ofthem which is more beneficial to him - impugned order is not sustainable in law and,therefore, set aside – appeal allowed : CESTAT [para 6]


Binjusaria Ispat Pvt Ltd Vs CCE, C & ST (Dated: March 23, 2017)

CX - Assessee engaged in manufacture of TMT Bars and Rods and are availing facilityof CENVAT credit on inputs and capital goods - At the time of setting up their plant,assessee availed CENVAT credit on MS plates, channels, Joists, Angles, Beams and HRCoils for period of April, 2004 to March, 2008 - On scrutiny of ER-1 returns, it wasnoticed by department that credit availed on MS items is not eligible under category ofcapital goods as these items do not fall within definition of capital goods - It is evidentthat assessee has disclosed all details regarding credit availed on MS items while filingER-1 returns - In addition, they have furnished certificate by a Chartered Engineerreflecting use of MS items in factory of assessee - Only ground on which thedepartment has sought to deny credit is on basis of judgment in case of VandanaGlobal Ltd. 2010-TIOL-624-CESTAT-DEL-LB wherein it was held that amendmentdated 07.07.2009 which restricted the use of M.S items is applicable retrospectively -

In the present case, period involved is prior to 07.07.2009 - In case of India CementsLtd., 2015-TIOL-650-HC-MAD-CX and SLR Steels Ltd. 2011-TIOL-892-HC-KAR-CX ,Courts held the issue in favour of assessee - Following said judgments, disallowanceof credit is unjustified: CESTAT


CCE Vs Crystal Corporation (Dated: January 11, 2017)

CX - Assessee engaged in design, fabrication, supply and installation of curtainwall/structural glazing i.e. fixation of a glass or an aluminium facade over buildings,so as to impart on them an appearance of having their walls made up of glass oraluminium around them - Proceedings were initiated against assessee to demand dutyin respect of manufacture of glazed panels in connection with execution of variousprojects - Revenue is substantially relying on decision of Tribunal in Mahindra &Mahindra and the existence of tariff entry 7610 to contest the findings in impugnedorder - Revenue has not brought out any evidence on aspect of common marketabilityof specific designed components before they are affixed in civil structure - From SCN,it is clear that duty demand is on glazed panels alleged to have been manufactured byassessee at site - There is no purchase order for such glazed panels by clients -Indivisible works contract talks about installation of glazed panels/curtain wall and notsupply of any glazed panels - Ratio followed in Mahindra & Mahindra has noapplication to the facts of the presenting case - No merit found in appeal by Revenue,same is dismissed: CESTAT


Decorpac India Pvt Ltd Vs CCE (Dated: February 7, 2017)

CX - Assessee engaged in manufacture of various printed paper products as well asprinted polyester labels - Various printed paper products manufactured by assesseesought to be classified under CETH 48211020 by Revenue as paper or paper boardlabels of all kinds, whether or not printed while assessee claim classification underCETH 49111030 as printed inlay cards coming under Heading - "other printed matter,including printed pictures and photographs" - Impugned order is very cryptic and didnot examine all legal provisions, more specifically chapter notes and HSN explanationalongwith nature of product manufactured by assessee - Impugned order has notgiven any detailed finding on any of points raised by assessee to arrive at correctclassification of products - Samples submitted by assessee are to be examined byOriginal Authority alongwith submissions made by assessee for a proper finding -Further, claim of assessee for exemption with reference to products cleared toexporters and who ultimately exported these goods with merchandise out of country,has to be examined for a finding: CESTAT

2017-TIOL-2768-CESTAT-MUM

Kalyani Carpenter Special Steels Ltd Vs CCE (Dated: May 23, 2017)

CX - Mere filing of the returns does not exempt the appellant from consequence of law- Grant of benefit of a notification is made at public cost and is an exception - Entry ofexemption is to be strictly construed - A claimant does not get liberal considerationwithout satisfying primary condition of grant - Without strict compliance to thelegislative mandate, appellant has liberally claimed exemption - proceedings not timebarred - order of Commissioner(A) denying benefit of notification 64/95-CE to Steelbars and rods supplied to VSSC & remanding the matter for adjustment of CENVATcredit reversed and imposition of interest and penalty accordingly is upheld - appealdisposed of: CESTAT [para 5 to 9]

Also see analysis of the order


Trimula Sponge Iron Pvt Ltd Vs CCE & ST (Dated: April 3, 2017)

CX-Appellants had taken cenvat credit in respect of duty paid on coal received bythem from suppliers - the adjudicating authority held that as the coal wasunconditionally exempt under notification no.63/95 dated 16.3.1995, the duty paidthereon cannot be construed as duty and, therefore, cenvat credit thereof isinadmissible : HELD - Appellants had taken credit of duty which is clearly shown in theinvoices of the suppliers - appellants being recipient of the goods are not in a positionto sit in judgment over the dutiability of the product which they have only boughtfrom supplier - following the decision of the Tribunal in the case of SKS Ispat andPower Ltd. vide final order no.54189/2015 dated 15.9.2015 , appeal allowed : CESTAT[para 3, 4]


Northern Coalfields Ltd Vs CCE (Dated: July 4, 2017)

CX-Appellant, a manufacturer of coal, availed cenvat credit on lubricating oil which isused in dumpers and heavy earth moving machines - revenue of the view thatappellant was not entitled to avail such credits since dumpers and other heavy earthmoving machines were not capital goods, classifiable under chapter 87 of the CETwhich have been specifically excluded from the list of capital goods - appeal toCESTAT.

HELD - Following the decision of the Tribunal in the case of Hindustan Zinc Ltd. whichwas decided vide Final Order No.A/54868/2016 dated 7.11.2016, impugned order setaside - appeal allowed: CESTAT [para 3, 4]


CCE Vs Box Packers (Dated: March 29, 2017)

CX - Assessee No.1, 2, 4 and 5 are engaged in manufacture of Corrugated Box andthe goods were exempted till 01.03.2003 - Assessee No. 3 is a trader and assessees6, 7 and 8 are individuals - It was the case of assessees before adjudicating authoritythat assessees 1, 2, 4 and 5 are independent units, they are procuring their own rawmaterials, working separately having separate plant & machinery, registered withvarious Government departments like Sales Tax, Income Tax, Service Tax, Propertyand Professional Tax - Adjudicating authority after following due process of lawdropped the proceedings initiated by said SCN - Whether adjudicating authority wascorrect in dropping the proceedings initiated by SCN for clubbing of clearances ofassessee No.1, 2, 4 and 5 and demanding duty and also for imposing penalties onother assessees - Factual findings of adjudicating authority have not beencontroverted by Revenue in their appeal by way of any contrary evidence and alsoindicates that adjudicating authority was correct in coming to a conclusion as todropping the allegations of proceedings initiated by SCN, Tribunal is fortified in itsviews by decision of Supreme Court in case of Sotex – 2006-TIOL-170-SC-CX and alsoHigh Court of Punjab and Haryana in case of Saron Mechanical Works 2015-TIOL-2764-HC-P&H-CX - Impugned order is correct and legal and does not suffer from anyinfirmity: CESTAT


Steer Engineering Pvt Ltd Vs CCE (Dated: November 30, 2016)

CX - Assessee engaged in manufacture of extruder machines and accessories andthey imported two extruder machines and availed cenvat credit of duty paid on thesemachines - Said machines were used only for demonstration purpose so as to explaintheir features to prospective customers of assessee, as assessee is also manufacturingthe same machine - During audit, it is observed that since the said imported machineswere not used " in or in relation to manufacture " as stipulated in Rule 2(a) of CCR2004, same cannot be termed as 'capital goods' for manufacture in factory - Definitionof " capital goods " what emanates is that such goods are to be used in factory ofmanufacturer of final products and nowhere it is stipulated that said goods are to beused " in or in relation to the manufacture of final products " - Both the lowerauthorities are reading a non-existent condition into definition of capital goods whichis impermissible - Impugned order is not sustainable in law and same is set aside byallowing the appeal of assessee: CESTAT

2017-TIOL-2763-CESTAT-CHD

Speedways Rubber Factory Vs CCE (Dated: April 6, 2017)

Central Excise - Exemption under Notification No 9/2002 CE and 9/2003 CE up toaggregate value of 1 crore - Contention of revenue that goods bearing brand nameshould be added for computing 1 crore.

Held: The appellant has put mark of M/s Director Transport, UT, Chandigarh and M/sChief General Manager, DTC, New Delhi i.e. CTU/DTC, therefore, its brand name ofanother person which is not includable in the clearance under Notification No. 9/2002for computing total clearance. (para 14)

The appellant were regularly filed their returns showing the clearance made to DTC orCTU and paying duty on higher rate on the said goods was in the knowledge of thedepartment. As the activity of clearance made by the appellant were in the knowledgeof the Revenue, the extended period of limitation is not invokable. Accordingly, thedemand raised against the appellant is barred by limitation. (para 18)


Sivagurunathan Textiles Ltd Vs CCE (Dated: March 24, 2017)

Central Excise – Clandestine removal of cotton yarn and polyester yarn – Demand onaccount on variation in stock as per book and physical verification during surprisecheck conducted by the officers.

Held: The claim of appellant that the shortages as attributable to pilferage does notappeal to common sense since, no prudent business entity would turn a blind eye toshortages of yarn as much as 142539 Kgs, approximating to 143 metric tons of yarnfrom the premises. The demand of Rs. 10,42,361/- made against STL on account ofthe shortages will necessarily sustain. (para 10.2)

There is no fault in the conclusion of the adjudicating authority that recordsmaintained by job worker (M/s BARU) and AR-3As, the invoices issued by them werefabricated and that they did not indicate the extent of cotton yarn converted into hankyarn by them. No lorry receipts or any other proof has been adduced by the appellantto corroborate the claim of return of hank yarn to them. Even in respect of quantityclaimed by Shri E.L. Gunasekhar, Proprietor of job worker unit, to have beenconverted from cotton yarn into hank yarn, he has nonetheless admitted that the saidgoods were not sent to STL but was sold to his customers. To put the final nail intothis masquerade is the revelation by Shri S. Nainar, Director of STL in his statementdated 18.07.2002, wherein it had been categorically stated that STL had received onlythe documents such as AR-3As, invoices raised by the job workers at Erode, and not

hank yarn as claimed. It is not forthcoming from the available records that said ShriNainar had at any time subsequently retracted his admissions; there is also nocontention of the appellant in this regard. (para 12.2)

Neither STL nor BARU have been able to convince that there was indeed movement ofcotton yarn for conversion from STL to BARU, that the entire quantity had beenconverted into hank yarn and that post conversion, the hank yarn was returned to STLor that such returned hank yarn after conversion, had been again transported tovarious buyers. In the event, the demand of Rs. 27,09,840/- being central exciseduty evaded on clandestine removals of cotton yarn in cheese form under the pretextof conversion to hank yarn, finds credibility - there is no infirmity in the confirmationof said duty demand made by the adjudicating authority. (para 12.5 & 12.6)

There has been unaccounted/clandestine removal of cotton yarn by STL subterfuge,suppression and wilful misstatement and collusion with BARU and RR Reeling Unit;with the sole intention of evading legitimate duty payable to the exchequer. Thecontentions of the appellant fail in all counts. On the other hand, investigation hassuccessfully unearthed the questionable modus operandi of the racket who has causedprejudice to Revenue with intent to evade excise duty. Investigation has proved thatclandestine removal of goods by the appellant was made following a pre-meditateddesign. Hence invocation of extended period of limitation in the notice under provisoto section 11A of the Central Excise Act and its affirmation in the impugned order isvery much in order and does not require interference. (para 14)

The demands of central excise duties of Rs.10,42,361/-, Rs.40,49,636/- 24,81,537/-totalling Rs.75,73,534/- under proviso to Section 11A of the Central Excise Act, alongwith interest liability thereon and imposition of equal penalty of Rs. 75,73,534/- isupheld and the appeal by STL in that regard dismissed. However, in view of equalpenalty having been imposed under Section 11AC, additional penalty of Rs.15,00,000/- imposed under erstwhile Rule 173Q/Rule 26 of Central Excise Rules is notrequired and hence the same is set aside – Penalty on the other appellants upheld.(para 15.2)

2017-TIOL-2753-CESTAT-KOL

Kumar Iron And Steel Company Vs CC & CE (Dated: December 2, 2016)

CX - Assessee engaged in manufacture of iron and steel products - Adjudicatingauthority disallowed CENVAT Credit along with interest and imposed penalty - Periodof dispute is April, 2000 to July, 2000 and SCN was issued on 27.02.2001 -Commissioner (A) upheld the Adjudication order - Issue is no more res integra in viewof decision of larger Bench of Tribunal in Balmer Lawrie 2002-TIOL-155-CESTAT-DEL-LB that after 01.04.1994, endorsed invoices were not valid documents for purpose ofMODVAT Credit - So, denial of CENVAT Credit is upheld and imposition of penalty isnot warranted: CESTAT


Vikas Spools Pvt Ltd Vs CCE (Dated: October 28, 2016)

CX - Assessee had allegedly cleared finished goods without payment of duty - Stockallegedly found to be short - Case of revenue is based on 'katcha parchies' - Revenuedid not consider those invoices which were placed on record by assessee and also notconsidered parchies issued by a job worker for assessee - Burning loss to beconsidered by revenue - Penalty imposed to be calculated again depending onquantity of short & excess finished goods: CESTAT (Para 8, 10, 11, 12, 13)

2017-TIOL-2751-CESTAT-ALL

Sundeep Electrodes Pvt Ltd Vs CCE (Dated: February 22, 2017)

CX - Assessee engaged in manufacture of welding electrodes & iron scrap & wasavailing cenvat credit on inputs - Revenue alleged that assessee did not reverse credittaken on goods lying in stock & goods in process, as is required under Rule 11(2) ofCCR - Held - Upon perusal of Rule 11(2) reversal of credit is conditional upon therebeing any unutilized credit in cenvat account prior to availing SSI exemption - Sinceassessee has nil balance in cenvat account, no credit is required to be reversed -Impugned order set aside: CESTAT (Para 3,6)


Gemsons Precisions Engineering Pvt Ltd Vs CCE (Dated: May 26, 2017)

CX - Rule 19 and notification 42/2001-CE(NT) nowhere lay down any condition ofpayment of foreign remittance against the export of goods - lower authority alsopointed out that the rejected goods were neither received back by the appellant nordestroyed, therefore, the appellant is required to pay the duty - Bench views thatonce the goods have been exported, even though the goods were rejected by thebuyer side, duty cannot be demanded as there is no condition provided under the lawthat once the goods are exported and if they are rejected the same should be broughtback by the assessee or should be destroyed - Demand of duty unsustainable -impugned order set aside and appeal allowed: CESTAT [para 4]



Bosch Chassis Systems India Ltd Vs CCE & ST (Dated: April 5, 2017)

Central Excise - Availment of CENVAT Credit on Supplementary invoices - Assesseehas three manufacturing units, and goods manufactured in two of them aretransferred to the other and assembled and cleared from there on payment of duty -proposed that appellant is not entitled to avail Cenvat credit on supplementaryinvoices on the ground that supplementary invoices do not satisfy the condition underRule 7(1) (b) / Rule 9(1)(b) of Cenvat Credit Rules, 2002/2004 as the appellant hasundervalued the goods cleared to the third unit - duty was paid before issuance ofSCN - the duty was short-paid on account of willful intention and therefore, coveredunder exception to Rule 7(1) (b)/ Rule 9(1)(b) of Cenvat Credit Rules, 2002/2004 -Hence, SCN issued on the ground that supplementary invoices do not satisfy thecondition under Rule 7(1)(b) /Rule 9(1)(b) of Cenvat Credit Rules - SNC wasadjudicated and the impugned order was passed by Commissioner - The appellantfiled appeal before this Tribunal and while passing the stay order, the Tribunalreferred the issue to Larger Bench which has been decided in favor of the appellant.

Held: Whether the appellant is entitled to avail Cenvat credit on supplementaryinvoices where allegation of suppression has not been proved - the amortized cost isnot required to be added in the value of the goods, in that circumstances,supplementary invoices is not required as the same has been issued and credit hasbeen taken and that there is no suppression of facts - Therefore, Cenvat credit cannotbe denied to the appellant on amortized cost of capital goods - With regard tosupplementary invoices issued by Jalgaon unit and the charge of under valuation, thecharges of suppression are not proved - Hence, cenvat credit cannot be denied interms of Rule 7(1)(b) /Rule 9(1)(b) of Cenvat Credit Rules, 2002/2004 - Appealallowed - (Para 5, & 6).


Maa Vindhyavashini Tobacco Pvt Ltd Vs CCE (Dated: April 13, 2017)

CX - The assessee is manufacturing and clearing Gutkha under the brand name'Madhu' - Both the products Gutkha & Branded Chewing Tobacco are specified/notifiedgoods and therefore CX duty is leviable on these products, on the basis of productioncapacity as determined under Section 3A of CEA, 1944 - Whether assessee haveoption to suo - moto take abatement of duty in respect of period of closure of factoryfor a continuous period of 15 days or more, without first depositing duty and withoutfiling any abatement claim before authorities - In view of decision of High Court incase of Thakkar Tobacco Products P. Ltd. 2015-TIOL-2545-HC-AHM-CX, in theabsence of any rule or provision or mode of availing abatement, without any order ofabatement, by appropriate authority, assessee could on their own calculate duty andset off same against duty payable in the next month and such action of assessee isnot violative of any rule or any provision of law - Whole issue is revenue neutral -Thus, no fault can be found in approach of assessee in taking suo - moto the benefitof such abatement: CESTAT


Dhampur Sugar Mills Ltd Vs CCE (Dated: March 16, 2017)

CX - Whether Cenvat credit can be taken on certain services, when invoice is issued inname of assessee and service have been availed at Head Office situated at Delhi aswell as with respect to invoices issued in name of Head Office and services received atassessee's factory - As regards to disallowance of credit on telephone bills installed atresidence of officers, and schools maintained by assessee, in close vicinity of factory,is that school is run and maintained by assessee and mostly children of workers arestudying there and, hence, disallowance is bad - In respect of invoices issued in nameof assessee and services have been availed at Head Office, in assessee's own case,this Tribunal have held that such credits is fully allowable as Corporate or Head Officeexists for smooth running of business of assessee company, which is mainly tofacilitate its operations of production and sale - So far the invoices raised in name ofHead Office, but services have been received at factory of assessee company, suchcredit is fully allowable as at best, is only a procedural lapse: CESTAT


Vishwam Industries Vs CCE, C & ST (Dated: February 8, 2017)

CX - Assessee is a proprietary concern solely engaged in manufacture of CananKinetiser on job work basis - As per intelligence report, assessee has obtained CentralExcise Registration and is not paying duty on branded excisable goods manufacturedand cleared by them - On investigation, a SCN was issued to assessee and demandwas confirmed and also imposed penalties - Assessee who is a sole partnershipconcern of Shri V.P. Viswanathan Nair who as per death certificate has died on29.05.2015 when appeal was pending before Tribunal - In view of decision ofSupreme Court in case of Shabina Abraham 2015-TIOL-159-SC-CX wherein SupremeCourt has held that no recovery proceedings can be initiated against dead person,present appeal abates and is accordingly disposed off: CESTAT


Cipsa - Ric India Pvt Ltd Vs CCE (Dated: March 31, 2017)

CX - Assessee engaged in manufacturing and clearance of printed circuit boards -They were denied the CENVAT credit availed on courier service as it was notconsidered as input service - Demand for reversal of CENVAT credit was raised on

assessee along with interest.

Held - By considering the case of Radical Instruments 2015-TIOL-2019-CESTAT-DEL &Ambuja Cement Ltd 2009-TIOL-110-HC-P&H-ST courier service was considered asinput service and CENVAT credit availed on it was held justified: CESTAT ( Para 2,4,7)


Bharat Petroleum Corporation Ltd Vs CCE, C & ST (Dated: April 25, 2017)

CX - Assessee engaged in refining and marketing of petroleum products - Assesseeunder Notfn. No. 6/2002-CE was allowed to remove the petroleum products withexecution of bond without payment of duty to the storage point which was warehousehowever duty was required to be paid at the time of removal of petroleum productsfrom the storage point - Central Govt. withdrew the benefit of Notfn. No.17/2004-CE(NT) and revenue alleged that despite of the withdrawal assessee clearedpetroleum products to KDPP and KPCL - SCN was issued demanding duty which waschallenged by the assessee and mentioned that though the Notfn. No.17/2004-CE(NT)withdrawn the benefit but withdrawal not affected the availability of exemption asclarified in para 4 of the Circular No.796/29/2004-CX under which the customer waseligible to receive the petroleum product without payment of duty was not withdrawnand exemption would still be available however when assessee filed the appeal beforethe Commr. it was rejected and demand was upheld -Held-Since the goods lying instock at installation were cleared only to KDPP and KPCL who were entitled toexemption based on the end-use certificate and this fact was an admitted facttherefore by considering the case of BPCL the petroleum product cleared by assesseewas eligible for exemption at the time of removal and no duty was payable on thequantity lying in stock at the installation consequent to withdrawal of warehousingfacility: CESTAT


ITI Ltd Vs CCE (Dated: June 29, 2017)

CX - Assessee were engaged in manufacture of telecom equipments - Refund claim ofassessee was rejected by Commissioner (A) on the ground that assessee did notproduce any documentary evidence that incidence of duty has not been passed on byassessee to their customers - Original Authority and Appellate Authority did not haveadvantage of certificate issued by Chartered Accountant for appreciation oftransactions between assessee and their customers - Certification of transactionsbetween assessee and their customers is essential for understanding as to whether inpractice of accounting as stated in said certificate dated 04/04/2017 is there anychance of higher duty incidence getting passed on to customer and assessee be in aposition to pay less excise duty to exchequer and get enriched by difference betweentwo through refund: CESTAT


Novozymes South Asia Pvt Ltd Vs CCE, C & ST (Dated: February 27, 2017)

CX - Assessee availed input credit wrongly twice and when it was pointed, same wasreversed with interest of Rs.82,256/- which was paid on 19.2.2008 and SCN was onlyissued to demand balance amount of interest of Rs.80,206/- and for imposing penaltyunder Rule 15 r/w Section 11AC of CEA, 1944 - Balance amount was deposited byassessee on direction of CESTAT - Further, in SCN, Revenue has not alleged anysuppression or fraud or willful misstatement with intention to avail irregular credit,and; as and when it was pointed out, same was reversed - Since there was no

allegation of suppression, therefore extended period of limitation is wrongly invokedto impose penalty on assessee as necessary ingredient of Section 11AC is missing:CESTAT


Seshasayee Paper And Board Ltd Vs CCE & ST (Dated: May 19, 2017)

CX - Assessee engaged in manufacture of papers and for purpose of export of theirfinal products, assessee utilized the services of Foreign Commission Agent - Assesseewas admittedly registered with ST department for discharge of their tax liability inrespect of services of Foreign Commission Agents - However, instead of paying ST onfull amount of commission paid by them - There is no explanation coming forth fromassessee as to why the value of services was not fully reflected and as to why tax wasnot paid on full value of services - Fact of suppression of part of service value came toforefront only with audit conducted in assessee's premises - As such, it becomes clearthat value of services was suppressed without any justifiable and any reasonablecause and there was malafide on part of assesse - Penalty imposed upon assesseerequires no further reduction: CESTAT


Balmer Lawrie And Company Ltd Vs CCE (Dated: July 3, 2017)

CX - Rule 2(l) of CCR, 2002 - Setting up of factory also includes the storage place inthe factory premises - services of erection, commission and installation forconstructing temporary shed to store finished goods is an Input service - creditadmissible - impugned order set aside and appeal allowed: CESTAT [para 5, 6]



Laxmi Organic Industries Ltd Vs CCE (Dated: April 24, 2017)

CX - CENVAT credit in respect of input services was disallowed on the grounds that -(a) invoice of input service is in the name of the head office, appellant have notobtained the Input Service Distribution (ISD) registration (b) input service wasreceived and used at head office and various other locations i.e. depot of theappellant(c) the appellant also carried out trading activity (d) in some of the invoicesthe service providers' registration number is not mentioned- appeal to CESTAT.

HELD -(a) E ven though the invoices are in the name of head office, services werereceived and used in or in relation to the manufacturing and the business activity ofthe appellant unit as they have only one manufacturing unit - in the procedure ofinput service distributors, there is no fresh payment of ST involved, it is only for thepurpose of the ST which was already paid in respect of the services provided by theservice provider thatis passed on to the respective units - therefore, it is nothing butprocedural requirement - merely because ISD registration is not obtained cenvatcredit cannot be denied to the assessee's manufacturing unit - credit cannot bedenied.

(b) the overall activity of the appellant is manufacturing of goods in the appellant'sfactory, storage thereof and sale of the said goods either from the factory or from thedifferent storage points and branches -therefore, even though the services werereceived at different locations, the cenvat credit is allowable on the ground that all thelocations are working in or in relation to storage and or sale of the goods

manufactured by the appellant unit - as per the definition of input service as existedduring the impugned period, the activities related to the business is also defined asinput service, therefore, for this reason alsocenvat credit cannot be denied.

(c) as regard the trading activity, appellant has conceded that they are prepared toreverse the cenvat credit proportionate to percentage of trading turnover -therefore,cenvat credit proportionate to the percentage of trading turnover, as per thesatisfaction of the adjudicating authority, is recoverable from the appellant -however,the Bench does not propose any penalty.

(d) as regard the issue that in certain cases the invoice of the service providers do notbear the registration number, there is no allegation that under the said invoice ST wasnot discharged - therefore, merely because registration number of the serviceprovider has not been mentioned, this alone cannot be reason for the denial of credit.

Appeal is partly allowed in the above terms : CESTAT [para 5, 6, 7, 8]


Litaka Pharmaceuticals Ltd Vs CCE (Dated: April 24, 2017)

CX- Appellant, engaged in the manufacture of pharmaceutical goods, viz.Oxytetracycle Hydrochloride Capsule 500 mg., filed classification under chapter3003.10 - department's case is that as per the earlier O-i-O, appellant wassupposedto pay correct excise duty @16% which they failed to do so -accordingly, SCN dated30.1.1999 was issued proposing classification under sub heading 3003.20 - the basisof SCN is that as per the Supreme Court decision in case of Astra Pharmaceuticals -[2002-TIOL-248-SC-CX], the distinction between "House Mark and "Trade/BrandName" has been clearly made - the adjudicating authority confirmed the demand ofdifferential duty, imposed penalty under rule 173Q of the CER, 1944, and demandedinterest under section 11AA of the CEA -Commissioner (Appeal) rejected the appealon an altogether different ground that the logo of Pfizer appears on the product, thusit has to be classified under CSH 3003.10 of the CET attracting BED @ 16% -appellant before CESTAT.

HELD -An identical issue has been considered by the coordinate Bench of this Tribunalwherein in case of M/s.Pfizer Ltd., vide Order No.A/85566/16/EB dated 13.1.2016, theimpugned product was held classifiable under 3003.20 as medicament other than theP&P medicament - therefore,the ratio of the aforesaid decision of this Tribunal isclearly applicable - on scanning the label of the product, it can be seen that name ofthe product is Oxytetracycline Capsules I.P. 500mg which is generic name andappearing in the Indian pharmacopoeia, therefore, this product is not P&P Medicamentby any stretch of imagination -as regards the contention of the Commissioner(Appeals) that the logo of Pfizer is appearing on the product, therefore, it is P&PMedicament, the Bench rejects this contention for the reason that Pfizer is not thename of the product but it is only house mark and name of the product is onlyOxytetrcycline Capsules I.P. 500mg which is generic name -affixing logo of the housemark does not make medicament as P&P medicament as held by the Supreme Courtin Astra Pharmaceuticals - moreover, this issue of logo of Pfizer does not flow fromthe SCN or from the adjudication order -therefore, it is not open to the Commissionerto create a new case at the appeal stage -for this reason also, the order is notsustainable -impugned order is set aside -appeal is allowed : CESTAT [para 5]


Oil And Natural Gas Corporation Ltd Vs CCE (Dated: February 16, 2017)

CX –Whether a manufacturer of LPG selling the product in bulk, post 1.7.2000, to an

Oil Marketing Company [OMC] for further sale in packed form to dealers/domesticconsumers and recovering ex-refinery price from the OMC as sale consideration isentitled to adopt ex-storage price (APM price) as the assessable value of the saidproduct in bulk by ignoring the provisions of Section 4 of the Central Excise Act asamended w.e.f. 1.7.-2000 – this issue in the present appeals itself was referred to theLarger bench of this Tribunal and the Larger Bench vide Order dated 10.9.2015 by 2:1majority answered the reference as under: "in view of the majority order, it is heldthat appellant has to discharge the excise duty on the transaction value which iscollected from the OMC by issuing commercial invoices during the disputed period” –hence, the differential duty demand stands confirmedand the matter has come to thedivision bench to pass final order – As the merit of the issue has been decided by theLarger Bench vide order dated 10.9.2015, therefore, differential duty raisedperiodically in the various SCNs notices involved stand confirmed - the only issue tobe decided is whether penalty under section 11AC of the CEA, 1944 and penalty underrule 25 of CER, 2002are legal and correct - taking into consideration the fact of thepresent case, it is found that SCNs were issued periodically for normal period,therefore, there was no suppression of facts -since the ingredient required forinvoking section 11AC does not exist in the present case, consequential penalty underrule 25 of the Rules is also not imposable as no malafide intention is proved againstappellant - appellant has made out a fit case for waiver of penalties imposed by theAdjudicating authority –penalties are set aside - appeals are partly allowed : CESTAT[para 5]


Saptashrungi Steel Rolling Mills Pvt Ltd Vs CCE & C (Dated: April 11, 2017)

CX– Case of the department is that appellant had cleared 187 MT of TMT bars to oneBroker Shri Umesh Modi without payment of duty – accordingly, the demand of dutyof Rs.6.03 lakhs and equal penalty was confirmed – penalty of Rs.1.5 lakh was alsoimposed on Shri M.S.Tank, Director of the appellant company – charge of clandestineremoval was based on the seized records from Shri Umesh Modi wherein the details ofreceipt of clandestinely cleared goods were appearing – appeal to CESTAT.

HELD –Records recovered from Shri Umesh Modi shows the name of supplier and thequantity cleared clandestinely by the various companies - only in the case of entrywhich was related to the appellant, shows name of GA - however, GA neither indicatesthe name of the factory nor the person -this record cannot be said to be conclusiveevidence that entry against initial ‘GA' is related to the appellant - since record itselfdoes not show the name of the appellant, Shri Umesh Modi's statement stating thatGA represents the appellant company cannot be relied upon – being third partystatement particularly when the appellant have asked for the cross examination andsame was not granted, the said statement cannot be relied upon - as regards thechart of cash receipt of end users, there is no acceptance by appellant company ofreceipt of cash as regards the alleged clandestine clearances – therefore, adjudicatingauthority stating that cash transaction is also proof, as per para 10 of the SCN, isincorrect – as regards the statement of Shri Mahendra Tank, he has subsequentlyretracted the same - it was necessary for the adjudicating authority to examine himbefore relying upon his statement – therefore, such statement without followingprocedure as provided under section 9D of the CEA cannot be relied upon – except theabove evidences there is no inquiry or investigation carried out in the factory premisesof the appellant and no incriminating documents were recovered from the premises ofthe appellant company -charge of clandestine removal should be established beyondany doubt on the basis of tangible evidences which adjudicating authority failed toprove - department could not establish the case of the clandestine removal againstthe appellant company –therefore, impugned order is set aside -appeals are allowed :CESTAT [para 5]


TK Warana Sahakari Sakhar Karkhana Ltd Vs CCE (Dated: February 28, 2017)

CX–Issue relates to classification of 'sugar' manufactured by the appellants – dutyconfirmed with interest thereon and penalty imposed under section 11AC of the CEA -commerce in 'sugar' was regulated by the provisions of the Essential CommoditiesAct, 1955 and required to conform to the mandates of Levy Sugar Supply (Control)Order 1979 under which the manufacturer was mandated to supply a portion of theirproduction to the Central Government or in such manner as directed by the CentralGovernment -for the relevant period, the levy component was 40%, 30% and 15%respectively -levy sugar was subject to duty of Rs.52 per quintal under heading1701.31 while the non-levy sugar was subjected to duty of Rs.85 per quintal underheading 1701.39 of the CET - duty was sought to be recovered from appellant byrestricting the application of lower duty to the above specific percentage of production– appeal to CESTAT.

HELD - From the records, the fact appears to be that appellants had cleared sugar at'levy' rate which was sought to be denied by central excise authorities – on perusal ofthe tariff headings 1701.31 and 1701.39 of the CET, it would appear that thedistinction between the rival entries is the invoking of the Essential Commodities Act,1955 compelling manufacturer to comply with direction of the Central Government -the impugned order admits that appellant had no choice but to supply sugar that wasotherwise to be sold as 'free sale', as 'levy sugar' - in such circumstances, the sale bythe appellant cannot but be under 'levy' category - in view of the above and thedecision of the Tribunal in the case of Daulat SSK Ltd., it is found that the demand ofduty is without authority of law and is set aside - appeal is allowed : CESTAT [para 9,11, 13]

2017-TIOL-2717-CESTAT-AHM

United Phosphorous Ltd Vs CCE & C (Dated: June 29, 2017)

CX - Assessee is manufacturer of excisable goods and had availed credit - Allegingthat credit availed on invoices which are not in accordance with provisions of CCR,2004 accordingly, notice was issued for recovery of credit with intrerest and penalty -As far as credit on attested copy of bill of entry is concerned, after the assessee lostrelevant copy of bill of entry necessary for availing CENVAT credit, they obtainedattested copy of bill of entry from Customs authority - It is found that there is nodispute on issue of receipt of goods mentioned under said bill of entry and also itsuse, hence, considering the law settled in judgments in cases of Steelco Gujarat Ltd.2010-TIOL-256-HC-AHM-CX and Balkrishna Industries Ltd. 2015-TIOL-2697-CESTAT-DEL, credit availed on duty paid as mentioned in attested copy of Bill of Entry isadmissible to them: CESTAT


Polydrug Laboratories Pvt Ltd Vs CCE (Dated: July 3, 2017)

CX - Rule 2(k) of CCR, 2004 - Paver blocks used for repair of factory road cannot besaid to have been used in or in relation to the manufacture of final product - As perExplanation 2 of the definition of 'input' all the goods used for construction of factoryshed or laying of foundation have been excluded, road of the factory premises issimilar to the construction activity; accordingly, it falls under the exclusion category -paver blocks does not qualify as an input - CENVAT credit rightly denied - impugnedorder upheld and appeal dismissed: CESTAT [para 4, 5]



CCE, C & ST Vs Uttam Galva Steel Ltd (Dated: April 24, 2017)

CX–The original authority held that the credit of tax paid on services related tohandling of goods outside the factory, but up to and until export of goods, could notbe availed by respondent owing to the restricted scope of the definition of 'inputservice' in rule 2(l) of the CCR, 2004–Commissioner (Appeals), set aside the order ofthe original authority and, therefore, revenue in appeal before CESTAT.

HELD - Considering that the goods are permitted to be deposited without payment ofduty at the port of export, it would appear that the 'place of removal' in relation toexported goods is not the factory but beyond -any service used till the place ofremoval would qualify as an 'input service'-there can be no cavil about the availmentof credit of any tax that has been paid in connection with such input services - therecan be no dispute that the services on which credit of tax paid was taken had beenrendered to the respondent -to the extent that this credit has been taken on servicesthat are not ineligible for inclusion as 'input services', the availment of credit cannotbe objected to - appeal of revenue is dismissed [para 5, 7, 8]


Mahindra and Mahindra Ltd Vs CCE (Dated: April 11, 2017)

CX - Appellants are engaged in the manufacture of tractors, IC engines and parts -they were paying duty on the value arrived on cost construction basis which is basedon cost certificate issued by cost accountant -it was observed that the appellant hadbeen taking the material cost of the inputs based on the cost standards as on 31 stMarch of the previous accounting year instead of the weighted average cost or themoving average cost of the current period with reference to the clearance date -similarly, the freight and octroi cost factor, R&D expenses cost factor both have beentaken based on accounting period of the previous year but not of the current year -also the conversion expenses cost was taken based on the accounting for the periodof the first 9 months of the previous year and not of the current period -appellantwere, therefore, clearing the goods for captive consumption on payment of duty basedon the assessable value of the previous year audited cost price -it was contended inthe SCN that as per Rule 8 of Central Excise Valuation Rules, 2000 the value shouldbe 110% /115% as applicable of the cost of manufacture of such goods -accordingly,there was a short payment of duty the same was proposed to be demanded - theadjudicating authority confirmed the demand and imposed penalty and interest -assessee filed the present appeal - as regards appeal E/2222/06 the facts involved isIC engine manufactured and supplied to their Nashik plant for which they filed theprice list in Proforma I -the contention of the department is that the appellants arealso selling IC engine in the local market -therefore, the comparable price of the ICengine is available and the same is applicable in case of supplies made to their Nashikplant for captive consumption - demand made of differential duty - appeal to CESTAT.

HELD - Appellant is manufacturing and clearing IC engine and parts of tractors to theirown unit located at Nagpur and Rudrapur - Nagpur and Rudrapur units aremanufacturing tractors by using the IC engine parts supplied by the appellant -theyare clearing the goods on payment of duty - Nagpur and Rudrapur are availing cenvatcredit and as per the submission of the appellant during the relevant period theNagpur and Rudrapur have paid excise duty from PLA to the tune of Rs.6.88 croresand Rs.113.53 crores - therefore, even if the duty as demanded in the SCN wouldhave been paid by the appellant, the same was available as cenvat credit to theirNagpur and Rudrapur units; that there was neither gain nor loss either to revenue orto the assessee -in the appellant's own case, this Tribunal has considered the issue inhand and the appeal was allowed vide order dated 16.1.2017 - in view of theTribunal's order in appellant's own case, the issue is no longer res integra - therefore,the impugned order, on the ground of revenue neutrality, is not sustainable, hencesame is set aside - appeals are allowed : CESTAT [para 9, 12]


Centuary Enka Ltd Vs CCE (Dated: February 28, 2017)

CX –Appellant opted for provisional assessment for the year 2003-04 - the provisionalassessment was finalised by the proper officer vide order dated 28.4.2005 - in thesaid final assessment order, the assessing authority raised demand of duty ofRs.37.25 lakhs on comparison of duty paid and payable on monthly basis – appellantfiled appeal before the Commissioner (Appeals) on the ground that since theprovisional assessment is for the entire year 2003-04, the total duty paid during thesaid year should have been considered against the duty payable in the finalassessment – vide impugned order, the Commissioner (Appeals) rejected the appeal,therefore, appeal to CESTAT.

HELD –In view of rule 7 of CER, 2002it is clear that at the time of the finalization ofthe assessment, total duty paid/payable has to be taken in to account and if there isnet amount either short paid or excess paid, only that amount will be available eitherfor recovery or refund – therefore, final assessment is done in consolidation in respectof clearances made in particular financial year -there is no specific provision in rule 7of the Rules that finalization of assessment shall be done either on consignment basisor monthly basis –therefore, the Asstt. Commissioner, suo-moto assessing the dutyon monthly basis and wherever there is short payment, demand raised ignoring theexcess paid duty is not permitted -issue is also no more res integra, accordingly,adjustment of excess paid duty against short paid duty is permissible for the entireyear i.e. 2003-04 at the time of finalization of the assessment - impugned order is notsustainable and same is set aside -the assessing authority is at liberty to quantify thecorrect duty liability, if any, following the above observation -appeal is allowed in theabove terms : CESTAT [para 5]


CEAT Ltd Vs CCE (Dated: April 28, 2017)

CX - Appellant have been paying excise duty on provisional basis for the reason thatthey were claiming various discounts to arrive at the assessable value by filing pricedeclaration -during the period 1974 to 1983 appellant filed refund claim being exciseduty paid on certain post manufacturing expenses (PME) - that matter travelled up tothe Supreme Court - after a series of litigation, the Asstt. Commissioner, vide orderdated 25.5.2007 rejected the refund claim of Rs.39.65 lakhs filed by the appellant on23.4.2004 on time bar as well as unjust enrichment - on appeal, the Commissioner(Appeals) upheld this order - appellant before CESTAT.

HELD - Initially, when the duty demand was determined by allowing/disallowingdeduction claim by the appellant the matter travelled up to Supreme Court andthereafter quantification of the demand of duty was made by the department andagain same was challenged by the appellant before the Supreme Court -in thesubsequent proceedings and earlier proceedings, the SCN was issued and demandwas raised, then the matter travelled up to Tribunal where the appeal of the appellantwas allowed -therefore, entire issue of valuation and consequential determination ofduty has finally came to an end only after Tribunal's order -the Tribunal's order waspassed on 12.11.2003, therefore, refund arises only thereafter, hence refund claimfiled on 23.4.2004 is within the time limit -moreover, if it is presumed that finalizationof assessment is done in the year 1997, the appellant even at that stage throughletter dated 11.6.1998 lodged their claim - from the above letter, it can be seen thatappellant have lodged their claim of Rs.39.65 lakhs which is involved in the presentcase -claim filed way back on 11.6.1998 vide the said letter should also be treated asrefund claim -for this reason also, refund claim is not time barred -as regards unjustenrichment, it is admitted in the adjudication that assessment was finalised on15.7.1984 and by way of corrigendum dated 15.10.1984, and necessary adjustment

of duty was made on 18.7.1997, therefore the present refund claim is arising out ofthe deposited amount of provisional assessment -therefore, refund which is arisingout of finalization of assessment will not be governed by the provisions of unjustenrichment as held by the Larger bench in the case of Hindustan Zinc Ltd.- it was alsoheld in the case of CEAT Ltd.[2016 (331) ELT 456 (Tri.-Mum)] that in case refundclaim arising out of the finalization of the assessment, the provisions of unjustenrichment is not applicable as specific provision of unjust enrichment was brought inRule 9B of the CER, 1944 w.e.f. 26.6.1999 -the present period is for 1974 to 1983,hence unjust enrichment is not applicable-moreoever, in the facts of the present case,assessment was provisional, duty was paid in excess after clearance of the goods -therefore, for this reason also, incidence of duty cannot be said to have been passedon to any other person- for this reason also unjust enrichment is not applicable -refund claim is neither hit by time bar nor hit by unjust enrichment -appeal is allowed: CESTAT [para 5]


Nitin Spinners Ltd Vs CCE (Dated: June 6, 2017)

CX - The appellant-assessee, engaged in the manufacture of cotton yarn and knittedfabrics and earlier operating under 100% EOU scheme, were allowed by thejurisdictional Development Commissioner, Noida to opt out of EOU scheme andoperate under EPCG scheme in terms of para 6.18 of Foreign Trade Policy - during thecourse of verification of records of the appellant-assessee, it was noticed that theyhave paid duty @ 3.09% on the capital goods and spares/accessories in terms ofnotification no.64/2008-Cus. dated 9.5.2008 -it appeared that the appellant have notdischarged correct duty on the capital goods/ spares parts procured indigenously -accordingly, the Revenue proceeded against the appellant-assessee, alleging shortpayment of CE duty on indigenous capital goods/spares parts/accessories, during thecourse of debonding of EOU unit - SCN issued demanding CE duty of Rs.7.31 croreand customs duty of Rs.22.26 lakhs in respect of imported spare parts alleging thesame were not includible in the EPCG benefit - the original authority, vide impugnedorder, held that indigenously procured capital goods could be de-bonded under theEPCG scheme on payment of CE duty of 14% and not 3% as contended by appellant-assessee and CE duty of Rs.6.63 crore was confirmed - he further held thatdepreciation is to be calculated based on rates prevailing on the date of debondingand not on the rates prevailing on the date of receipt of the capital goods ascontended by revenue and further held that certain items (like fire control systems,water storage tank, etc.) fall under the definition of capital goods and eligible fordepreciation and demand of CE duty of Rs.68.03 lakhs on this count was dropped - hefurther held that imported spare parts were included in the EPCG licence forconcession and demand of customs duty of Rs.22.26 lakhs was dropped - appellant-assessee before CESTAT challenging the O-i-O to the extent it is against them -department before CESTAT challenging the findings given on issues where demandshave been dropped

HELD - Admittedly, in the present case, the appellant-assessee are entitled fordebonding as they have achieved positive NFE -accordingly, debonding waspermissible in terms of the notification no.22/2003-CE dated 31.3.2003 - notificationno.22/2003-CE is for providing exemption to goods brought into EOU -this notificationdoes not provide any exemption to the capital goods, spare parts etc. for supply underEPCG Scheme - the Bench is in agreement with the original authority regardingabsence of any exemption notification covering the situation to support the claim ofthe appellant-assessee for an exemption from Central Excise duty- the concept ofRevenue neutrality cannot be considered as a bar for non confirmation of tax dues,otherwise payable by the appellant-assessee - no merit in the appeal filed by theappellant-assessee against demand for differential duty on capital goods as confirmedby the impugned order [para 11, 13, 14]

In a similar case, Tribunal in the case of Pudumjee Plant Laboratores Ltd. [2013 (295)ELT 593 (Tri. Mum)] held that the rate of duty on the depreciated value should be on

the date of debonding under EPCG scheme - when the debonding is done in terms ofnotification no.22/2003-CE, then the rates of depreciation as prescribed in thenotification has been correctly applied - [para 15]

On careful consideration of paras 9.2 and 9.12 of Foreign Trade Policy as well as para6.6.1 (b) of Handbook of Procedure of Foreign Trade Policy, the original authorityconcluded that the items like cord can, fire control system, water storage tank etc. willfall within the scope of " capital goods " as understood in the trade parlance -accordingly, the original authority allowed depreciation applicable to capital goods anddropped the demand for differential duty on this account -the Bench is in agreementwith the reasons recorded by the impugned order [para 16]

Regarding, the spare parts and accessories procured from domestic sources and alsoimported, it is found that the original authority has recorded categorical reasons forextending the benefit to these items -the application dated 14.4.2008 filed by theappellant-assessee for EPCG authorisation gave details of various spares imported aswell as procured locally -on analysis of the authorisation as well as nature of items asrecorded in the impugned order, the Bench is in agreement with the findings of theoriginal authority regarding the eligibility of these items under EPCG Scheme -in thepresent appeal, the Revenue could not bring out any substantial issue either in fact orin law to interfere with the finding of the original authority [para 17]

The Revenue also raised the point regarding non imposition of penalty under rule 25of the Central Excise Rules, 2002by the original authority - in the impugned order,it isclearly recorded that the appellant-assessee have not breached any of the provisionsof rule 25 of CER as they have not removed the excisable goods in contravention ofany of the Rules - no reason found to interfere with the categorical finding of theoriginal authority -as such, no merit found in the appeal filed by the Revenue [para18]

The impugned order is as per law and same is upheld -the appeals filed by theappellant-assessee as well as Revenue are rejected: CESTAT[para 19]


Chang Yun India Ltd Vs CCE (Dated: June 5, 2017)

CX - Assessee is manufacturing excisable goods and during course of their activitythey received certain services - Cenvat credit sought to denied to assessee on variousservices - As regard to Tour Operator service, said service has been used for bookingof air tickets for purpose of employees for business promotion and customer supportwhich is having direct nexus with manufacturing of excisable goods, thus assessee isentitled to Cenvat credit on Tour Operator service - With regard to renting ofimmovable property, although assessee has reversed cenvat credit attributable topremises let out to sister concern, but it is fact on record that assessee is paying STon rent paid to service provider and also paid ST for rent received from sister unit -Assessee itself is a service provider and is entitled to avail Cenvat credit as inputservice for providing output service.

Cenvat credit cannot be denied to assessee on the ground that debit note is not anadmissible document for availment of Cenvat credit - Services namely, Management &Maintenance or Repair service, Architect service and Training service has been usedby assessee for their business of manufacturing and same cannot be denied toassessee - Relying on decision of Bombay High Court in case of Ultratech CementLimited - 2010-TIOL-745-HC-MUM-ST , it is held that assessee is entitled for Cenvatcredit and had taken Cenvat correctly: CESTAT


Met Plast India Vs CCE (Dated: July 12, 2017)

CX – Segregation of shredded mixed metal scrap - Once the excise duty has beenpaid on the final product (segregated scrap) and same is not under dispute, CENVATcredit on the input stage cannot be denied on the ground that the activity ofsegregation is not manufacture u/s 2(f) of the CEA, 1944 – impugned order set asideand appeals allowed: CESTAT [para 5]



CCE Vs DP Ispat Pvt Ltd (Dated: April 7, 2017)

CX - Respondent, during the years 2000-01 to 2004-05, were availing SSI exemptionunder notification no.8/2000-CE dated 1.3.2000 and notification 8/2003-CE dated1.3.2003 - they availed cenvat credit of duty paid on inputs received in the factory forthe manufacture of finished goods - at the end of the year, some inputs in processand finished goods were lying in stock and from 1 st April every year they were optingfor the above referred SSI exemption - in view of rule 11(2) of Cenvat Credit Rules,2004, SCN was issued to the respondent demanding the amount of cenvat creditattributed to the stock of inputs and/or input contained in the stock of finished goodsas on date of exercising the option of exemption every year - the adjudicatingauthority confirmed the demand - however, the Commissioner (Appeals) dropped thedemand and allowed assessee appeal - revenue before CESTAT.

HELD -In the case of Pushpaman Forgings [ 2002-TIOL-276-CESTAT-MUM ], theTribunal held that in absence of any machinery provision, the amount cannot berecovered - to overcome this decision, the government in relation to the provision ofrule 57CC brought a retrospective amendment by which a machinery provision wasmade for recovery of the amount which is required to be paid in terms of rule 57CC -however, in the present case, reversal of credit is provided under rule 57AG(2), rule9(2) and rule 11(2) -but in relation to the payment provided under these rules, therewas no machinery provision for recovery of the said amount - even subsequently also,unlike rule 57CC, no retrospective provision was brought in the statute -consideringthis position, the Commissioner (Appeals) dropped the demand by allowing the appealof the respondent - the finding of the Commissioner (Appeals) is absolutely correct inaccordance with law prevailing at the time - no infirmity found therein - impugnedorder upheld and revenue's appeal dismissed : CESTAT [para 4, 5]


Ahmednagar Forgings Ltd Vs CCE (Dated: March 22, 2017)

CX - Issue that falls for consideration in this case is regarding availment of cenvatcredit on ST paid on the services provided by M/s.PL Advisory Services Pvt. Ltd. [PLA]under the category of ‘Banking & Other Financial Services' on account of advisory andplacement charges relating to private placement of equity shares during January 2007- the said M/s PLA raised bill on the appellant for the services rendered and alsocharged ST of Rs.47.29 lakhs of which the appellant took cenvat credit -revenue is ofthe opinion that such cenvat credit is not eligible as the services rendered does notfall under the category of input services and they were not in relation to themanufacturing of the final products and were rendered to appellant's head office, asalso the same has to be distributed to various manufacturing units - appeal toCESTAT.

HELD - It is undisputed that M/s PLA have placed preferential equity shares of theappellant for raising of funds/finance for the appellant -it is noticed from the recordsand more specifically from the O-i-A, that appellant had been taking this plea beforethe adjudicating authority as well as before the first appellate authority that theamounts so raised were used for the manufacturing activity as infusement of capital -the adjudicating authority as well as the first appellate authority have mis-directedtheir entire findings in denying cenvat credit of the ST paid under ‘Banking & OtherFinancial Services' by the said M/s PLA - firstly, when the amounts raised by M/s PLAwere undisputedly used by appellant for the manufacturing activity i.e. for thebusiness during the relevant period is itself an indicator that the said servicesrendered by M/s PLA has intrinsic relation to the manufacturing of business activity ofthe appellant - it is also noticed that the decision of the Tribunal in the case of HindujaGlobal Solution [ 2016-TIOL-728-CESTAT-BANG ] would directly apply in the case inhand - in view of the foregoing, the impugned order is unsustainable and set aside -appeal allowed : CESTAT [para 6.1, 6.2, 6.3, 6.5, 7]


Abu Jani Sandeep Khosla Vs CCE (Dated: April 19, 2017)

CX -Appellants before CESTAT against confirmation of demand of duty on thereadymade garments cleared by them during 1.5.2004 to 8.7.2004 - appellantarguing that since the impugned goods are in the nature of handicraft and exemptunder notification 76/86-Ce, no duty demand can be confirmed against them: HELD -It is apparent that the appellants are seeking exemption under notification 76/86-CEwhich is applicable, inter alia, to handicrafts - the appellants claim that the goodsmanufactured by them are handicrafts - in these circumstances, the onus toestablishing that the goods cleared by them are ‘handicraft' is on the appellant - in theinstant case, the appellants have produced certain certificates from the DevelopmentCommissioner wherein certain products have been certified to be handicrafts - thesaid certificates are not in respect of the impugned goods - it is also not clear if thesaid certificates are in respect of similar goods -the revenue had given the appellantan option to get the goods examined before clearance, however, the appellant chosenot to do so - in the absence of any evidence to support the claim by the appellantthat the goods are handicraft, the Bench is unable to interfere with the impugnedorder insofar as the demand of duty is concerned - as regards imposition of penalty,equivalent penalty under rule 25 of the CER has been imposed - penalty under rule 25cannot be imposed as the issue is of interpretation - the appellant had a bonafidebelief - penalty is, therefore, set aside : CESTAT [para 7, 8, 9, 10]


Honda Motorcycle And Scooter India Pvt Ltd Vs CCE (Dated: June 6, 2017)

CX - Assessee is manufacturer of Scooters and Motorcycles and sell their finalproducts through dealers appointed by them - Dealers had incurred certain expenseson advertisement and publicity on behalf of assessee - Revenue felt that theseexpenses should have been included in assessable value of finished goodsmanufactured by assessee under CEVR, 2000 - Issue is no longer res-integra and hasbeen settled in favour of assessee in their own case in Honda Seils Power ProductsLtd. 2013-TIOL-1492-CESTAT-DEL - Issue was also dealt in case of Maruti SuzukiIndia Ltd. 2008-TIOL-1929-CESTAT-DEL - Following said case laws, impugned ordersare not sustainable, and accordingly, same are set aside: CESTAT


Vega Auto Accessories Pvt Ltd Vs CCE (Dated: June 29, 2017)

CX - Assessee are holders of CX registration and are engaged in manufacturing of

safety gears (helmets) - A SCN for demanding and appropriating duty along withinterest, with proposal to confiscate seized helmets and to impose penalty onassessee under Rule 25 of CER, 2002 r/w Section 11AC of CEA, 1944 and to imposepenalty - Two three-wheeled autos intercepted and found carrying helmets fromfactory of assessee and there was no accompanying invoice and hence helmets alongwith two vehicles were seized by officers - Assessee had paid Rs.50,000/- onlinechallan towards initial payment of duty for resuming invoices which has beenmentioned in SCN and which has also been mentioned in OIO, which is an excessamount paid by assessee over and above amount of Rs.7,46,305/- towards duty,interest and redemption fine and penalty, for which no order has been passed byauthorities - Commissioner (A) has upheld OIO - Further, it is found that originalauthority has imposed redemption fine of Rs.3,24,592/- whereas duty involved ongoods were to the tune of Rs.2,11,530/- which according is on a higher side andtherefore, redemption fine is reduced to the extent of Rs.1,00,000/- - Similarly as faras imposition of penalty of Rs.2,10,183/- is concerned, since assessee have paid dutybefore issue of SCN, he was entitled to avail benefit of reduced penalty of 25% of dutyunder Section 11AC, same is granted - Further, assessee is entitled to get backRs.50,000/- which was paid by him and same was mentioned in SCN and OIO butsame has not been refunded to assesseee in final order, same is granted: CESTAT


Andhra Pradesh State Financial Corportion Vs CCE, C & ST (Dated: June 12,2017)

CX - One M/s. KTL were a 100% EOU having customs private bonded warehouselicence for manufacture and export of terry towels - As permitted by GOI, KTLimported and warehoused plant and machinery without payment of customs duty byavailing benefit of exemption Notfn 13/81-Cus and has also procured indigenousmaterial without payment of CX duty - Export performance of KTL was reviewed andas they did not fulfil export obligation and there was a short-fall, appellant seized theplant and machinery as per provisions of Section 29 of State Financial Corporation Actto recover the dues and auctioned the machinery and sold the same to M/s.Vijayalaxmi Enterprises; the jurisdictional Superintendent explained the provisions ofCustoms Bonded Warehouse to appellant and status of machinery was as if it was stillabroad and out of Indian territory and duty liability on said goods needs to bedischarged which was demanded from appellant and Vijayalaxmi Enterprises -Vijayalaxmi Enterprises filed a Writ petition in High Court of Andhra Pradesh wherein itis held that Departmental authorities cannot restrain M/s. Vijayalaxmi Enterprisesfrom taking possession and lifting the machineries purchased in auction proceedings -Undertaking given by appellant to High Court has to be honoured by them and sinceimpugned order confirms the demand of duty on KTL who is loanee originally, it wasbounden duty of appellant to discharge duty liability to customs authorities - Nomerits found in appeal filed by appellant in contesting duty liability confirmed againstKTL and sought to be recovered from them as per undertaking given to High Court ofAndhra Pradesh - Visiting the appellant with penalty under Section 112 is unwarrantedand not in consonance with law: CESTAT


CCE Vs Ispat Industries Ltd (Dated: February 27, 2017)

CX - Valuation - Section 4 of the CEA, 1944 - Respondent claimed deduction of transitinsurance of the goods from the factory gate to the premises of the buyer -department's contention is that since the insurance is taken by the respondent, theownership of the goods continues with the appellant till it is delivered to the buyer'spremises and actual sale takes place at the premises of the buyer - therefore, noabatement on account of freight and insurance is permitted - accordingly, a SCN wasissued for the period 1.4.2003 to 31.3.2004 - the adjudicating authority confirmed thedemand - Commissioner (Appeals) allowed the appeal, therefore, revenue before

CESTAT.

HELD - Commissioner (Appeals) has examined the purchase orders, acceptanceorders, consignment notes and found that there is no condition related to the issuewhether the inspection is carried out at site and consequently held that the goods wasnot sold at customer's premises - the freight and insurance from place of removal isexcludible from the assessable value - in the respondent's own case [2015-TIOL-40-SC-CX] , on identical facts, the Supreme Court has held that the place of removal isthe factory gate of the assessee - accordingly, the freight is not includible in theassessable value - impugned order is upheld and the revenue's appeal is dismissed :CESTAT [para 5, 6]


Safex Fire Services Ltd Vs CCE (Dated: April 12, 2017)

CX – Appellant cleared consignments of final products under ARE-3s to theircustomers - re-warehousing certificates of ARE-3 were not produced within 90 days -therefore, under an assumption that these goods were diverted for local consumption,the lower authorities issued SCN demanding duty liability, interest thereof and alsosought to impose penalties – demand confirmed, equivalent amount of penaltyimposed under the provisions of section 11AC of the Central Excise, 1944 [Act] readwith rule 25 and 27 of the Central Excise Rules 2002 [Rules]

HELD - Department was aware of the fact that the goods were cleared from thefactory premises of the appellant under ARE-3 to SEZ/100% EOU - non submission ofre-warehousing certificate in itself cannot be conclusive of fact that the appellantmight have diverted the goods cleared under ARE-3 for local consumption - appellanthas already discharged duty liability and interest thereof since he has not producedthe re-warehousing certificate within the stipulated time - penalty is unwarranted forthe simple reason that the departmental officers were aware that the goods werecleared from the appellant's factory under ARE-3 and CT-3 – further, certificate fromrecipient of goods is also categorical that they had received the goods - penaltyimposed on the appellant under the stringent provisions of section 11AC of the Act isnot warranted as there cannot be any intention to evade payment of duty bysuppression, willful mis-statement, fraud and collusion - penalty sought to be imposedunder rule 25 and 27 of the Rules is also incorrect as there is nothing on record toshow that appellant has acted in a manner which would render the goods liable forconfiscation – duty liability and interest thereof is upheld while the penalty imposed isset aside: CESTAT [para 5, 6, 7]


Nicholas Pirmal India Ltd Vs CCE (Dated: March 16, 2017)

CX - Appellant availed cenvat credit on the inputs which were cleared by them as suchto their sister concern during the period 1.7.2000 to 6.11.2001 and reversed theappropriate cenvat credit availed on such inputs - department contending that theappellant should have cleared the inputs on payment of duty by arriving at the AV asper the provisions of section 4 or section 4A of the CEA, 1944 by treating such inputs‘as if manufactured' by them - appellant paid the differential duty on 9.3.2002 - SCNdated 30.6.2005 issued for demanding interest on the differential duty paid and alsoseeking to impose equivalent amount of penalty - AA confirming interest ofRs.28,439/- and imposing equal amount of penalty - as order upheld byCommissioner(A), appellant assessee before CESTAT.


CCE Vs Indorama Textiles Ltd (Dated: March 17, 2017)

CX – Valuation - Dispute pertains to clearance effected to two different buyers – in theabsence of any evidence adduced indicating flow of additional consideration frombuyer to appellant, undervaluation cannot be alleged - buyers of the respondent in theimpugned transactions had been issued with licences for import of raw materials foruse in the manufacture of export products, and instead of procuring from abroad,opted to source them from respondent - Needless to say, the licence, being renderedsuperfluous, was liable for any incentives prescribed in the Foreign Trade Policy – noflaw in the reasoning of first appellate authority that in re IFGL Refractories Ltd -2005-TIOL-103-SC-CX the assessee having charged price, contingent upon transfer ofadvance licence and otherwise, the differential amount could be treated as additionalconsideration whereas the present dispute pertains to clearance effected to twodifferent buyers - no reason to interfere with the impugned order - Revenue appeal isrejected: CESTAT [para 5, 6]



Emil Pharmaceutical Industries Pvt Ltd Vs CCE (Dated: April 20, 2017)

CX -Valuation - Section 4 of the CEA, 1944 - Appellants are engaged in themanufacture of "Cardovit" which was cleared to M/s.Duchem Laboratories Ltd.[Duchem] who in turn sold the products at a premium - investigation revealed thatDuchem is a wholly owned subsidiary of M/s.Pfizer Ltd. [Pfizer] - it was also noticedthat appellant had entered into agreement with Pfizer for technical sales promotion oftheir product and paid Pfizer for the services taken - revenue of the view thatappellant and Pfizer are related persons - it was proposed that the AV for the purposeof payment of duty should be value at which Duchem is selling the product to theunrelated buyers - demand confirmed by lower authorities, hence appeal to CESTAT.

HELD -It has been alleged that since the appellants are related to Pfizer and Pfizer isrelated to Duchem (by virtue of being holding company), the appellants becomerelated to Duchem - for the allegations to succeed, the revenue needs to establishthat the appellants are related to Duchem - in the instant case, the revenue fails onboth the counts - no evidence has been produced to show that by virtue of beinginterconnected undertaking, Duchem and Pfizer become a single entity - secondly, noevidence has been produced to establish that the appellants and Pfizer have anyinterest in the business of each other - from the terms of the agreement, it appearsthat Pfizer is merely a service provider to the appellant - in the process, the appellantpay for the services to Pfizer - it is a simple commercial transaction - in the absenceof any proof of mutuality of interest, Bench is unable to sustain the impugned order -impugned order is therefore, set aside and the appeal is allowed : CESTAT [para 4,4.1, 5]


CCE Vs Edicom Mining Equipment Pvt Ltd (Dated: April 17, 2017)

CX –Respondent is engaged in the manufacture of pneumatic tools and spares andavailing SSI exemption under notification no.8/2003-CE dated 1.3.2003– they arealso clearing goods against form H to the merchant exporter for onward export -department of the view that such clearances would not be eligible for deduction fromthe aggregate value of the exemption under the said notification – accordingly, thevalue of such clearances is liable to be added in the aggregate clearance value anddue to which the exemption limit exceeds and the appellants is not entitled to SSIexemption–AA confirming demand but Commissioner (Appeals) allowed the appeal of

the appellant – revenue before CESTAT.

HELD – The goods were directly supplied by the respondent manufacturer from theirfactory to the merchant exporter and who in turn exported the goods -therefore,condition of circular 648/39/2002-CX dated 25.07.2002 that the export should bethrough merchant exporter itself stands fulfilled – the Board has consciouslyprescribed sales tax form as proof of export as the said Form H is issued by Sales taxdepartment only in respect of those goods which are exported -the basic objective ofsuch clearance is that if the manufacturer's goods cleared to merchant exporter hasbeen exported, the same shall be treated as export and value thereof is not includiblein the aggregate value of clearance for the purpose of SSI exemption -therefore, theinterpretation of the adjudicating authority does not serve the purpose of the circularand defeats the entire objective of the simplified procedure prescribed by the Board –the clearance against Form H has to be treated as clearance of export and same is notincludable in the aggregate value for the purpose of SSI exemption notificationno.8/2003-CE -no infirmity found in the impugned order and, therefore, the same isupheld - Revenue's appeal is dismissed : CESTAT [para 5, 6]


CCE Vs Jaishri Engineering Company Pvt Ltd (Dated: March 8, 2017)

CX - Issue involved is whether the respondent and partnership firm, M/s.RandeepAutomobiles [M/s.Randeep] wherein HUF of Shri B.G.Gandhi and M.G.Gandhi are thepartners, are related person and value at which M/s.Randeep sold the goods shall betreated as transaction value of the appellant - the adjudicating authority decided onthe basis that Shri B.G.Gandhi and M.G.Gandhi are the directors of the respondent'scompany and are the partners of trading concern of M/s.Randeep - respondent'sgoods are sold through the said trading concern and since Shri B.G.Gandhi andM.G.Gandhi are also directors of the respondent company, both the concerns arerelated as per the valuation provision effective from 2000, the value at which goodswere sold by M/s.Randeep shall be the assessable value for the purpose of chargingexcise duty on the clearances made by the respondent's company - the adjudicatingauthority also observed that payment of Rs.5 Lakhs was paid by the respondentcompany to Mrs.Gopi G. Gandhi, who is the one of the partners of M/s.Randeep whichshows that both the concerns are related - on appeal, the Commissioner (Appeals)allowed the respondent's appeal - revenue before CESTAT.

HELD - There is nothing on record that there is any flow back of any extraconsideration from M/s.Randeep for the respondent company - respondent company isa Private Limited company and M/s.Randeep is a partnership firm, therefore, both arenot related in the eyes of the law - the transaction of Rs.5 lakhs as loan on paymentof interest cannot be the reason for holding partnership and private limited as relatedperson -from the findings, it can be seen that Commissioner (Appeals) afterconsidering all the facts and legal position, particularly taking support of Apex Courtdecision came to the conclusion that partnership firm and respondent company arenot related person -therefore, value of M/s.Randeep cannot be adopted as assessablevalue of the respondent company - no merit found in the Revenue's appeal -impugnedorder is upheld, revenue's appeal is dismissed : CESTAT [para 6]


Geltec Pvt Ltd Vs CCE, C & ST (Dated: June 9, 2017)

CX - Assessee has wrongly filed the appeal before office of Commissioner instead ofbefore the Office of Commissioner (A) and that was a bona fide mistake anddepartment should have returned the appeal to assessee for filing the same beforeright forum but the same was not done by department and therefore, time spent inpursuing appeal before a wrong forum is condonable and same is condoned - After

condoning that delay, appeal is very much within the condonable limit ofCommissioner (A) - Therefore, in interest of justice, delay condoned in filing theappeal before Commissioner (A) and case remanded to Commissioner (A) to decidethe same on merits: CESTAT


United Cable Industries Vs CCE (Dated: July 6, 2017)

CX - Assessee engaged in manufacture of Electric Wires & Cables and used to procureraw materials and send them directly to job workers under Job Work Challan and theywere also taking Cenvat credit of duty paid on inputs - It appeared to Revenue thatassessee were not entitled to take Cenvat credit of duty paid on inputs unless goodsprocessed by job workers were received in factory of assessee - In view of decision incase of Hyundai Motors (I) Ltd. 2014-TIOL-1819-CESTAT-MAD , Cenvat credit cannotbe denied for reason that inputs were directly sent to job workers particularly wheninputs were received after processing and were brought into factory and duty on finalproduct was paid: CESTAT


Asha Confectionary Vs CCE (Dated: June 1, 2017)

CX - Assessee is in appeal against letter dated 27/02/2017 issued by Superintendent(Adjudication-I) - Said communication is in response to letters sent by assessee,pursuant to SCN dated issued to them, requesting among other things crossexamination of witnesses whose statements were relied upon in SCN - Admittedly 18statements were relied upon in SCN to prove the charge against assessee, regardingnon-payment of duty - Assessee filed interim reply requesting for cross-examinationof witnesses - Regarding objection of Revenue that it is discretion of AdjudicatingAuthority regarding permission to cross-examine the witnesses, Tribunal is notdeciding about discretion of Adjudicating Authority - All that is required is provisionsof Section 9D are to be followed - There is no substantial difference betweenproceedings before Adjudicating Authority or before a court as specifically mentionedunder Section 9D (2) of the Act - Original Authority himself issuing SCN citing some ofstatements as relied upon, by itself does not indicate that Adjudicating Authority hasadmitted such statements as evidence - Tribunal is not commenting upon admissibilityor reliance of any of evidence, including statements now being considered -Adjudicating Authority is directed only to follow required legal provisions: CESTAT


Fucon Technologies Pvt Ltd Vs CCE (Dated: June 8, 2017)

CX - None present for appellant nor any request for adjournment is on record whichshows that appellant is not serious to pursue the case - Therefore, as per the maximVIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT, law helps those who arevigilant and not those who go to sleep, appeals are dismissed for default: CESTAT


Tamilnadu Newsprint and Papers Ltd Vs CCE (Dated: May 16, 2017)

CX - Assessee had taken CENVAT credit in respect of certain capital goods used forconstruction of various paper making machinery, in particular, material developmentplant and material expansion plant - Department views that said plant was embeddedto earth and hence immovable property - Section 37B order dated 15-01-2002 issuedby Board is very exhaustive and clarifies various parameters and situations when and

where the plant / machinery would be considered immovable or otherwise - SaidBoard's order had been referred to with approval by Supreme Court, in case of Solid &Correct Engineering Works - 2010-TIOL-25-SC-CX - In view of said decision matterremanded to original adjudicating authority for denovo consideration to apply thetests laid down in Board's Section 37B order after extending due and sufficientopportunity to assessee to defend their case and to give any evidence, if required,including additional evidence in support of their defense - Since the matter per se wasunder confusion, a fact recognized even by Board in section 37B order, Adjudicatingauthority should also adjudicate afresh matter of imposability of penalty: CESTAT


MSS Food Processors Vs CCE & ST (Dated: June 2, 2017)

CX - Assessee engaged in manufacture of Pan Masala, liable to duty in terms ofCompounded Levy Scheme as per PMPM Rules, 2008 - Duty liability of assessee isfixed as per the number of packing machines operated during a particular month -Assessee closed the operations, on due intimation to Department, for periodsexceeding 15 days continuously, during various months - Dispute is about theprocedure to be adopted to consider abatement, otherwise available to assessee -Assessee could not pay duty by 5th of same month as they have closed for operationduring period stipulated for payment of duty - By the end of month, they were awareof number of days for which unit operated and also their exact duty liability on proratabasis - This duty liability was discharged subsequently in next month - This willnecessarily bring liability for interest, which is admitted by assessee also - Tribunal isnot able to accept the view of Revenue that assessee have to first pay full dutyliability for all days, as determined by jurisdictional officers and thereafter, after theend of month, ascertaining number of days closed, they should claim the excess paidamount, as abatement from Department - No such procedure has been laid down insaid rules - No merit found in impugned order, same is set aside: CESTAT


Tirupati Fibers and Industries Ltd Vs CCE (Dated: May 26, 2017)

CX-After a series of litigation, the Commissioner (Appeals) dismissed the appealpreferred by the appellant on limitation - so far as the merits are concerned, heobserved that there is lack of material on record to decide the same - appeal beforeCESTAT.

HELD -Member (Judicial) - In the appellant's case, limitation has to be computed inaccordance with the provisions as they stood in the year 1983 when they received thecommunication communicating the order of the Assistant Commissioner through theSuperintendent on or about 25.8.1983 and thereafter they have preferred writ petitionbefore Calcutta High Court on 14.9.1983 -the time taken from the date of receipt ofthe communication from Superintendent to the date of filing writ before the HighCourt is 19 days -thereafter, the matter was subjudice and finally was decided byRajasthan High Court on 13.5.2009 when the writ petition was dismissed on theground of alternative remedy, relegating the appellant to the process of appeal -thereafter from such date, the appellant filed appeal before the Commissioner(Appeals) on 24.7.2009, which on computation comes to 71 days -thus, the appellanthave taken the total of 71+19, or 90 days in filing the appeal before the learnedCommissioner (Appeals) -during the relevant period, the time allowed for filing appealwas 90 days and further 90 days condonation period was provided, which could becondoned by Commissioner (Appeals) on reasonable cause being shown -Commissioner (Appeals) has erred in dismissing the appeal on the ground of limitation- the appeal was filed within the period of limitation -accordingly, the order of theCommissioner (Appeals) is set aside and appeal allowed by way of remand: CESTAT[para 6]

Member (Technical) - The impugned order did not examine the case on merits based

on the submissions made by the appellants -the actual nature of product, the natureof manufacture and applied case laws alongwith other supporting evidence that is filedby the appellant have not been examined by the First Appellate Authority -in fact,since the Original Authority himself did not examine the issue before finalizing theclassification list against which the appellants were aggrieved, the Commissioner(Appeals) did not have a detailed order to examine and to decide -what was availablewas only a communication from the Superintendent intimating the approval ofclassification -based on that, no elaborate examination could be made by the FirstAppellate Authority -now, the appellants are submitting various supporting evidence -in these circumstances, it is found fit and proper that the issue on merit regardingcorrect classification of the impugned product should be examined and decided afreshby the Jurisdictional Original Authority to whom the matter is being remanded - thematter is remanded back to the Original Authority for a fresh decision on the abovelines: CESTAT [para 2]


CCE Vs Godawari Power and Ispat Ltd (Dated: June 23, 2017)

CX - Delay of 15 days in appeal - Since the reason of delay explained seemsreasonable, in interest of justice, delay in late filing of appeal is condoned: CESTAT


Flexo Foam Pvt Ltd Vs CCE (Dated: April 28, 2017)

CX - Assessee filed refund claim under section 173S of CEA, 1944 on the ground thatafter having supplied berths to various organs of Railways as well as various statetransport authorities, their invoice values were reduced by them after deductingamount on account of liquidated damages - Said claim of assessee was rejected byAssistant Commissioner - Issue of whether the amount deducted by buyer on accountof liquidated damage should be allowed as deduction on transaction value has beensettled by Tribunal in favour of assessee in case of Victory Electricals Ltd. 2013-TIOL-1794-CESTAT-MAD-LB - Assessee are entitled to refund on merits - However, refundhas to cross the barrier of unjust enrichment for which burden is on assessee toproduce necessary documentary evidence that incidence of duty has not been passedon by assessee to any person: CESTAT


CCE & ST Vs Aries Agrovet Industries Ltd (Dated: June 19, 2017)

CX - Asssessee engaged in manufacture of pesticides and micronutrient fertilizersclassifiable under CETH 3808 and 3105 respectively under CETA, 1985 - On imbrogliowith respect to classification of 'Micronutrients', CBEC themselves have been changingtheir stance thereon over the years - CBEC found it necessary to issue yet one morecircular 1022/10/2016-CX , dated 06.04.2016, on very issue of classification ofmicronutrients and plant growth regulators - As per said CBEC circular dated06.04.2016, plant growth regulators are defined as organic compounds other thannutrients that affect physiological processes in plants, by hormonal action inpromoting inhibiting or modifying growth and development - On the other hand,micronutrients, as explained in very same circular, are essential nutrients, like iron,Manganese, Zinc, Copper and Boron, that are required in small quantities for normalgrowth and development of plants - Micronutrients thus cannot modify inhibit retardthe growth of plants like plant growth regulators, they only promote normal growth -It clearly emerges that impugned products definitely do contain more than one ofessential nutrients listed in circular, they have also contain recognisable percentage ofnitrogen - This being so, disputed items are certainly micronutrients - In view ofpresence of nitrogen, and also considering that they are mixtures and not separatechemically defined compounds, said goods would therefore come under ambit ofmicronutrient fertilisers and will then required to be classified as in " other fertilisers "in CETH 3105: CESTAT


CCE Vs Asia Cables (Dated: April 24, 2017)

CX - Issue relates to avaliment of SSI exemption Notfn 9/1999 - It appeared torevenue that assessee had irregularly availed exemption - In adjudicationproceedings, differential duty along with interest thereof was demanded fromassessee, equal penalty imposed under Section 11 AC of CEA, 1944 as also penaltyunder Rule 173 Q of CER - In appeal, Commissioner (A) set aside the order of originalauthority on the ground that aggregate value of clearances have to be quantified aftertaking into consideration of goods cleared under concessional rate of duty as well asfull rate of duty - While the acts and omissions of assessee are calculated ones tokeep themselves within aggregate exemption limit of Rs. 50 lakhs provided in saidnotfn, they can however, not been denied benefit of exemption ab initio - However asit has been established that purported clearances of brand name owners have notsatisfied the conditionalities provided in notfn, value of clearances thereof willnecessarily have to be added to aggregate clearances, even if there is mention ofbrand name in invoices - Differential duty liability, if any, will start ticking once thevalue of clearances already made by assessee in availing benefit of notification andvalue of disputed brand name clearances are added and total thereof exceedsexemption slabs of Rs.50 lakhs and Rs. 100 lakhs respectively - Duty liability will haveto be recalculated accordingly, only for which limited purpose the matter will have tobe remanded to original authority: CESTAT


CCE Vs Apcotex Industries Ltd (Dated: April 24, 2017)

CX - Section 35B of the CEA, 1944 - Tribunal has been conferred the power tocondone delay in filing cross objection if it is satisfied as to the existence of thesufficient cause for condoning the delay - application allowed: CESTAT [para 2]


CCE Vs Yarn Plus (Dated: May 26, 2017)

Central Excsie - Appellant is engaged in the manufacture of dyed and un-dyed chenilleblended yarn – Upon audit it was observed that the appellant had been clearingchenille yarn without payment of duty on job work in terms of Notification No. 214/86dt. - Chenille yarn was finding use in the manufacture of fabric to which the benefit ofNotification No. 214/86 was not available - it was imputed that the benefit ofNotification No. 214/86 was not available to the appellant and they were required topay duty on the chenille yarn supplied without payment of duty on job work – SCNissued to the appellant for recovery of duty along with interest – Demand wasconfirmed and on appeal the impugned order was set aside – Hence, revenue has filedappeal.

Held: the demand in this case was raised on the ground that the benefit ofNotification No. 214/86 was not available to the appellant and therefore, theappellant was required to pay the duty on chenille yarns manufactured and suppliedon job work basis to the principal manufacturer - the issue in this case is no longer resintegra and is covered by the judgment of this Tribunal in the case of Dhana SinghSynthetics Pvt. Ltd. Vs. CCE, Vapi - The appeal against the order was dismissed bythe Hon'ble Supreme Court - the adjudicating authority for the period June, 2002 toMarch, 2003 on the identical set of facts has dropped the demand in the adjudicationorder No. V(56)15Adj./Commr/47/2003/1457 dt.27.01.2004. - The revenue wasasked to produce any challans to show that the benefit claimed in the present casewas under Notification 214/86 - However, they could not produce any challans tosubstantiate that claim made in the grounds of appeal – Hence, appeal filed byrevenue is dismissed – Cross objections also disposed off – (Para 6-9).


Finolex Industries Ltd Vs CC & CE (Dated: May 24, 2017)

CX - Appellant availed CENVAT credit in their Chinchwad unit in respect of variousconstruction services whereas the said construction services were related to setting upthe factory at Urse plant - SCN issued, demand confirmed and penalty and interestimposed - appeal to CESTAT. Held: Appellant availed CENVAT Credit in respect ofvarious construction services which were used for setting up of Urse Plant during theperiod March 2007 to April 2009 - input service was distributed by reversing the samein April 2009 - Since Urse Plant had not entered into manufacture, therefore, theywere not in a position to utilize cenvat credit - interest is, therefore, chargeable fromthe date of taking credit till the reversal - As regards penalty, since Urse Plant is partof a single entity, there is no malafide intention in taking the credit by the head office,which is the appellant - Credit is otherwise admissible to their Urse Plant - penalty notimposable u/s 11AC of CEA, 1944 - appeal partly allowed: CESTAT [para 4]


Hastkamal Tex Chem Pvt Ltd Vs CCE (Dated: June 29, 2017)

CX – Statutory authority has no power to condone the delay beyond the period oflimitation prescribed by law and discretion vested by law – Commissioner(A) had nopower to condone delay of 170 days in filing appeal, hence rightly rejected appealfiled by appellant – appeal dismissed: CESTAT [para 4]


Jai Jyotawali Steel Pvt Ltd Vs CCE (Dated: May 24, 2017)

CX – CENVAT - Issue is whether supplies made to SEZ Developer is qualified as exportof goods and consequently provision of Rule 6 (6)(i) of CCR is inapplicable. Held:Issue is no longer res integra – In the case of Sujana Metal Products - 2011-TIOL-1173-CESTAT-BANG and Steel Authority of India Ltd. - 2013-TIOL-384-HC-CHATTISGARH-CX it is held that supplies made to SEZ Developer have beenconsidered as export in view of Section 2 of Special Economic Zone Act, 2005; thatthe issue was also resolved by amending Rule 6(6)(i) in terms of Notification No.50/2008-CE(NT), therefore, the demand raised is not sustainable – impugned orderset aside and appeal allowed: CESTAT [para 4]


Raymond Ltd Vs CCE (Dated: June 29, 2017)

CX – Issue is whether removal of capital goods after use would attract excise duty interms of Rule 3(5) of Cenvat Credit Rules, 2004 during the period January 2005 toMay 2005. Held: On plain reading of rule 3(5), it can be seen that duty is required tobe paid only when capital goods is cleared 'as such' - the term 'as such' particularly inrespect of capital goods means removal of capital goods without putting to use orwithout installation - Once the capital goods is installed and used for substantialperiod, the capital goods does not remain 'as such' - If interpretation of the revenue isaccepted, then no capital goods will be other than "as such" irrespective whether it isinstalled and put to use or lying uninstalled –demand is not sustainable, henceimpugned order is set aside and appeal is allowed: CESTAT [para 6, 7]


Vista Film Packaging Vs CCE (Dated: May 24, 2017)

CX - Whether duty is chargeable on the value by reducing @ 2.5% per quarter on theused capital goods when the capital goods is exported. Held: It is provided in theSupplementary instruction of Central Excise Manual under para 3.4 of Chapter 5 thatthere is no bar for a manufacturer to remove the inputs or capital goods as such forexport under bond - there is an overall policy of the Government that any goodswhich are exported, no duty or taxes of such goods should be exported – Therefore, ifused capital goods are exported, no duty is chargeable or even the amount asrequired under Rule 3 (5) of CCR is not payable – Impugned order is set aside andappeals are allowed: CESTAT [para 4]


Gujarat State Fertilizers And Chemicals Ltd Vs CCE & ST (Dated: March 24,2017)

CX - Assessee had availed CENVAT credit on M.S. Channels, SS Plates, Double TwinRider Ring, Piston Rod Packing, Nickel Plate, Bar, Carbon Brick, Welding Electrodesand various other items used for repairs/maintenance of capital goods - Alleging thatthese items do not fall under definition of capital goods, SCN was issued to them forrecovery of credit - Issue has been recently considered by Principal Bench at Delhi inSinghal Enterprises Pvt. Ltd. - 2016-TIOL-2451-CESTAT-DEL - In view of principle laiddown in Kisan Sahkari Chini Mills Ltd. - 2013-TIOL-915-CESTAT-DEL, Tribunal have nohesitation to observe that credit on said items used for fabrication of capital goods aswell as for repairing and maintenance of capital goods, since supported by evidence ofChartered Engineers' Certificate are eligible to CENVAT credit: CESTAT


Aditya Packaging Vs CCE (Dated: June 23, 2017)

CX - Appellants, engaged in the manufacture of corrugated cartons, submitteddeclaration on 27.3.2006 to avail exemption of CE duty in terms of notificationno.50/2003-CE dated 10.6.2003 as amended - appellants started manufacturing theexcisable goods from 15.6.2005 and effected first clearance on 17.6.2005 - as theappellants failed to comply with the condition of filing their option to avail exemptionbefore effecting first clearance, the revenue proceeded against them to denyexemption during the period 17.6.2005 to 26.3.2006 - demand confirmed, penaltyimposed:

HELD - after careful consideration of the principles laid down by the Supreme Court inthe case of Hari Chand Shri Gopal - 2010-TIOL-95-SC-CX-CB and the facts of thepresent case, the Bench is of the considered opinion that the conditions inserted innotification no. 50/2003-CE are mandatory and cannot be held as mere proceduralrequirement - for effective monitoring of the exemption, such pre-condition has beeninserted in the notification - the appellants failed to fulfill the condition - accordingly,no infirmity found in the impugned order - the appeal is dismissed : CESTAT [para 6]


Azad Coach Pvt Ltd Vs CCE (Dated: May 31, 2017)

CX - During audit, department found that assessee issued certain invoices / debit noteto M/s Tata Motors on account of additional charges for material and labour for post

bid specific changes and for exterior & interior design and supervision for DMRCfeeder bus but did not pay duty - Assessee failed to provide any evidence that subjectinvoices are part of independent work; and related contract on these activities doesnot relate to their manufacturing activity of body building - Thus, based on fact onrecord, it can be said that amount collected by issuing these two invoices is part oftheir main activity of body building - Therefore, demand of duty concerning amountcollected by these two invoices is hereby sustained.

However, debit note which has been found to be wrongly prepared and has not beenissued to client M/s Tata Motors, and does not find any entry in ledger of assessee;amount shown as collected by said debit note cannot be included in value of themanufacturing activity, therefore, no duty is leviable on same - Penalty imposed onassessee under Section 11AC of CEA, 1944 would be equivalent to final quantificationof liability of duty as determined by original adjudicating authority for which case isbeing remanded - Liability of interest is also confirmed only on amount of duty asfound payable on re-quantification by original adjudicating authority during remandproceedings: CESTAT


Ess Ess Metals and Electricals Vs CCE (Dated: June 7, 2017)

CX - Assessee engaged in manufacture of brass, zinc, nickel, tin and lead alloys -Whether goods made by assessee were liable to duty during disputed period - Asimilar question came up before Supreme Court in case of Mahavir Aluminum Ltd.2007-TIOL-82-SC-CX in which Apex Court considered a question whether aluminum iningots when converted into billets would amount to manufacture - Both ingots andbillets were classified in same subheading of tariff during period of dispute - There isno scope for argument that conversion of metal into alloys does not amount tomanufacture - Ipso facto, duty is liable to be paid on finished product cleared fromassessee's factory - It has been argued that all relied upon documents based on whichSCN has been issued, has not been supplied to assessee - Wherever relied upondocuments have not been supplied to assessee, demand of excise duty is liable to beset-aside - For this purpose, matter remanded to original adjudicating authority whowill recompute the demand after excluding demands attributable to documents whosecopies have not been made available to assessee - Charge of manufacture uphold:CESTAT


Hindustan Coca Cola Beverages Pvt Ltd Vs CCE (Dated: March 23, 2017)

CX - Assessee was issued with SCN alleging wrong availment of CENVAT credit onvarious counts - In bringing power from outside to factory premises by laying downcables to be used in or in relation to manufacture of final product, covered by decisionof Tribunal in Shri Shyam Iron Udyog Pvt. Ltd's case 2009-TIOL-2337-CESTAT-KOL -On the issue of eligibility of CENVAT credit on M.S. Angles, Channels and Beams, it iscovered by judgement of Principal Bench of Tribunal in Singhal Enterprises Pvt Ltd'scase 2016-TIOL-2451-CESTAT-DEL - On the issue of availing CENVAT credit on inputservices used for erection of transmission lines and towers for bringing electricity fromoutside factory premises, issue is covered by Larger Bench decision of Tribunal inParry Engineering & Electronics Pvt. Ltd's case 2015-TIOL-3059-CESTAT-AHM-LB -With regard to credit availed on invoices, issued by their sales office, which wasdenied to them on the ground that sales office is not registered as input servicedistributor during relevant period, issue is covered by judgment of Gujarat High Courtin Dashion Ltd's case 2016-TIOL-111-HC-AHM-ST - Thus, CENVAT credit is admissibleto assessee: CESTAT


Gestamp Automotive India Pvt Ltd Vs CCE (Dated: July 10, 2017)

CX - Rule 6 of Valuation Rules, 2000 - Modification charges recovered in respect ofdies received free of cost is includible in AV as only the original cost of the unmodifieddies have been amortised – payment of service tax under the head Technical SupportService on such ‘modification charges' is not relevant – extended period is invokableas appellant has never disclosed that they are collecting die modification charges – soalso exercise is not revenue neutral as CENVAT credit cannot be availed of thedifferential duty payable as suppression is proved and demand is not hit by limitation– Impugned order upheld and appeal is dismissed: CESTAT [para 8, 9]



Finolex Cables Ltd Vs CCE (Dated: May 19, 2017)

CX - Appellants availed 100% CENVAT credit in respect of capital goods in the samefinancial year on receipt of capital goods whereas as per Rule 4(2) of CCR, 2004, theassessee is supposed to take only 50% - appellant paid the excess amount of creditavailed - issue is whether interest is chargeable and also penalty is imposable u/r 15of CCR. Held: Even though the credit was not utilized but the credit was availedwrongly, the interest is chargeable from the date of taking credit till the date ofreversal - since remaining 50% credit is otherwise available in the subsequentfinancial year, imposition of penalty is not correct, same is set aside - appeal partlyallowed: CESTAT [para 4]


Digganth Steel Industries And Engineering Works Vs CCE (Dated: May 19,2017)

CX - On physical verification of stock of finished goods, shortages were found byPreventive Officers - appellant admittedly paid the duty - adjudicating authorityconfirmed demand and also imposed equal penalty and interest - appeal to CESTATpleading that while they are not contesting duty liability, penalty imposition is notwarranted as the shortage is due to clandestine removal but due to accounting errors.

Held: Since shortage of finished goods is not under dispute, demand of duty ismaintainable - However, in the facts and circumstances of the case as there is nodirect evidence of clandestine removal, penalty u/s 11AC is not sustainable; alsoextended period is not invoked - appeal is partly allowed: CESTAT [para 4]


Bombay Oxygen Corporation Ltd Vs CCE (Dated: July 3, 2017)

CX - Duty on Carbide sludge - No one would prefer to manufacture waste to makethem excisable - duty demand cannot sustain - appeal allowed: CESTAT [para 4, 5]


Baheti Synthetics India Pvt Ltd Vs CCE (Dated: June 16, 2017)

CX - Shortage of raw materials PP/HDPE in the factory detected by Preventive Officers- appellant debited duty in their CENVAT account and paid interest - SCN issued andconfirmed along with penalty etc. - appeal to CESTAT - appellant taking a stand thatthe difference is due to waste which was not considered and that whereas shortagewas found in raw materials, the duty demand was made in respect of finished goodsviz. plastic rope and, therefore, demand is not sustainable. Held: Since the show-

cause notice has proceeded on entirely different ground of demanding duty on thefinished goods, whereas shortage was found in respect of inputs, the demand cannotsustain as there is no case of removal of finished goods clandestinely - impugnedorder is not sustainable, hence set aside - appeal is allowed: CESTAT [para 4]


Anshika Fasteners Pvt Ltd Vs CC & CE (Dated: May 19, 2017)

CX - Appellant is a manufacturer of Nuts and Bolts and also purchased the samegoods on payment of duty - After cleaning, testing and buttoning, the same were re-issued on payment of duty of an amount equal to CENVAT credit availed on thebought out goods - case of department is that since the activity does not amount tomanufacture, the appellant is not entitled to CENVAT credit - appeal to CESTAT.

Held: As per rule 16 of CER, 2002, even though the subject activity undertaken byappellant does not amount to manufacture but since the assessee cleared the goodson payment of duty which is equal to the credit availed, credit taken cannot be denied- impugned order set aside and appeal allowed: CESTAT [para 4]


Anil B Widhani Vs CC & CE (Dated: May 24, 2017)

CX – Issue is whether penalty on partner u/r 26 of CER can be imposed when the dutyand penalty has been confirmed against the partnership concern.

Held: Very same issue has been considered by Tribunal and jurisdictional High Courtand it is held that separate penalty under Rule 26 cannot be imposed on the appellant- appeal is allowed with consequential relief: CESTAT [para 4]


KS Oils Ltd Vs CCE (Dated: June 8, 2017)

CX - Assessee manufactures edible oils and exports de-oiled cake; receives variousservices and has paid ST on the same - They filed refund claim under Notfn 17/2009which was rejected on the ground that assessee filed certificate required inconsolidated manner instead of certifying each and every document enclosed withrespective refund claim - It is not understandable that if certificate is filed inconsolidated manner and if it is a consolidated certificate certifying all contents, whichare required as per proviso h (i) (E) and (F) of said Notfn, then why refund claimcannot be sanctioned and why there is requirement of individual certificate - When therequirement has been fulfilled substantially, it is not necessary that each and everydocument is to be certified individually - Refund claim of Rs. 2,57,527/- is sanctionedfor which further action shall be taken by Original Adjudicating Authority - However,for remaining amount of Rs. 14,718/-, matter is remanded for fresh adjudication toOriginal Adjudicating Authority: CESTAT


Lafarge India Pvt Ltd Vs CCE (Dated: June 8, 2017)

CX - None present for appellant nor any request for adjournment is on record whichshows that appellant is not serious to pursue the case - Therefore, as per the maximVIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT, law helps those who arevigilant and not those who go to sleep, appeals are dismissed for default: CESTAT


Nicholas Piramal India Ltd Vs CCE (Dated: May 31, 2017)

CX - Assessee engaged in manufacture of P&P medicaments - Goods initially weremeant for export under DEEC scheme - However, customers in Japan and Chinarejected those goods and goods were re-imported under Notfn 94/96-Cus - Aftermanufacture of goods and when their shelf life expired, assessee was not in a positionto clear / remove them even for home consumption, therefore, assessee chose todestroy subject goods - Revenue is demanding duty @ prevalent on day of re-importation of subject goods, whereas assessee submits that they paid duty at therate of day, when goods were destroyed as they could not use goods after expiry ofshelf life - Demand of duty would be at the rate as applicable on day of destruction -Once it is decided that assessee has rightly paid the duty on day of destruction ofgoods, there cannot be any liability of interest as well as liability of penalty againstassessee: CESTAT


Ritspin Synthetics Ltd Vs CCE (Dated: June 23, 2017)

CX - Assessee engaged in manufacture of M M yarn and availed cenvat credit oninputs used in or in relation to manufacture of final products - During scrutiny ofrecords of assessee, department observed that assessee had taken cenvat credit to inrespect of CX duty paid on machines hired on rent basis from various companies -Since assessee had taken cenvat credit and availed depreciation under Section 32 ofIncome Tax Act, department issued the SCN seeking disallowance of cenvat credit andfor imposition of penalty - Adjudicating authority has not invoked proviso to Section11A of CEA, 1944 for disallowing cenvat benefit and for imposition of penalties underSection 11AC - Further Commissioner (A) has also not discussed about involvement ofassessee in any activities concerning fraud, collusion with intend to avail fraudulentcenvat credit - Thus, in absence of any specific findings by authorities below thatthere is suppression, mis-statement, SCN should have been issued within one yearfrom relevant date: CESTAT


Steel Authority of India Ltd Vs CCE & ST (Dated: June 8, 2017)

CX –Appellant used a part of finished goods as the raw material for captiveconsumption in the factory, mines or township in project work and also sometimes intheir other plants – the dispute is with reference to such "Internal Transfer Orders"[ITO] and "Inter Plant Transfer" [IPT] – in respect of these goods, the appellant wasavailing exemption from payment of duty under notification no.67/95-CE dated16.3.1995 – SCN issued for recovery of the short paid duty – demand confirmed withinterest and equivalent penalty – appeal to CESTAT.

HELD - From the order of the adjudicating authority, it appears that the allegation isaccepted by the appellant – however, during the course of arguments, the appellantsubmitted that this is wrong finding as they have never accepted the allegation –when it is so, the Bench deems it fit to remand the matter to the original authority todecide the issue afresh presuming that appellant has not accepted the allegation -appellant produced a Chartered Engineer's certificate, which was not produced to theadjudicating authority, in respect of the part of the ITO clearances for which appellanthas claimed the benefit of notification no.67/05-CE – appellant assured that the samewould be produced before the adjudicating authority at the time of hearing – when itis so, the Bench remands the matter to the original authority by setting aside theimpugned order : CESTAT [para 3, 4, 5, 6, 7, 8]


Dalmia Chini Mills Vs CCE (Dated: June 16, 2017)

CX - Cenvat credit of ST paid on commercial construction service was denied byDepartment on the ground that such service cannot be treated as input service beingnot used directly or indirectly, in or in relation to manufacture of final products -Tribunal in case of assessee itself vide final order dated 23.02.2015 has allowedcenvat credit on disputed service holding that said service is specifically mentioned indefinition of input service for purpose of cenvat credit - Since assessee had usedcommercial construction service for construction of factory building, same should bequalified as input service for purpose of availment of cenvat credit: CESTAT


National Engineering Industries Ltd Vs CCE (Dated: May 8, 2017)

CX - Appeal filed against impugned order wherein refund amount of assessee wascredited to consumer welfare fund under Section 11B of CEA, 1944 on the ground thatcost of scrap removed by assessee were not considered in its cost of production andas such, sanction of refund to assessee will hit by doctrine of unjust enrichment - Onperusal of invoices issued by assessee to self and Certificate submitted by CA, it isfound that incidence of duty in respect of refund amount has not been passed on byassessee to any other person and same has been borne by assessee itself -Consequently, doctrine of unjust enrichment shall not be applicable and refundamount instead of being credited to Consumer Welfare Fund, should be refunded toassessee: CESTAT


KLJ Plasticizers Ltd Vs CCE & ST (Dated: March 24, 2017)

CX - Assessee had taken CENVAT credit on M. S. Angles, M. S. Pipes and SS Pipesused in manufacture/fabrication of storage tank outside the factory premises -Alleging that these items do not fall under definition of capital goods, SCN was issuedto them for recovery of credit - Issue has been recently considered by Principal Benchat Delhi in Singhal Enterprises Pvt. Ltd. 2016-TIOL-2451-CESTAT-DEL and held infavour of assessee - Impugned order set aside: CESTAT


CCE & ST Vs Al Amin Exports (Dated: July 3, 2017)

CX - Assessee, an 100% EOU, was alleged to have violated conditions of B-17 Bondexecuted with Department, inasmuch as, they had procured huge quantity of rawmaterials, from some of 100% EOUs under CT-3 certificate, but instead of utilising thesame in manufacture of goods and exporting the same, they exported cheapervarieties of made-up garments i.e. scrarves and dupattas manufactured out of boughtout items from local market, and raw materials procured duty free were diverted intoDomestic Market - Issue is no more res integra as has been considered by GujaratHigh Court in case of Kaay Bee Tax Spin Ltd. 2017-TIOL-199-HC-AHM-CX wherein it isheld that In case of breach of any of provisions of Customs Act and/or evenExport/Import Policy, and/or there is a breach of any of terms and conditions onwhich goods were permitted to be imported without payment of duty and permitted tobe deposited in Warehouse, confiscation of such goods can be said to be authorizedthereafter, and if said goods are not available for confiscation, redemption fine isimposable - Matter remanded to ascertain the quantum of fine: CESTAT


Alaska Tyres Pvt Ltd Vs CCE (Dated: June 6, 2017)

CX -Appellant-assessee is engaged in the manufacture to rice rubber rolls and ricepolishers of various brands - on one brand ‘ALASKA', which was not owned by them,they were availing SSI benefit - on a visit to their factory premises, the officers foundout that ‘ALASKA' brand was not owned by the appellant but belonged to M/s.VinkoAuto Industries Ltd., Jalandhar [M/s.Vinko] - SCN issued - after a series of litigation,demand confirmed, penalties imposed on both the appellants - appeal to CESTAT.

HELD -The main contention of the appellants is that this brand 'ALASKA' thoughinitially belonged to M/s.Vinko, which is a family concern of brother of Shri RaviGupta, Managing Director of the assessee, it was assigned to the assessee-appellantwith effect from 1.7.1996 vide assignment deed dated 1.7.1996 - however, theground facts do not support the plea of the appellant that transfer of the 'ALASKA'brand was made in assessee's favour effective from 1.7.1996 - from the observationsof the original adjudicating authority as well as appellate authority and after carefulconsideration of facts on record and submissions of all the parties, it appears thatduring the relevant period, the brand 'ALASKA' was owned by the entity namelyM/s.Vinko, who is a different entity than the assessee-appellant- when it is so, theappellants are not entitled to SSI benefit for the relevant period - the appellants havetaken the plea that under the provisions of Trademark Act, 1999, such registration isto be treated as their brand retrospectively and, therefore, they should be given thebenefit of SSI exemption during the relevant period-in the light of the observations ofthe Apex Court in the case of Meghraj Biscuits Industries Ltd. - 2007-TIOL-36-SC-CX ,it is very clear that for the present facts, the assessee-appellant is not entitled to thebenefit of SSI exemption during the said period, as during the said period, the brandname ‘ALASKA' was owned by another party, namely M/s.Vinko - the other appellant,a Director of the assessee-appellant, failed to file necessary declaration under rule173B of Central Excise Rules, 1944, that the assessee unit was to manufacturebranded goods during the relevant period - he was found to be instrumental inpreparing the assignment deed in connivance with M/s.Vinko in order to evade theduty of Central Excise -thus, there has been active involvement of this appellant inevasion of duty of Central Excise in the present proceedings making him liable toimposition of penalty under rule 209 A of CER, 1944 -consequently, the impugnedorder in his case also is sustained and the appeal filed by him deserves to be rejected- in the result, the impugned order is sustained and both the appeals are dismissed aswithout merits : CESTAT [para 5, 5.1, 5.3, 6, 6.1, 7, 8]


Baldev Alloys Pvt Ltd Vs CCE (Dated: June 19, 2017)

CX –Appellants are engaged in the manufacture of sponge iron – during the course ofaudit, the officers noticed that consumption of electricity by the appellant had shownabnormal variation from 54 units to 552 units per MT – considering 70 to 80 units asstandard norms for manufacture of 1 MT of sponge iron, Revenue calculated totalproduction of sponge iron on the basis of maximum limit of consumption of 100 unitsper MT – revenue proceeded to demand and recover CE duty alleging unaccountedmanufacture and clearance of sponge iron – demand confirmed, equivalent amount ofpenalty imposed – appeal to CESTAT.

HELD –No basis or reason with background or technical analysis has been givenregarding the norms of electricity usage - in case of short levy due to unaccountedclearances, the burden is on the Revenue to prove such allegations with positiveevidence - a demand confirmed by the Original Authority solely based on thepurported excess consumption of electricity, without any corroborative evidencecannot be upheld - there is no corroboration of any sort - no investigation has beenconducted by Revenue - when audit of accounts were conducted, the officers madecertain calculation of possible normal consumption of power - based on purportedexcess consumption, the whole case has been made - there is no legal sanction forsuch course of action - impugned order is set aside and the appeal is allowed :

CESTAT [para 5, 7, 8]


Commercial Engineers and Body Builders Company Ltd Vs CCE & ST (Dated:June 20, 2017)

CX - Appellants received duty paid chassis from different customers and built body onthe said chassis - revenue of the view that the appellants are engaged only in buildingor fabricating bodies on the chassis and they do not manufacture motor vehicles butonly bodies of motor vehicle - the dispute in the present appeals is relating to correctclassification of the goods cleared by the appellant and their eligibility to theexemption under Notification 6/2006-CE and 12/2012-CE available during therelevant periods - revenue alleges that these goods were classifiable under CETH 8707and not under 8704 as claimed by the appellants - proceedings initiated - dutyconfirmed by denying the exemption available under the said notifications - penaltiesimposed - appeal to CESTAT.

HELD - Admittedly, the appellants were building bodies on the chassis classified underHeading 8706 -such activity is deemed to be manufacture of a motor vehicle in termsof chapter note 5 of chapter 87 - a plain reading of the chapter note alongwith therelevant tariff headings makes it clear that the product cleared by the appellant afterbody building activity is a " manufactured " motor vehicle -considering the nature ofmotor vehicle, which is for transport of goods, the same has to be classified underHeading 8704 - on the second issue regarding availment of credit on inputs used bythe appellants, they have reversed credit attributable to inputs used in manufacture ofexempted goods - apart from the legal issue raised by the appellant that this pointwas not a subject matter of SCN, it is a settled position that reversal of creditamounts to non-availment - impugned orders are not legally sustainable, accordinglythe same are set aside - appeals are allowed : CESTAT [para 7, 9, 10]


Glamouroom Taps Pvt Ltd Vs CCE (Dated: June 20, 2017)

CX -Appellants are engaged in the manufacture of bathroom fittings, taps etc. - theleft over waste "dust/furnace dust" obtained during the course of manufacture ofthese items are sold for consideration - revenue of the view that such item isclassifiable under CETH 7404 0029 as waste of copper and scrap - duty demandedand confirmed, equal amount of penalty imposed - appeal to CESTAT.

HELD - It is now a well settled position of law that a product has to clear both the testof being manufactured as well as capable of being marketed - the admitted position inthe present case is that the appellant are a manufacturer of brass articles and cannotbe said to be involved in the manufacture of residual " furnace dust " which is arisingas a compulsory technical necessity - after careful perusal of the ratio provided by theSupreme Court in the case of Alcobex Metals Ltd., it is found that the attempt made inthe impugned order to distinguish the same is not sustainable - no merit found in theimpugned order and accordingly, the same is set aside - appeal allowed : CESTAT[para 3, 4]


Jai Balaji Industries Ltd Vs CCE & ST (Dated: June 19, 2017)

CX – Appellants are engaged in generation of electricity in their captive thermal powerplant, during which fly ash is also generated – proceedings initiated against the

appellants to demand and recover central excise duty on fly ash – demand confirmed,equal amount of penalty imposed – appeal to CESTAT.

HELD - Fly ash emerging during the course of generation of electricity cannot beconsidered as a manufactured product liable to Central Excise Duty – the dispute inthe present case is squarely covered by the findings of the Madras High Court in thecase of Mettur Thermal Power Station [ 2017-TIOL-237-HC-MAD-CX ] – accordingly,no merit found in the impugned order and the same is set aside – appeal allowed :CESTAT [para 5, 6, 7]


Jindal Steel And Power Ltd Vs CCE (Dated: June 16, 2017)

CX - Appellants, engaged in manufacture of iron & steel products, supplied thesedutiable structural items for setting up of mega power projects to various contractorswho were awarded contracts through International Competitive bidding and claimedexemption under notification no.6/2006-CE dated 1.3.2006 - Revenue objected to theclaim on the ground that the products supplied by the appellants are classifiable underChapter 72, whereas the exemption, which is in terms of customs notificationno.21/2002-Cus dated 1.3.2002 is applicable only when the goods are classified underChapter Heading 9801 - project import - it is also contended that the appellants didnot fulfil the condition given at serial no.86 of customs notification no.21/2002-Cus -proceedings initiated resulting in denial of exemption and imposition of CE dutyliability along with equal amount of penalty - appeal to CESTAT.

HELD - The first objection of the Revenue regarding the classification of the productsis not relevant for exemption to excisable goods supplied to mega power projects ascross-reference has been made for the exemption of similar goods when imported intoIndia in terms of notification no.21/2002-Cus - Project imports are specificallyclassifiable under Customs TH No.9801 and such Heading has no relevance to thedomestically manufactured products - regarding the second issue with reference tocondition no.86(c) of customs notification no.21/2002-Cus, the product ismanufactured by the appellants in India and supplied to mega power project - thesaid condition is applicable when the goods are imported into India - in such asituation, there is no relevance of applying such condition to the domesticallymanufactured goods - the exemption claimed under notification no.21/2002-Cus isrightly availed as they have submitted the certificate as required under conditionno.86 of the said notification - no merit found in the impugned order andconsequently the same is set aside - appeal allowed : CESTAT [para 3, 4, 5, 6]


Mangalam Cement Vs CCE (Dated: June 2, 2017)

CX – Cenvat credit on various input services namely insurance services, outdoorcatering services, rent a cab service and outward transportation service, have beendenied to the appellant – appeal to CESTAT. HELD – Matter is covered by theTribunal's decision in the appellant's own case [ 2017-TIOL-1157-CESTAT-DEL ]-further, for the present facts, Bombay High Court's decision in the case of UltratechCement Ltd. [ 2010-TIOL-686-HC-MUM-ST ] is also applicable – applying the above,the appellant is entitled to cenvat credit on the subject input services – consequently,the impugned order is set aside and appeal is allowed : CESTAT [para ]


Panasonic Energy India Company Ltd Vs CCE (Dated: June 2, 2017)

CX - Appellant manufactures and sells/exports dry battery cells - duringmanufacturing such goods, the appellant uses base paper as well as blister PVC films(as packing material to cover cells) - appellant procured base paper and blister PVCfilms and exported as such under LUT/bond procedure without reversingcorresponding cenvat credit - department's stand is that appellant is not entitled tocenvat credit of the duty paid on such goods, if they have been exported as such bythe appellant -SCNs issued, demand confirmed, hence appeal to CESTAT. HELD:Considering the instructions given in the CBEC's Manual of Instructions [para 3.4 ofchapter 5 which deals with cenvat credit], CBEC's Circular F.No.345/2/2000-TRUdated 29.8.2000 the appellant is entitled to cenvat credit for the goods exported assuch - impugned order is set aside and appeal allowed : CESTAT [para 3.3, 4]


Ranganatha Exports Vs CCE (Dated: June 19, 2017)

CX - 35B(1) Clause (b) of the CEA, 1944 - Appeals against orders relating to rebate ofduty of excise are excluded from the jurisdiction of the CESTAT - However, in thematter of interest on rebate there is no exclusion provided in the said -, therefore,Tribunal has jurisdiction to decide the appeal – as the issue involved in the presentcase is limited to the grant of interest on the refund which has already beensanctioned, there is no issue of rate of duty or interpretation of Notification No.56/2002-CE is involved in the present case, therefore, Single Member Bench hasjurisdiction to decide the case - 88 of the FA, 2008, and the Sixth Schedule to the FA,2008 clearly mandate that the amendment is effective for all purposes during theperiod 1.3.2002 to 7.12.2006, therefore, rebate to the extent of NCCD, AED andEducation Cess is payable during the said period – in the present case, rebate claimwas filed during February and April 2006 whereas the refund was sanctioned in June2009 – interest is payable u/s 11BB of the CEA, 1944 for the delay after expiry ofthree months from the date of filing application – Impugned order set aside andorder-in-original restored – Appeal allowed: CESTAT [para 4]



Desmi Equipments Pvt Ltd Vs CCE (Dated: June 29, 2017)

CX – In absence of compliance to the law placing normal BE, it is difficult for the taxadministration to extend CENVAT credit on Courier Bill of Entry – impugned orderupheld and appeal dismissed: CESTAT [para 3, 4]



Philips Electronics India Ltd Vs CCE (Dated: April 24, 2017)

CX – CENVAT/MODVAT – Appellant had written off certain inputs during the period1997-2001 and avers that in the absence of any specific provision in law, theavailment of credit thereon should not be denied – reliance placed in support on theBombay High Court decision in Hindalco Industries Ltd - 2011-TIOL-970-HC-MUM-CX– Revenue submits that Circular 645/36/2002-CX dated 16/07/2002 which clarifiesthat credit is not admissible on written off goods prevails. Held: To the extent theproposition of law is settled by the High Court is undisputed by Revenue – Further,Revenue's reliance on the Circular appears to be misplaced for the reason that theCircular became a public document on 16/07/2002 but the transaction in the instantcase is completed by 31/03/2001 – Demand set aside and Assessee appeal allowed:

CESTAT [para 5, 6]


Pepsico India Holdings Pvt Ltd Vs CCE (Dated: June 8, 2017)

CX – Appellant is a manufacturer of aerated waters - Sugar Syrup produced and usedwithin the factory of production – lower authorities have confirmed CE duty demandon Sugar Syrup – appellant before CESTAT. Held: There is no dispute regarding thepercentage of sugar concentration being less than 65% - In these circumstances, interms of Circular of the CBEC the said product would be marketable only if it containscitric acid, in terms of Circular of 03.07.1996 or if revenue produced any evidence ofmarketability in terms of Circular dated 12.03.2004 - It is apparent that no evidenceof marketability has been produced by the Revenue and concentration of sugar in thesugar syrup is not more than 65% - As Circulars issued by CBEC are binding on theRevenue, it is not open to the Revenue to hold that sugar syrup is marketable andliable to duty – impugned order is not sustainable, hence set aside – Appeal allowed:CESTAT [para 5]


CCE & ST Vs Hindustan Zinc Ltd (Dated: June 15, 2017)

CX -Respondents are engaged in the manufacture of zinc and lead - during the courseof process of refining the ore concentrate, silver crust emerges as a byproduct - afterfurther processing, silver as a marketable product emerges - the said silver is clearedby the respondent without payment of duty - revenue of the view that silver being anexempted product, the cenvat credit attributable to inputs and input services used inthe manufacture of such silver should be reversed in terms of provisions of rule57AD/rule 6, as applicable during the relevant time - periodical SCNs issued - therespondent reversed Cenvat credit attributable to such silver based on quantities i.e.in proportion to the weight of raw material attributable to weight of final product -exempted and dutiable -the original authority, vide impugned order, dropped theproceedings - applying the provisions of section 69 to 72 of Finance Act, 2010 whichintroduced retrospective amendments regarding the option given to the assessees forreversal of proportionate cenvat credit, the original authority held that therespondents are eligible for the said provision - the original authority held that thedemands issued to the respondent for recovery of 8% of value of silver is notsustainable - revenue before CESTAT


Skoda Auto India Pvt Ltd Vs CCE (Dated: May 26, 2017)

CX – Corporate entity board was allowed to be displayed by the dealers of Skodavehicles and one-time rent was collected from dealers for such display – Revenuealleges that this rent shall form part of the assessable value of the vehicles cleared.Held: No justification shown as to how the ‘rent for display' shall form part of theassessable value of the vehicles cleared – In absence of any justification, theincidence of levy being on the transaction value of the goods, levy of excise duty onthe rent collected for corporate entity display is inconceivable – appeal allowed:CESTAT [para 2]


SA Pharmchem Pvt Ltd Vs CC & CE (Dated: May 17, 2017)

CX - Issue is whether when the activity of repacking and relabeling of the duty paidgoods does not amount to manufacture, the appellant is entitled for the CENVATcredit in respect of the duty paid goods received by them. Held: Plain reading of rule16 of CER, 2002 reveals that even if the activity does not amount to manufacture theassessee is entitled to CENVAT credit of the duty paid on goods received by them andcleared on payment of duty which is equal to the CENVAT credit – impugned order setaside and appeal allowed: CESTAT [para 4]


Contata Solutions Pvt Ltd Vs CC, CE & ST (Dated: April 28, 2017)

ST - Revenue filed an application to rectify the mistake in final order - Revenuealleged that date of realization of the amount had been wrongly submitted by counselof the assessee - There was difference in the facts stated in final order and the factsstated in the appeal memorandum by assessee - No apparent mistake of facts on theface of records had been seen - Also allegation made against the counsel turned outto be wrong - No ambiguity was found when the facts stated in the final order werecompared with facts stated in the appeal memorandum: CESTAT


Milan Laboratories India Pvt Ltd Vs CCE (Dated: May 9, 2017)

CX - Claim of refund has been made under rule 5 of CCR, 2004 - The said rule doesnot, on the ground of exporters deriving benefits of schemes framed under theForeign Trade Policy, debar refund of credit - impugned order is not in accordancewith law and hence set aside - appeal allowed: CESTAT [para 5, 7]


Patel Profiles Pvt Ltd Vs CCE (Dated: June 15, 2017)

CX - CENVAT - Credit denied on the ground that the appellants are not shown as thepurchasers in the documents. Held: Rule 3 of the CCR clearly shows that it is notnecessary for the persons taking credit of any goods to be the purchaser of the samegoods - Only requirement is that he should receive those goods, the goods should beduty paid and used in or in relation to the manufacture of the final products. -Reliance on Rule 9 (4) of the CCR by the Revenue is also misplaced - impugned orderis set aside and appeal is allowed: CESTAT [para 5.1]


Mahalaxmi Exports Vs CCE (Dated: May 25, 2017)

CX - Both assessee engaged in manufacture of Textile Articles by processed Fabricsand Made-up Textile Articles and were selling said products in domestic market as wellas cleared for export to European countries - Assessee had availed benefit of Notfn30/2004-CE - On exported goods, they availed services of Overseas CommissionAgent and discharged ST paid on commission paid to said overseas Commission agent- Assessee had filed appeal against communication of Dept denying credit on InputServices - Dept. in communicating its decision recorded that assessee would not beeligible to avail credit in view of Rule 6(i) of CCR, 2004, but there has no elaboratenarration/discussion of facts of case and its implication on eligibility of benefit ofCenvat Credit on Input Services - In absence of complete facts, it is difficult to apply

principle of law laid down in judgments of REPRO India Ltd . 2007-TIOL-795-HC-MUM-CX and Drish Shoes Ltd . 2010-TIOL-350-HC-HP-CX - Therefore, matter remanded:CESTAT


Pioma Industries Vs CCE & ST (Dated: May 15, 2017)

CX - Assessee engaged in manufacture of Soft Drink Concentrates & were availingbenefit on nil rate of duty - Revenue classified the goods differently as classified byassessee and imposed duty demand and also sought to deny benefit of nil rate of duty- Held - There are only two choices for classifying the Soft Drink Concentrates, eitheras 'Sharbat' or 'Others' - Considering the descriptions and the wordings of the CETA,its correct classification would be under 'Others' - Where assessee pleaded forclassificationunder a different heading, the same holds no merit as per the materialgiven by them especially when there is a specific entry for 'Soft Drink Concentrates' -Therefore, the assessee's pleading for the said classification stands rejected -Consequently, benefit of nil rate of duty also denied - Nonetheless, assessee entitledfor cum duty benefit on sales made during period of dispute and also ofMODVAT/CENVAT on inputs used in manufacturing the goods - Matter remanded forre-quantification of demand accordingly: CESTAT (Para 2,4,6,7)


CCE Vs Nutricia India Pvt Ltd (Dated: June 14, 2017)

CX - Assessee engaged in manufacture of Edible preparation and were classifying thesame under Chapter Heading No. 2108.00 and were claiming abatement of 40% onMRP while Revenue views that goods manufactured by assessee contained MaltExtract and were flavored with Cocoa, therefore, same were classifiable under ChapterSub Heading No. 1901.92 where abatement available was 35% on MRP - UnderChapter Heading 19.01, title of heading includes food preparations containing MaltExtract and containing Cocoa less than 40% by weight - Said goods are dividedthrough single dash in two categories, one category is " put up in unit containers "and the other category is " others" - 1901.92 is sub set through double dash of "others " - Since goods manufactured by assessee are put up in unit containers,therefore, obviously they will not fall in category " others " which includes 1901.92:CESTAT


Mahindra Sanyo Special Steel Ltd Vs CCE (Dated: June 28, 2017)

CX - No demand made/upheld by Commissioner(A) - Appellant to make pre-deposit ofRs.2 lakhs for registering appealbefore CESTAT- Registry warned not to registerappeals with above defect - serious view to be taken against erring official - appellantdirected to make pre-deposit of Rs.2 lakhs within 30 days : CESTAT [para 1, 2]



Industrial General Products Pvt Ltd (Dated: June 15, 2017)

CX – CENVAT – Input Service – Rule 2(l) of CCR, 2004 - Term "input service" coversnot only the services used directly for manufacture of the final products but also

indirectly and in or in relation to the manufacture of final products - inclusive part ofthe definition also further expands the definition of input service – Telephone servicesand Chartered Accountant services are Input Services and tax paid thereon isadmissible as credit – appeal is allowed: CESTAT [para 5 to 7]


CCE Vs Just Textiles Ltd (Dated: May 23, 2017)

CX - Deemed credit - When the SCN is read, it makes clear that the appellant hasdesigned its clearance value in such a manner adding notional profit so that higheramount of deemed credit shall be availed by it - Revenue is, therefore, correct to saythat there was inflation of value of job worked goods to avail higher deemed creditwhich is not permissible - order of Commissioner(A) set aside - Revenue appealallowed: CESTAT [para 2]


CCE Vs Hi Rel Components India Ltd (Dated: April 24, 2017)

CX – SCN clearly brings out the manner in which the artwork, design and photo filmssupplied by the customers were used in manufacture of goods intended for the buyers- When the respondent could not rule out that the design, art-work/photo film werenot essential for manufacture of the intended goods while Revenue brings it out i.e.,design, art-work, photo films are integrally connected with the manufacture, valuethereof was bound to be added - Therefore, Revenue's contention to include cost ofabove elements to the assessable value is appreciable – Order of Commissioner(A) isset aside and adjudication order is restored – Revenue appeal allowed: CESTAT [para2, 3]


Bhalaria Metal Craft Pvt Ltd (Dated: June 23, 2017)

CX - Interpretation of the adjudicating authority is very narrow and defeats the entireobjective of the simplified export procedure prescribed by the Board - Board has veryconsciously prescribed the Sales Tax Form 14B and/or Form H as proof of export forthe reason that the said Forms are issued by the Sales Tax Department only inrespect of those goods, which are exported - if the supplies made by the appellant getcorrelated with the details bearing in the Sales Tax Form H and/or Form 14B, thesame must be accepted as proof of export and neither any duty can be demanded onsuch clearances nor the same is includible in the aggregate clearance value of theexempted goods under SSI exemption - certificates issued by the merchant exporter,which fortify the claim of the appellant that the goods cleared by them have beenexported and it cannot be brushed aside particularly when the appellants havesubmitted Form-H/Form-14B - Impugned order set aside and appeal allowed withconsequential relief: CESTAT [para 4, 5.4, 6]



Godfrey Phillips India Ltd Vs CCE (Dated: May 9, 2017)

CX - Disallowance of the claim of abatement of duty - Appellant had procured the

machine and had it unsealed for operation on 13 August 2010, however, after a day ofproduction, stoppage of further activities was intimated to the department andequipment was sealed w.e.f 14 August 2010 - original authority allowed abatement tothe extent of Rs.20,80,645/- on which duty liability of Rs.69,355/- was held as notpayable - however, first appellate authority relied upon rule 10 of the CapacityDetermination Rules, 2010 which permits abatement subject to the conditions ofmachine not used in production for a continuous period of fifteen days - therefore,abatement of Rs.8,32,258/- was denied and duty of Rs.9,01,613/- for the first 13days of the month was held as due - appeal to CESTAT. Held: First appellate authorityhas not considered the crucial fact that the equipment had been installed for the firsttime in the factory during the month and that appropriate abatement should alsocover the period during the year prior to the procurement and installation of themachinery - The requirement of a minimum of 15 days of non utilization would notobviously apply to the determination of the production capacity during the month ofinstallation - error committed by Commissioner (A) hence impugned order is set asideand appeal is allowed: CESTAT [para 4, 5]


Deepak Fertilizers & Petrochemicals Vs CCE (Dated: May 30, 2017)

CX - CENVAT Credit - Input Services - Miscellaneous fabrication or erection serviceused for repair and maintenance of plant and machinery is directly relating tomanufacturing activity; hence input service - Health service is statutorily required tobe provided for emergencies such as accident, injury to the employees duringproduction activity, therefore, male nurse service in the In-house dispensary offactory is an Input service, entitled to credit of tax paid - Travelling service by staff isdirectly related to the business activity, hence is an input service - Membershipservice of chemical magazine for up to date knowledge contributes to betterperformance of manufacturing, entitled to be treated as Input service - Appealsallowed: CESTAT [para 4.1, 4.2, 4.3, 4.4, 5]


CCE VS Bharat Petroleum Corporation Ltd (Dated: May 31, 2017)

CX - Law is well settled that claimant of benefit of a notification has to dischargeburden of proof in respect of the claim; that public grant of the notification cannot beused for a private benefit - matter is remanded to the adjudicating authority noticingsince Commissioner has misconstrued the provision of the notification benefit – onlykerosene of a specified smoke point i.e. 18 mm or more and ordinarily used asilluminant in oil burning lamp is exempt from levy of duty in terms of serial No. 31 ofNotification No. 3/2001-CE – Matter remanded: CESTAT [para 2]


Air Carrying Corporation India Pvt Ltd Vs CCE (Dated: June 15, 2017)

CX - CENVAT - Allegation that appellant had received invoices without receivingmaterials inasmuch as they had storage tank of capacity of 20KL but had shown stockof furnace oil in excess of 20KL - Appellant submitted that they had storage tank of40KL but had dismantled the same since not being used as there was no longer anyshortage of furnace oil - CENVAT credit denied and penalty imposed - appeal toCESTAT. Held: There is no evidence, whatsoever, in the shape of statements orpanchnama to substantiate the observations in the SCN that the appellants havestorage capacity of only 20 KL - Once the appellant had vide letter dated 20/06/2006pointed out that they had capacity of 40KL and had a capacity of 80 KL earlier, it was

the duty of the Revenue to investigate the matter and bring on record the evidence insupport of its allegation - since no such exercise conducted, proceedings fail -impugned order set aside and appeal allowed: CESTAT [para 4]


Vidyut Metallics Pvt Ltd Vs CCE (Dated: May 2, 2017)

CX – If one person hears and other decides, then the personal hearing becomes anempty formality – It is the duty of the Commissioner (Appeals) as prescribed inSection 35A(4) of the Central Excise Act, 1944 requiring him to pass an order inwriting, stating points for determination, the decision thereon and reason for thedecision - If he passes order following the prescribed procedure known to law, theorder is said to have been passed in accordance with law - Matter remanded: CESTAT[para 1, 2]


Liberty Shoes Ltd Vs CCE (Dated: June 5, 2017)

CX - Statement recorded of authorised signatory is an admissible evidence – CCE whoframed the charges in SCN demanding duty has ignored this admissible evidence and,therefore, SCN is not tenable in law - demand proposed is unsustainable - appealallowed with consequential relief: CESTAT by Majority [para 25, 26]



Shubhalakshml Polyesters Ltd Vs CCE & ST (Dated: February 27, 2017)

CX - Assessee had availed CENVAT Credit of ST paid on GTA service - Alleging thatcredit availed on GTA service is not admissible, demand notice was issued forrecovery of credit with interest and proposal for penalty - No specific finding has beenrecorded analyzing the evidences as to whether sale of the manufactured goods is atthe factory gate or at the premises of the buyer as per the agreement for sale,purchase Order and invoice - Thus, all these appeals remanded to original authority toexamine the said aspect and then consider the eligibility of CENVAT Credit on GTAservices by ascertaining the place of sale in light of observation and circulars issuedby the Board - Impugned orders are set aside and appeals are remanded toAdjudicating authority: CESTAT


Flexo Foam Pvt Ltd Vs CCE (Dated: May 31, 2017)

CX - Assessee filed refund claim under section 173S of CEA, 1944 on the ground thatafter having supplied berths to various organs of Railways as well as various statetransport authorities, their invoice values were reduced by them after deductingamount on account of liquidated damages - Said claim of assessee was rejected byAssistant Commissioner - Issue of whether the amount deducted by buyer on accountof liquidated damage should be allowed as deduction on transaction value has beensettled by Tribunal in favour of assessee in case of Victory Electricals Ltd. 2013-TIOL-1794-CESTAT-MAD-LB - Assessee are entitled to refund on merits - However, refundhas to cross the barrier of unjust enrichment for which burden is on assessee toproduce necessary documentary evidence that incidence of duty has not been passedon by assessee to any person: CESTAT


CCE Vs Sunehari Oral Care (Dated: June 1, 2017)

CX - Assessee have different manufacturing units engaged in manufacture oftoothpaste and tooth powder - They are manufacturing excisable items with their ownbrand name and also brand name of others - Dispute relates to eligibility of assesseeto avail exemption under Notfn 8/2003-CE - Assessee had manufactured and clearedgoods both for export as well as for domestic use - There can be no dispute regardingtreatment of export goods and credit available to such manufacture - Regardingdomestic clearances, clearances with brand name of another person are not within theambit of SSI notfn - Credit availed for manufacture of goods with other's brand nameas well as for export is of no consequence, to decide eligibility of assessee in respectof domestic clearances in terms of said notfn - Once excise duty was paid on suchgoods, SSI unit is entitled for credit of excise duty paid on such goods - Availment ofsuch credit will not disentitle SSI units, exemption for goods manufactured on theirown account: CESTAT


CCE Vs Heidelberg Cement India Ltd (Dated: June 29, 217)

CX - Renting of road is an Input Service - road is used for transportation of goodswhich is directly related to the manufacture of final product in their factory - eventhough it is used outside the factory, but if it is used in or in relation to themanufacture of final product and overall business activity, the credit is in respect ofsuch service is admissible in terms of Rule 2(l) of CCR, 2004 : CESTAT [para 4]



CC & CE Vs Sanghi Industries Ltd (Dated: May 19, 2017)

CX - Assessee set up a manufacturing unit producing mineral water and De-mineralized (DM) water - Said manufacturing unit namely Desalination Plant is awayfrom clinker unit/grinding unit of assessee - Revenue's stand is that for use of DMwater in assessee's unit as per Notfn 67/95-CE , assessee is required to pay duty @16% which is on consumption of DM water for further manufacturing of mineral waterwhich attracts nil rate of duty - Assessee also came in appeal against same impugnedorder and Tribunal vide its Order dated 26.6.2008 set aside the impugned order andremanded the matter - Considering the plea of Revenue that adjudicating authority didnot properly examine the facts and the facts that impugned order was set aside earlierby Tribunal vide its order dated 26.6.2008, subject matter raised deserves to beremanded for de novo decision by original adjudicating authority who shall decide thematter afresh: CESTAT


CCE Vs Kay Pan Masala Ltd (Dated: January 13, 2017)

CX - Assessee intimated the revenue that 91 single track packing machines areavailable in factory and five packing machines are to be further received on or before01/06/2009, thus totalling 96 - Out of these 96, 81 machines to be operated for monthof June - Accordingly, on 01/06/2009, on verification, balance 15 machines, not to beoperated were properly sealed and were removed to a separate room in factorypremises and remaining 81 single track packing machines stood installed formanufacture of Gutkha w.e.f. 01/06/2009 - Accordingly, Assistant Commissioner waspleased to determine duty payable for month of June @ 12.50 lakh per machine permonth for 80 machines - MRP Rs. 1 and Rs. 19 lakh per machine per month for onemachine - MRP Rs. 1.50 - Commissioner (A) noted that none of machines shown

sealed and non-operative were found running or reinstalled or with broken seal at anypoint of time - There was no allegation of any foul play on part of assessee - It was thedecision of proper officer under Rules to decide as to what was feasible at given timeor specific hour - On being satisfied, proper officer did not remove the machine fromfactory and instead removed them to another room after packing in duly sealedcondition - It is also noticed that such machines are not easily movable, need a craneto move the machines - No new grounds are raised before Tribunal, thus groundsraised by Revenue are untenable: CESTAT


Nitin Spinners Ltd Vs CCE (Dated: May 26, 2017)

CX - Appellant, a 100% EOU, cleared combed cotton/sliver falling under heading 52.03of the CET without payment of duty in DTA- department of the view that appellant wasrequired to pay duty on such goods in terms of sr. No.4 of notification no.23/2003dated 31.3.2003 -appellant arguing that goods cleared in DTA will be liable to paymentof customs duty only when they are subjected to process within the meaning of‘manufacture' as defined under section 2(f) of the CEA - appellant claiming that thesaid goods cannot be considered as ‘manufactured product' since no new goods hasemerged whatsoever in the process undertaken in their factory - however, the lowerauthorities confirmed such demand of duty - appeal to CESTAT: HELD -In the presentcase, the process of making cotton sliver from fibre, may not amount to manufactureas per section 2(f) of the CEA but the appellant has been permitted to produce thesame and export - as per the 100% EOU scheme, if such goods are cleared into DTA,customs duty will be payable with benefit of notification no.23/2003-CE - following theTribunal's decision in the case of STL Exports Ltd. vs. CCE, Indore, duty demandupheld - impugned order is sustained and appeal rejected : CESTAT [para]


CCE Vs Delton Cables Ltd (Dated: April 20, 2017)

CX - Assessee filed refund claims under Rule 5 of CCR, 2004 of accumulated cenvatcredit lying untilised in their cenvat credit account on the ground that they have madeclearances to various mega projects/100% EOUs and cleared goods to merchantexporter against CT-1 certificates - Sole ground taken by Revenue is that due tocontrary decisions of High Courts and assessee has not executed bond for export ofgoods, the refund is to be rejected - Ground taken by Revenue are contrary to law asdecision of M/s Shilpa Cooper Wires has been examined by High Court of Karnataka incase of M/s Nash Industries - 2017-TIOL-588-HC-KAR-CX - As the issue on account ofclearances to 100% EOU mega projects has already been attained finality, therefore,Commissioner (A) has rightly allowed the refund claims of assessee - There is nocondition on manufacturer who cleared goods to merchant exporter against CT-1certificate to execute any bond, therefore, no merit found in Revenue's appeal, same isdismissed: CESTAT


Hindustan Insecticides Ltd Vs CCE (Dated: December 29, 2016)

CX - Whether assessee is required to pay duty /reverse the Cenvat Credit, so availedon input goods and finished products written off in the books - Period involved in thiscase is from 2002-2003 to 2003 -2004 while provisions for writing off value of inputs /capital goods were inserted under Rule 3(5B) in CCR, 2004 by notfn 26/2007 CE (NT) -Since period covered in this case is prior to insertion of sub rule (5B) in Rule 3, theembargo created therein is not applicable retrospectively for denying cenvat credit toassessee - With regard to packing material, inputs and finished goods, assesseesubmits that embargo under said Rule will not have any application inasmuch as thosegoods are very much available and were not removed from factory - However, thisparticular aspect was not dealt with by lower authorities, thus, matter remanded:CESTAT


Force Motors Ltd Vs CC, CE & ST (Dated: May 8, 2017)

CX - Assessee engaged in manufacture of motor vehicle and parts thereof and availingcredit of duty paid on various inputs in terms of CCR, 2004/CER, 1944 - Dispute is withreference to liability of assessee to reverse the credit on inputs, which Revenueclaimed has been cleared by assessee without use in manufacturing process and shownin their accounts as "written off" - Assessee written off the full value of some of inputsstating that these are material loss of bought out items, which are rejected/scrapped -Accounts maintained by assessee to this effect is sole basis for proceedings againstthem - There is no other evidence to allege that inputs on which credit has beenavailed were in fact cleared as such - When duty paid inputs were issued for process ofmanufacture and later, during the course of usage, either got damaged or found notupto the mark, these are rejected and scraped - At the time of clearance as scrap,duty as applicable, are discharged - As such, in terms of legal principle, denial of creditis not justifiable - No justification found for denial of credit as confirmed by impugnedorder - Accordingly, impugned orders are set aside: CESTAT


BPL Technovision Pvt Ltd Vs CCE (Dated: February 13, 2017)

Central Excise - manufacture of both dutiable and exempted final product usingcommon inputs on which CENVAT credit was availed - At the time of procurement ofcommon inputs, they could not maintain separate inventory of manufacturingexempted solar lanterns - Subsequently, they reversed the CENVAT credit attributableto inputs used in the manufacture of exempted solar lanterns – SCN issued to theappellant for violation of Rule 6(3)(b) of CENVAT Credit Rules (CCR) and the appellantswere required to pay an amount equal to 10% of the total price excluding sales taxand other taxes, if any, paid on such exempted final product – Original authoritydropped the proceedings and Commissioner (A) allowed the appeal of revenue.

Held: the issue is squarely covered in favor of the appellant by the decisions cited byappellant – Hence, appeal allowed.


Ascent Meditech Ltd Vs CCE (Dated: May 12, 2017)

CX - Assessee engaged in manufacture of Orthopaedic Rehabilitation Aids andHealthcare Products including " Heating Pads/Belts/Bands etc " - All these productswere classified by assessee under Tariff item 9021 10 00 of CETA, 1985 with nil rate ofduty - Whereas Department's stand is that Heating Belts deserve classification underTariff Item No.9018 90 99 as " other electro-medical apparatus, appliances ", andBandages under Tariff Item No.3005 90 40 of CETA - Matter is squarely covered byTribunal's decision in assessee's own case which has also been affirmed by SupremeCourt - Supreme Court dismissed the Department's appeal against said decision ofTribunal - In case of other product namely, Bandages, assessee's contention is thatsince they do not manufacture subject goods on which duty has already been paid,question of demand of duty on such bandages does not arise - On this issue also,Tribunal has given the decision in same case of assessee which has been affirmed bySupreme Court as mentioned earlier - Impugned order is set aside and appeal allowed:CESTAT


Sanghi Industries Ltd Vs CCE & ST (Dated: May 15, 2017)

CX - Assessee is clearing Cement to various bulk buyers in package form of 50 kg bagwith specific declaration on bag 'Not for Resale' and goods are not meant for furtherretail sale therefrom; but are to be consumed by buyers for their own use - Assesseeclaimed that as per provisions of Rule 2A(b) of Standards of Weights & Measures(Packaged Commodities) Rules, 1977, the goods were cleared to buyers which arecovered under category of industrial/institutional buyers mentioned at (a) and (b) ofexplanation to Rule 2A of SWM Rules - Department vide impugned Orders has denied

the benefit of Notfn 4/2006-CE for sales made to various categories of bulk buyers:-

Social/Educational, religious and charitable organizations - Since these organizationshave bought cement for use in construction of buildings, hospitals, community hallsand educational centres for providing services to public, this category of buyers appearto be rightly covered under category of 'institutional consumer'.

Infrastructural development projects - There cannot be two opinions that buyers in thiscategory would be covered under category of 'institutional consumer'; as infrastructuredevelopment projects are integrally linked with construction industry, which is incategory of a service industry.

Government bodies - Facts on record mention that bulk buyer is Gujarat Government'sGSCSCL who is working as a nodal agency for procuring cement for supply toGovernment offices/Boards/Corporation for their development and infrastructure worksas per indent received from concerned department - Such supplies to GSCSCL appearto be covered under category of supplies to 'institutional consumers' as these are usedfor 'construction activity' by such entities of Gujarat Government.

Sales made to various categories of buyers are covered under Rule 2A of SWM Rules,1977 and such goods are eligible for benefit of Notfn 4/2006-CE: CESTAT


Siemens Ltd Vs CCE (Dated: June 13, 2017)

CX – Restoration of credit is mere accountal that was not required to be processed inaccordance with Section 11B of Central Excise Act, 1944 - claim for refund, the showcause notice for rejection, the adjudication order and the impugned order are notsustainable in law - appellant is at liberty to adjust the CENVAT credit to the extentpermitted by the CENVAT Credit Rules, 2004 – Appeal disposed of: CESTAT [para 6 to9]



CCE Vs Ruby Mills Ltd (Dated: May 2, 2017)

CX – If one person hears and other decides, then the personal hearing becomes anempty formality – It is the duty of the Commissioner (Appeals) as prescribed in Section35A(4) of the Central Excise Act, 1944 requiring him to pass an order in writing,stating points for determination, the decision thereon and reason for the decision - Ifhe passes order following the prescribed procedure known to law, the order is said tohave been passed in accordance with law - Matter remanded: CESTAT [para 1, 2]


Biochem Pharmaceutical Industries Vs CCE & ST (Dated: May 9, 2017)

CX - Assessee engaged in manufacture of Pharmaceutical products - The manufacturedgoods are subjected to duty by determining its value under Section 4A of CEA, 1944i.e. on MRP based assessment and also under Section 4 in relation to medicamentssupplied to Government hospitals and institutional buyers viz. Railway, BHEL and BPCL- Issue relates to assessment of medicaments cleared to hospitals and otherinstitutional buyers without printing/affixing RSP on primary packings/strips containingmedicaments be subjected to assessment under Section 4 or 4A - Anticipating suchtypes of disputes in its Circular dt.20.02.2002 , Board has already clarified anddirected to field formation to obtain necessary clarification/opinion from Stateauthorities who are entrusted the task of administration of relevant legislation -Adjudicating authority ought to have obtained/collected opinion of Drug ControllerAuthority of respective State Govt. and accordingly proceeded with the matter - Matter

remanded to re-adjudicate the case: CESTAT


Mukund Brass Industry Vs CC & CE (Dated: May 19, 2017)

CX - Assessee engaged in manufacture of excisable goods namely Brass Bars and Rodsof Brass - Commissioner (A) holds the goods to be classifiable under Chapter Sub-Heading 7407.29 of Schedule to CETA, 1985 as " profiles of Brass " and also confirmedthe duty of excise for the period April 1995 to 22.7.1996 - Though the Departmentdrew sample for subject goods, same was not produced when assessee made arequest in this regard before original adjudicating authority - Assessee pleaded thatwhen subject item does not have uniform cross-Section along its whole length, itcannot be covered under definition of " Profile " as given under Clause (e) of ChapterNote 1 of Chapter 74 - Subject matter needs fresh examination: CESTAT


Sabero Organics Gujarat Ltd Vs CCE & ST (Dated: June 13, 2017)

CX - Assessee are manufacturer of chemicals and had cleared the goods for job workto different job worker in accordance with Rule 4(5)(a) of CCR, 2004 - Inputs sent tojob workers following the procedure laid down under Rule 4(5)(a) did not come backfrom job workers' premises within 180 days - Hence, demand was issued to assessee -Assessee contends that inputs after being used for processing in job workers' premiseshad been destroyed in an accident of fire, accordingly, an application for remission ofduty involved on said goods had been filed with Department under Rule 21 of CER,2002, which is still pending - It is also their contention that they have already reversedmajor portion of CENVAT credit involved on inputs contained in-process goods lost infire at job workers' premises - Matter remanded to Adjudicating authority to take upthe present application along with remission application for disposal: CESTAT


Sagar Drugs and Pharmaceuticals Pvt Ltd Vs CCE (Dated: May 25, 2017)

CX - During the period from March 2003 to February 2007, assessee had clearedinputs 'as such' on payment of duty, adopting transaction value, instead of reversingcredit availed on such inputs at time of its receipt in factory - Demand confirmed forrecovery of excess duty which was recovered by them from customers under Section11D(2) of CEA, 1944 - Gujarat High Court after considering the relevant provision insimilar facts and circumstances in Inductortherm (I) Pvt. Ltd. - 2012-TIOL-929-HC-AHM-CX observed that excess amount collected from customers is required to bedeposited u/s 11D of CEA, 1944 - No justification found for imposition of penalty:CESTAT


PK Singhal Vs CCE (Dated: April 27, 2017)

CX - Appellant worked as a manager in that company where main assessee's firmsupplied goods and allegedly involved in evasion of excise duty reason being mainassessee suppressed the material facts and supplied the goods to that firm whereassessee was a manager without the payment of duty - Penalty was imposed underRule 209A of the CER, 1944 - Held - Considering the findings of the appeal in the caseof main assessee (M/s Rathi Industries Ltd) penalty imposed on assessee was notsustainable and the same was set-aside: CESTAT (Para 2,4,5)


Goyal Energy And Steel Pvt Ltd Vs CCE (Dated: April 21, 2017)

CX - Assessee is a registered manufacturer, engaged in manufacture of MS ingots andhot rolled products of iron and steel - This is a clear case of non-accountal of receipt ofraw material and thereafter clandestinely manufacturing and clearing exempted goodsviz. MS ingots and hot rolled products / bars of iron and steel by assessee - When thefact of receipt of raw material which was produced and supplied by ISPPL has been

proved by statement of Shri Deepak Agrawal, there is no defence available withassessee that said raw material was not received by them - Use of said raw material inmanufacturing is also confirmed by statement of Director in his statement recordedunder Section 14 of CEA, 1944, which is an admissible evidence - Said statement hasnot been retracted all along by Shri Deepak Agrawal - Further, assessee havevoluntarily deposited the duty payable on such manufacturing before the Revenueissued SCN - Further, there is no evidence produced by assessee to indicate that therewas no receipt of said raw material and there was no manufacturing on their part outof said raw material - Statements on record proved that subject goods weremanufactured for which they have paid duty voluntarily - Shri Deepak Agrawal hasbeen found to be controlling all activities of assessee and he has been the main personresponsible for evasion of duty and for suppression of production and clandestineremoval of said goods from assessee's factory, thus wilfully, contravening provisions ofCentral Excise Act and the Rules made thereunder - Taking the lenient view, penaltyreduced: CESTAT


Arasan Match Industries Vs CCE (Dated: February 21, 2017)

CX - Nothing was stated in SCN as to how there is short-payment - Law is well settledthat an allegation without basis shall have no existence - Accordingly, in so far as thisaspect is concerned there shall not be any demand on that count - When documentscame to public record, that should have been examined to reach to the conclusion, butAuthorities below failed - Apart from this, when SCN is read it says only copies ofdocuments were not furnished - Subsequent development to SCN was the report offield showing relevant documents were furnished by assessee - Therefore, sending thismatter back for very negligible amount of Rs. 61,482/- would only be a waste of publictime and waste of public money for which, the appeal is allowed: CESTAT


WH Wintech Pvt Ltd Vs CCE (Dated: June 9, 2017)

CX - Assessee engaged in manufacture of PVC doors - Subject appeal mainly relates topayment of duty in cash through their PLA account, consignment wise, when assesseefailed to pay duty of Central Excise on goods cleared by 5th of following month as perprovisions of Rule 8(3) of CER, 2002 - Rule 8(3A) provides that if assessee defaults inpayment of duty beyond thirty days from due date, they have to pay excise duty foreach consignment at the time of removal, without utilising Cenvat Credit till the datethe assessee pays outstanding amount including the interest thereon - Rule 8(3A)further says that in event of any failure, it shall be deemed that such goods have beencleared without payment of duty and consequences and penalties as provided in theserules shall follow - Supreme Court in its interim order dated 24.9.2015 in case ofIndsur Global Ltd. has stayed the Gujarat High Court decisions and has restrained thepetitioner which is Union of India in said order to recover the amount mentionedtherein from assessee viz . Indsur Global Ltd. - This is a fit case to be remanded backto original adjudicating authority for fresh decision as and when Apex Court decidesthe subject matter: CESTAT


EM Electronix Pvt Ltd Vs CCE, ST & CC (Dated: December 6, 2016)

CX - Assessee engaged in manufacture of electronic measuring and testingequipments/machinery like CPU, module, rely card and control station and clearedcertain goods availing benefit of exemption at nil rate of duty under Notfn 10/1997-CEfor research in medical use and under Notfn 6/2006-CE and No.48/2004-CE - Whetherreversal of proportionate credit on input services used in manufacture of exemptedgoods would be sufficient compliance as per retrospective amendment to Rule 6 ofCCR, 2004 by Section 73 of FA, 2010 - After amendment to Section 73 by which Rule 6was amended retrospectively and as per amended Rule, if an assessee reverses theproportionate credit in respect of input services used in relation to manufacture ofexempted goods, then it would be a full compliance of said provision - By followingsaid amendment, Tribunal and High Court held that assessee has to reverseproportionate CENVAT credit and that would tantamount to compliance of provision of

CCR - Impugned order is not sustainable in law as assessee has reversed CENVATcredit by following the procedure as prescribed in Rule 6 of CCR: CESTAT


Zahir Tyres India Pvt Ltd Vs CCE (Dated: May 24, 2017)

Central Excise - SSI Exemption - The appellant is engaged in the manufacture of tyres,which are cleared under their own brand name and also in the brand name of JK Tyres- during the material period the appellants cleared the tyres with the brand name of JKTyres, on payment of full rate of duty; however, in respect of tyres cleared with theirown brand name, the appellants availed benefit of SSI Notification NO.8/2003-CE dt.01/03/2003, which was available subject to the condition that no credit of duty oninputs under Rule 3 or Rule 11 of the CENVAT Credit Rules 2002 is availed - Theappellant was availing such credit on inputs and at the time of clearance of tyres withtheir own brand name without payment of duty, they reversed 10% of the value oftyres and for clearance of goods with the brand name of JK Tyres, they made use ofthe credit for making payment of duty without the SSI concession - Revenue viewedthat the appellant will not be eligible for the benefit of SSI Notification in view of thefact that CENVAT credit on inputs stand availed by the appellant - Value basedexemption denied, duty demand confirmed with interest and penalty under Sec 11AC;Commissioner (Appeals) granted partial relief by reducing the penalty alone;culminating in the instant appeal.

Held: In the case of Asha Rubber (P) Ltd. as well as Franco Italian Co. Pvt. Ltd. reliedupon by the appellant, the view taken is that the assessee becomes eligible for the fullduty exemption under the SSI scheme as long as he reverses the modvat credit takenwith regard to inputs which were utilized for the manufacture of duty free goods -However the Supreme Court in the case of Nebulae Health Care Ltd. has delivered anauthoritative pronouncement on the subject after considering the variouspronouncements including the Apex Court's own decision in the case of Ramesh FoodProducts and Kamani Food; holding inter alia that an assessee who wishes to avail SSIbenefit under Notification no. 08/2003 as well as pay duty on branded goods will beeligible to CENVAT Credit only in respect of those goods which are cleared, bearing thebrand name of another for which full payment of duty without concession is specified -In the present case, the CENVAT credit on inputs stand availed for those which areused commonly for branded and other goods - Although the appellant reversed anamount @ 10% of the value exempted goods, as provided in Rule 6(3) of the CENVATCredit Rules 2004, the prescription made in CENVAT Credit Rules cannot be importedinto the conditions of Notification No.8/2003 - the appellant has failed to satisfy theconditions specifically prescribed in para 2(iii) of the Notification No.8/2003 andconsequently, they are ineligible for the SSI exemption - The impugned order isaccordingly upheld. [Para 9-12]


Manoj J Arya Vs CCE (Dated: June 13, 2017)

CX - As there is no proceeding under sub-section (1) of Section 11A against theappellant, the benefit of proviso to sub-section (2) of Section 11A is not available tothe appellant - Penalty does not stand abated even if the main noticee has paid theentire duty amount along with interest and 25% penalty within 30 days of the order -Penalty imposed u/r 26 of CER on the appellant is upheld - Appeal dismissed: CESTAT[para 4.1, 4.2]



Solaris Chemtech Industries Ltd Vs CCE & C (Dated: May 26, 2017)

CX - On the basis of audit observation, SCN was issued to assessee alleging that theyhad written-off as on 31.3.2007, inventory/stock worth Rs.3,97,55,444/-, out of whichinventory/stock amounting to Rs.2,71,01,191/- being cenvatable involving CENVAT

credit of Rs.44,22,914/- and on basis of Circulars issued by CBEC dated 22.2.95 and16.7.2002, same is recoverable with interest and penalty - Issue has been consideredby Gujarat High Court in case of Ingersoll Rand (India) Ltd. - 2012-TIOL-1107-HC-AHM-CX - In absence of any such authority under the rules, the C.B.E. & C could nothave issued circular for reversal of credit - In absence of such statutory provisions,merely on strength of Board's circulars, it would not be open for Department to enforcereversal of Cenvat credit: CESTAT


CCE Vs Imperial Auto Industries (Dated: April 17, 2017)

Central Excise - CENVAT Credit - the respondent is engaged in the manufacture ofmotor vehicles parts - During scrutiny of the records, it was observed that therespondent availed credit on courier/freight services used for delivery/transportation ofthe goods from port of export to foreign buyers premises - Revenue viewed the sameinadmissible, and proposed denial of credit and demand for its recovery with interestand penalties - The proposals were confirmed in adjudication, but set aside byCommissioner (Appeals) on the grounds that the goods have been sold by theappellant on Delivered Duty Paid (DDP) basis which means that the seller bear all thecost and risks involved in bringing the goods to the place of destination and has anobligation to clear the goods not only for export but also for import, to pay any dutyfor both export and import and to carry out all Customs formalities; and that theownership of the goods remained with the appellant till delivery of these goods to thebuyer - Aggrieved Revenue agitated the OIA herein.

Held: Revenue has filed this appeal on the ground that in the case of export of thegoods, place of removal is port of export and to that extent, they have relied on para 4of the circular dated 28.2.2015 clarifying that if the seller does not reserve its right fordelivery of the goods then destination in the case is the port of export is place ofremoval of the goods - however, the respondent in the instant case has sold the goodson Delivered Duty Paid basis which means that the seller bear all the cost and risksinvolved in bringing the goods to the place of destination and has an obligation to clearthe goods not only for export but also for import, to pay any duty for both export andimport and to carry out all Customs formalities - The ownership right of the goodsremains with the respondent; hence neither the CBEC circular nor the decision in thecase of Khanna Industrial Pipes is relevant to the facts of the present case - in the caseof Ambuja Cements, the Punjab & Haryana High Court has examined the issue andheld that the circular No.97/6/2007-ST dated 23.8.2007 lays down three conditions,namely, (a) the ownership of goods and the property of the goods remained with theseller of the goods till the delivery of goods in acceptable condition to the purchaser athis door step (b) the seller bore the risk of loss or damage to the goods during transitto the destination and (c) the freight charges were integral part of the price of goods -Admittedly, the respondent has compiled with these conditions, therefore theCommissioner (Appeals) has rightly allowed the credit on courier and transportationcharges; there is no infirmity in the impugned order which is upheld. [Para 6-9]


Birla Corporation Ltd Vs CCE & ST (Dated: June 16, 2017)

CX -Cenvat credit on procurement of capital goods from 100% EOU denied to appellant- the lower authorities held that the appellants are not eligible to take credit of basiccustoms duty as the same is not one of the listed duties in terms of rule 3 of CenvatCredit Rules, 2004 - equal amount of penalty imposed on the appellants : HELD - thesecond proviso inserted under rule 3(7)(a) of the CCR w.e.f. 7.9.2009 vide notificationno.22/2009-CE(NT) makes it clear that only additional duty (CVD) is eligible for cenvatcredit, in a situation like the present one - there is no provision to take credit of basiccustoms duty - the decision of the Tribunal in the case of Molex India Pvt. Ltd. - 2017-TIOL-158-CESTAT-BANG is not discussing the implication of this proviso - no meritfound in the present appeal - the issue involved is one of interpretation of the legalprovisions of technical nature - the credits availed were reflected in the records as well

as returns filed by the appellant - penalty imposed on the appellants set aside - appealdismissed on merit and impugned order modified - appeal disposed of accordingly :CESTAT [para 4, 5, 6]


Ultratech Cement Ltd Vs CCE, ST & C (Dated: January 24, 2017)

CX - Assessee engaged in business of packing of bulk cement into retail bags - Issueinvolved in present appeal is whether assessee are entitled to CENVAT credit availedon steel and cement used in construction of storage silos and packing plant - In view ofdecision of Karnataka High Court in case of SLR Steels Ltd - 2011-TIOL-892-HC-KAR-CX, it has been held that storage tanks is a capital goods specified in Rule 2(a) of CCR,2004 - Further, in case of Dalmia Cement Ltd - 2015-TIOL-587-CESTAT-MAD, DivisionBench of Tribunal has held that cement and steel used in manufacture of storage tanks"silos" which is used for storage of cement and various raw materials are eligible forCENVAT credit as inputs under Rule 2(k) of CCR - In case of Monnet Ispat and EnergyLtd - 2015-TIOL-2850-CESTAT-DEL, it has been held that assessee is entitled toCENVAT credit on iron and steel items used for fabrication of component andaccessories of various machines and CENVAT credit cannot be denied on the groundthat these capital goods become part of immovable property after installation -Therefore, issue is squarely covered in favour of assessee and therefore, impugnedorder denying CENVAT credit on silos and storage tanks is not sustainable in law:CESTAT


Uflex Ltd Vs CCE (Dated: December 16, 2016)

CX - Assessee engaged in manufacture of Polyester Chips, Printing ink and Adhesives,the final products - During disputed period, cenvat availed capital goods namely, DMTMelter Heat Exchanger was removed by assessee under cover of invoice to its sisterconcern - Disputed capital goods namely, DMT Melter Heat Exchanger was procured byassessee and after use of such capital goods for more than 10 years, same wereremoved on 23.11.2007 to its sister unit - Particulars of credit taken and other details,were duly reflected in invoice issued by assessee - Thus, it is not a case that assesseehad suppressed the fact regarding removal of capital goods with intention to evadepayment of Duty - Since, as a registered assessee, assessee has complied withrequirement of Central Excise statute on removal of used capital goods from factory,the charges of suppression and misstatement cannot be alleged, justifying invocationof extended period of limitation, for issuance of SCN - Therefore, proceedings initiatedby Department for confirmation of cenvat demand and for imposition of penalty isclearly barred by limitation of time: CESTAT


Hindalco Industries Ltd Vs CCE & C (Dated: June 12, 2017)

CX - A SCN was issued to assessee for recovery of Cenvat Credit alleging that ST paidon Document Processing charges in relation to export of goods was not eligible toCenvat Credit being not an 'Input Service' as defined under Rule 2(l) of CCR, 2004 -Issue is no more res integra being covered by decision of Tribunal in case of ST. JohnStevedoring & Yard Management P Ltd 2015-TIOL-2290-CESTAT-MAD - Also, in arecent Circular dtd 28.2.2015, CBEC has clarified that in case of clearance of goods forexport by manufacturer-exporter, place of removal would be the port and accordinglyCENVAT Credit paid on ST for services relating to export of goods is admissible -Gujarat High Court in case of Dynamic Industries Ltd - 2014-TIOL-1692-HC-AHM-STallowed Cenvat Credit on amount of ST paid on Input Services viz., Customs HouseService, Shipping Agent Service and Container Service used in relation to export offinished goods by manufacturers: CESTAT


Minda Sai Ltd Vs CCE (Dated: June 5, 2017)

Central Excise - Manufacture of Wiring Harness - For manufacture of Wiring Harnessthe inputs were insulated Electrical Wires & Terminals - small cut pieces and rejectedpieces of insulated wire were generated as scrap which were not usable – it appearedto revenue that the waste and scrap of Electrical Wires was classifiable under TariffItem No. 85489000 and therefore, three SCN's were issued – Original Authority heldthat in view of insertion of explanation to Section 2(d) of Central Excise Act, 1944through, Finance Act, 2008 the scrap became marketable and therefore, it becameclassifiable under Tariff Item No. 85489000 – On appeal, the same was upheld –Hence, the present appeal.

Held: The Original Authority had held that waste and scrap of insulated electrical wiresdoes not fall under Tariff Item No. 85489000 and said order of Original Authority wasnot challenged by Revenue and same has reached finality - For subsequent periodwaste and scrap cannot be classified under Tariff Item No. 85489000 - Therefore, theimpugned Orders-in-Original & Orders-in-Appeal are not sustainable - Therefore, allthe appeals are allowed – (Para 5).


Facor Alloys Ltd Vs CCE & ST (Dated: May 31, 2017)

CX - Assessee is manufacturer of ferro Alloys i.e. High Carbon Ferro Chrome anddischarged CX duty on them and availing cenvat credit of capital goods, inputs andinput services - Whether assessee is eligible for Cenvat credit of ST paid on variousconsultancy services received by them or otherwise - On perusal of records, it is foundthat services for which ST liability was paid does not seem to be input services whichare in line in manufacturing of final products of assessee - As regards to limitation, itwas for department to call for details and verify as to whether details which have beensubmitted in returns are correct or otherwise - In absence of any communication fromdepartment to assessee as to correctness of cenvat credit availed, SCN seeking thedemand of cenvat credit availed during the period is blatantly hit by limitation -Impugned order is liable to be set aside only on limitation: CESTAT


Gandhilon Texturisers Vs CCE, C, ST (Dated: May 19, 2017)

CX - Assessee had collected/charged extra charges under head of "Permissible underSection 4" Transportation, Octroi, and Packing charges from customers - Dept alloweddeduction of transportation and octroi actually paid and for other collections demandedduty - It appears that liability of duty against assessee has rightly been confirmed onaccount of extra charges collected from customers by assessee - However, followingthe Apex Court decision in case of Maruti Udyog Ltd - 2002-TIOL-34-SC-CX-LB ,assessee would be entitled to benefit of cum duty price for computation of liability ofduty as there cannot be any further collection from customer on account of sale forwhich payments have already been realised by assessee - Matter remanded to OriginalAdjudicating Authority for requantification of liability of duty against assessee: CESTAT


Indira Printers Vs CCE (Dated: February 7, 2017)

Central Excise - CENVAT Credit - appellant is a 100% EOU engaged in the manufactureof export of printed books - They get the book binding done from another independentmanufacture on job worker basis, which did not attract any excise duty, and the jobworker neither paid CE duty nor service tax - subsequently, the job worker paid thetax and raised debit notes on the basis of which the appellant availed credit - theappellant filed the refund claim of the said credit in terms of Rule 5 of the CenvatCredit Rules in as much as the entire goods were exported by them - Revenue viewedthat (a) the debit notes raised by the job workers cannot be equated with the invoiceand as such credit could not be availed by the appellant on the basis of such debitnotes; and (b) the job worker was not required to pay any service tax in as much as

the same was exempted and as such credit of the same cannot be availed by theassessee - the refund claim was rejected in adjudication, now agitated herein.

Held: It is not the revenue's case that no service tax was actually paid by the jobworker; the only objection is that the availment is on the basis of debit notes insteadof invoice - the identical question was the subject matter of the Tribunal's decision inthe case of Shree Cement Ltd. Vs. CCE Jaipur wherein it was held that substance ismore important that the format and the denial of credit on the basis of the debit notes,instead of invoices, cannot be appreciated - Revenue has also not disputed that suchservice tax was actually "paid" by the job worker in which case the same would beavailable as a credit to the appellant in as much as it is the credit of tax "paid" which isavailable and not credit of tax which is "payable" - the availment of the credit ofservice tax paid by the job worker, is sustainable, hence entitled to the refund of thesame in terms of the provision of Rule 5 of CCR 2004 - the impugned orders are setaside with consequential relief. [Para 5, 6]


Ultratech Cement Ltd Vs CCE (Dated: December 28, 2016)

CX - Assessee engaged in manufacture of cement and clinker and avails cenvat creditin respect of duties paid on inputs and capital goods, used in or in relation tomanufacture of said final products - Taking of cenvat credit on these goods wasobjected to by Department on the ground that storage tank made out of cement andsteel, is immovable in nature, and thus, cenvat credit on those goods, is not availableto assessee - Karnataka High Court in case of SLR Steels Ltd. - 2011-TIOL-892-HC-KAR-CX have held that storage tank is specified as capital goods in definition providedin Rule 2 (a) (A) (vii) of CCR, 2004, and thus, steel and cement, used in manufactureof eligible capital goods i.e. storage tank, should merit consideration as input forpurpose of availment of cenvat credit, on duties paid thereon - Since the period underdispute, is prior to date of amendment, the embargo created under explanation-2appended to definition of input, will not have any application, for denial of cenvatcredit - Gujarat High Court in case of Mundra Ports & Special Economic Zone Ltd.2015-TIOL-1288-HC-AHM-ST on interpreting the decision of Larger Bench of Tribunalin case of Vandana Global Ltd. - 2010-TIOL-624-CESTAT-DEL-LB have held that whena new provision is added by Legislature in statute, then the same will be considered asnew amendment and cannot be treated to be clarification of particular thing, and assuch, amendment could operate only prospectively - Impugned order set aside:CESTAT


MRP Tapes Vs CCE & ST (Dated: February 15, 2017)

Central Excise - Allegation of clandestine removal, claim of SSI benefit as well as cum-tax benefit - investigation found certain unaccounted transactions made through 86parallel invoices, but contention that the allegation is baseless - Revenue's plea is thatthe parallel invoices and ledger entries demonstrating unaccounted clearance hascaused prejudice to Revenue for which the appellant does not deserve anyconsideration.

Held: The prayer of the appellant is that SSI exemption is permissible and also saysthat if recorded clearances as well as the alleged clandestine clearances areaggregated, such aggregate figures does not exceed the ceiling prescribed to grant SSIbenefit to the appellant - no material from record to show that the discovered invoicesrevealed any mention of duty element therein - Hence, appellant is not entitled tocum-duty benefit - to determine the SSI benefit if any permissible, the matter isremanded to Adjudicating authority for consideration - Appeal partly allowed andremanded - (Para 4, & 5).


Sripriya Engineering Works Vs CCE & ST (Dated: April 20, 2017)

CX - Assessee is a partnership firm carrying on business in manufacture of iron andsteel castings and power looms, and its parts with due CX registration - In de novoproceedings, Commissioner passed the order raising demand under Rule 9(2) of Rulesr/w provision to Section 11A of Act against assessee as excise duty on power loomparts cleared clandestinely in guise of castings by assessee and imposing penalty ofRs.50,000/- under Rule 173Q - Being aggrieved by de novo proceedings, assessee filedappeal before Tribunal on the ground that while determining demand of duty availed toconsider benefit available to assessee an SSI unit under Notfn 175/86 - Tribunal videFinal Order dt. 14/01/2004 remanded the matter to adjudicating authority to examineeligibility of SSI exemption in terms of said Notfn and passed an appropriate order andafter remand, adjudicating authority in de novo order dt. 31/10/2005 allowed theassessee the benefit of said Notfn - Tribunal vide order dt. 03/03/2008 held thatassessee was entitled to SSI exemption and remanded the case back to Commissionerto consider the matter de novo with respect to claim for exemption and in de novoproceedings, adjudicating authority confirmed the demand but imposed a penalty ofRs.6 lakhs under Rule173Q(1) - After perusal of various case laws relied upon byassessee in support of his submissions, consistently the Tribunal vide various decisionshave held that penalty cannot be enhanced in de novo proceedings - Assessee cannotbe placed in a precarious position than they were in before filing the appeals: CESTAT


Jindal Vijayanagar Steels Ltd Vs CC (Dated: June 1, 2017)

Central Excise - Appellant is an integrated steel plant who manufactures steel productsincluding Hot rolled Products - Appellant filed Bills of Entry for import of ShreddedSteel Scraps for use in the manufacture of steel in the blast furnace and electric arcfurnace - filed necessary bond /undertaking to use imported scrap in the electric arcfurnace – appellant filed application for issue of end use certificate as required underNotification No. 20/1999-Cus - The application was duly supported by a technicalwrite-up – application was rejected on the ground that the scrap is not added whileprocessing the liquid metal/steel at the electric arc ladle furnace but is used as acoolant – On appeal, the same was upheld – appellant was also issued demand noticesby Customs Appraiser demanding customs duty for failure to produce end usecertificate.

Held: The imported melting scrap has either been used directly in the electric arcfurnace or has been used in such furnace indirectly after passing through theprocessing in the basic oxygen furnace - the portion of the scrap initially charged in thebasic oxygen furnace will also be eligible for import at concessional rate of dutyinasmuch as it has indirectly found its way into electric arc furnace - the appellant willbe eligible for the concessional rate of duty under Customs Notification No. 20/99dated 28.2.99 – All appeals are allowed – (Para 17).


Radiant Indus Chem Pvt Ltd Vs CCE (Dated: June 16, 2017)

CX - Input Service - Rule 2(l) of CCR, 2004 - Since mutual fund investment is from theprofit arising after completion of manufacturing, same is not relating to manufacturingand business activity - Credit is not admissible on services related to investment inmutual fund - Appeal dismissed: CESTAT [para 4]



GMM Pfaudler Ltd Vs CCE & C (Dated: May 25, 2017)

CX - Assessee engaged in manufacture of excisable goods and availed CENVAT crediton inputs, capital goods and input services - Since assessee had availed proportionatecredit of premium paid under invoice/bill raised prior to 10.9.2004, alleging that suchproportionate credit is not admissible, SCN was issued for appropriation of credit

already reversed and recovery of interest with proposal for penalty - Tribunal in EsterIndustries Ltd. categorically held that credit contrary to provision of Rule 9(1)(f) ofCCR, 2004 cannot be held to be admissible - Therefore, impugned order on merit isupheld - Benefit of discharging 25% of penalty on fulfillment of necessary condition aslaid down under said provision is extended to assessee: CESTAT


Cadbury India Ltd Vs CCE (Dated: February 23, 2017)

CX - Assessee engaged in manufacturing of cocoa, cocoa products & wafer productsand discharging duty liability by classifying 'Milk Treat' under under CTH 19053219however revenue alleged that its classifiable under heading 19053211 - Its worth tomention here that as per the HSN notes the ingredients used in manufacturing of 'MilkTreat' not contained any cocoa or chocolate but only contained cocoa butter and cocoabutter was specifically excluded and not covered under Chapter 18 of CETA -Therefore, the white chocolate cannot be called as chocolate - In that circumstances,the product 'Milk Treat' not covered under Tariff Heading 19053211 and therefore,assessee had rightly paid the duty: CESTAT (2,3,12,13,14,15,16)


Hindustan Unilever Ltd Vs CCE & ST (Dated: August 31, 2016)

CX - Assessee, a manufacture of soap detergent is in appeal against impugned orderwith respect of three SCNs denying Cenvat credit received by assessee units by way ofISD Invoice issued by their Head Office, which is registered as ISD - Tribunal issatisfied that assessee have made substantial compliance with the provisions of takingCenvat credit read with the provisions for Input service distribution - Whatever, minorinfarction of Rules has occurred, it appears to be due to the bulk nature of data andthere appears to be no deliberate disobedience of law - Assessee are entitled to Cenvatcredit received from their Head Office/input service distributor - There is nocontumacious conduct or deliberate defiance of law and accordingly extended period oflimitation is not attracted: CESTAT


Pfeda Synthetics Pvt Ltd Vs CC & CE (Dated: April 10, 2017)

CX - Assessee were engaged in manufacturing polyurethane moulded furniture, partsof motor vehicles and parts and accessories thereof - Revenue alleged that clearing ofgoods to a sister unit engaged in marketing, was transfer of goods to a related person,that too who subsequently sold the goods at a higher price - Hence revenue used thehigher price for assessement & duty demand was imposed for recovery of differentialduty - On appeal Tribunal remanded matter & the impugned order was then passed -Held - Impugned order passed in ignorance of Tribunal's earlier directions - Price atwhich assessee sold goods to sister unit not verified - Hence impugned orderunsustainable: CESTAT (Para 2,4,7)


Dhampur Sugar Mills Ltd Vs CCE (Dated: February 14, 2017)

CX - Appellant company has got separate units namely sugar division, chemicaldivision, paper and paper board division in same premises - They availed Cenvat crediton Molasses received from sugar division by chemical division - AdditionalCommissioner disallowed the credit so availed on the ground that Non-statutoryChallans/Bills were not the valid documents for availing benefit of Modvat credit - Healso disallowed the Modvat credit on Molasses which were lost in transit, prior toreceipt in chemical division - Quantum of Molasses lost, being admittedly less than 1%,is a normal loss and no Cenvat credit relating to the same can be disallowed, as inputslost in normal course of business and transport-transit are held to be utilized for

manufacture of taxable output/goods - So far Cenvat credit on basis of Non-statutoryChallans/ Bills is concerned, as there is no dispute regarding duty payment onmolasses which were stored in kacha pit and its receipt in chemical division, therefore,credit cannot be denied only on the ground that invoice was in name of self: CESTAT


Standard Electricals Ltd Vs CCE (Dated: December 6, 2016)

CX - Assessee was selling their goods from their depot but not paying duty ontransportation cost from factory to depot - A SCN was issued for demanding differentialduty from assessee alongwith interest and to impose penalty - On merits, assesseehave no case - Assessee pleads that as investigation was completed on 13.11.2006and SCN was issued on 13.2.2009 - Therefore, demand is barred by limitation - It isnot coming out whether investigation was concluded on 13.11.2006 or not - Therefore,extended period of limitation is invokable - As there are contrary decisions of Tribunalin case of Marcandy Prasad Radhakrishna Prasad Pvt.Ltd. - 2002-TIOL-381-CESTAT-KOL and Madhoprasad Mahabirprasad (Supplies) Pvt.Ltd., therefore, it would be ininterest of justice to refer matter before Larger Bench of Tribunal to answer thereference - whether penalty can be imposed on new present management for activityof earlier old management or not: CESTAT


RS Infraprojects Pvt Ltd Vs CCE (Dated: March 1, 2017)

Central Excise - Exemption - the appellant was engaged in the manufacture of SteelStructures used both in Telecommunication and Mega Power Projects - The Ministry ofPower, Government of India gave approval to NTPC for 26 packages on ICB(International Competitive Bidding) basis including for SIPAT Stage II (2 x 500MW)Super Thermal Power Project at Chhattisgarh and also issued a certificatesimultaneously and as required under the relevant Customs/Excise exemptionNotification in terms of which the goods can be cleared to the said project withoutpayment of Excise duty - On the basis of the certificate, NTPC 'the projectimplementation authority' issued Project Authority Certificate in favour of "Areva T & DSystems India Limited, New Delhi", who had participated in the InternationalCompetitive Bidding process, being the named contractor for one among the packageassociated with the said project, mentioning therein that the said supply awarded toAreva T & D Systems Limited India, New Delhi covers names of sub contractorsalready finalized along with items to be supplied with quantities, with provision forsubsequent addition of sub contractors - the appellant is named sub contractor in thePAC issued by NTPC and on a bona-fide belief, before commencing clearance of goodsto be supplied to the said project, informed the Jurisdictional Assistant Commissionerthat they would be clearing the goods under Nil rate of duty to the said project interms of Notification No. 108/95 dated 28/07/1995 - the Jurisdictional Superintendentexpressed certain reservations about the applicability of exemption Notification No.108/95 upon which the appellant issued a communication stating that the clearances inquestion would be covered under Notification No. 6/2006-CE dated 01/03/2006 - ASCN was issued alleging that Notification No. 108/95 is not applicable to the facts ofthe case and that change of Notification for claim cannot be accepted retrospectively -Duty demand with interest and penalty under Rule 25 of CER, 2002 adjudicated; andagitated herein.

Held: No objection raised by Revenue regarding admissibility of / eligibility to thebenefit of exemption Notification No. 6/2006-CE - The only objection of the Revenue isregard to the retrospective effect of the claim - the show cause notice is misconceivedinasmuch as no case of any retrospective claim is made out - the appellant had onlyrectified his claim which was earlier made under Notification No. 108/95 to the correctNotification being Notification No. 6/2006-CE - the appellant have rightly relied on theApex Court ruling in Share Medical Care vs. Union of India wherein it was held thateven if an applicant does not claimed benefit under a particular Notification at initialstage, he is not debarred, provided or stopped from claiming such benefit at a laterstage - the show cause notice is unsustainable; impugned order set aside with

consequential relief. [Para 6]


Orbis India Pvt Ltd Vs CCE (Dated: April 10, 2017)

CX - Assessee, an 100% EOU engaged in providing Maintenance, Management andRepair Service to an unit in SEZ - Refund claim was filed by assessee in respect ofaccumulated cenvat credit under Rule 5 of CCR, 2004 - Export of such services to SEZwill necessarily have to be treated as deemed export and will be eligible for refund ofaccumulated credit under Rule 5 and notifications issued thereunder subject to variousconditionalities of that Rule and related notifications being satisfied - While upholdingassessee's contention that services provided by them are eligible for refund ofaccumulated credit under Rule 5 ibid, matter is remanded to original authority only tolimited purpose of verifying whether payment received towards such services havebeen received in convertible foreign exchange or otherwise and if so, refund shall beallowed unless any other procedural conditionalities of said Rule and notificationsthereof are have not been fulfilled: CESTAT


EI Dupont India Pvt Ltd Vs CCE (Dated: December 20, 2016)

CX - Assessee was manufacturer of 'nylon yarn' and cleared the same from its factoryto its consignment agent at a different place - Dispute arose on valuation of clearancemade from premise of consignment agent of assessee when Revenue choose to adoptvalue of clearances of a day adopting subsequent day's aggregate sale value - Onlydispute emanated from SCN is manner of determination of assessable value of goodscleared from consignment agent's premises - It is reiterated that value of clearances ofmaterial period shall be determined as per law prescribed by Rule 2 (b) of CER, 2000r/w Rule 7 thereof - Where on respective date sale price is not available for purpose ofascertainment, value of goods in time nearest i.e., immediate past, to the time ofremoval of goods shall be considered for purpose of Rule 7 - Authority shall not gobeyond the scope of Board's Circular dated 30.06.2000 - At every stage of hisascertainment of assessable value from statement of clearance submitted by assessee,assessee shall be confronted with proposition of Adjudicating authority for appropriaterebuttal since the matter is very old to avoid difficulties of both sides - Authority shallresolve the dispute at grass root with guidelines of law discussed and pass a reasonedand speaking order - When an allegation is made, burden of proof is on Revenue toprove its stand - In absence of proper allegation, a SCN is said to have deprived theassessee from right of defence - Therefore, authority should look into such aspect veryJudiciously: CESTAT


Idea Cellular Ltd Vs CCE (Dated: May 9, 2017)

CX - Assessee is providing tele-communication services and availed Cenvat Credit ofduty paid on various capital goods and also Cenvat Credit of ST paid on various inputservice used for providing output service - They setup BTS mobile towers at variouslocations in circle which emit and receive wireless signals to and from between aperson availing telephone service - The appellants availed Cenvat Credit of duty paidon various capital goods and also the Cenvat Credit of service tax paid on various inputservice used for providing output service - SCN was issued by invoking provisions ofRule 6(3)(c), of CCR, 2004 for restricting utilization of Cenvat credit for payment of STup to 20% of Cenvat credit - Matter was adjudicated and demand for period of April,

2007 to May, 2007 was confirmed along with interest and equivalent penalty was alsoimposed - In assessee's own case for previous period, Tribunal has examined the issuein case of Idea Cellular Ltd. - 2009-TIOL-387-CESTAT-DEL and remanded the matterback to Adjudicating Authority for recalculation - Considering said decision, matter isremanded for verification purpose, thereafter to pass an appropriate order inaccordance with law - In case, there is no demand against assessee in remandproceedings, there will be no penalty against assessee: CESTAT


Rollex Electro Products Pvt Ltd Vs CCE (Dated: May 22, 2017)

CX - Demand for Duty has been raised mainly on two grounds firstly on allegation thatraw material on which Cenvat credit has been availed, was found short at the time ofsearch of assessee factory and stock taking - Further, duty has been demanded on theground that assessee has surreptitiously manufactured and cleared electrical cordsvalued at about Rs 19 crores - Charge of clandestine clearance of electrical has beenbuilt up on shortage of raw materials noticed at the time of stock taking in June, 2003- Assessee has claimed that they have undertaken trading activity in braided thread -Trading activity is claimed to have been done right from 1994-95 - Departmentestimated that approximately 20 gms of braided thread is required in manufacture ofone electrical cord - Taking approximate quantity of 20 gm required per electrical cord,Revenue has estimated that electrical cords would have been manufactured out of suchbraided thread found short and such electrical cords cleared clandestinely - Taking theaverage price, total value of electrical cords alleged to have been cleared clandestinelywas estimated involving Central Excise Duty of Rs.3,06,95,210/- during the year 2001-2002 - Assessee also sought cross examination of few witnesses citing the same asnecessary for their defence - It is also significant to note that every witness whosestatement has been recorded under section 14 of CEA has retracted the same just oneor two days after such statement was recorded by Panch witnesses - Adjudicatingauthority has brushed aside such arguments by taking a view that not allowing of crossexamination has not violated principles of natural justice - Since the issue is longpending, adjudicating authority is directed to complete the denovo proceedings in timebound manner: CESTAT


CCE & ST Vs Shivam Casting (Dated: May 16, 2017)

CX - Upon inspection of assessee's factory, & recovery of documents/evidences &recording of statements, revenue alleged clandestine production and removal of goods- Duty demand with equal penalty and personal penalty were imposed - Assessee latersubmitted a Chartered Engineer's Certificate claiming no production of the allegedgoods, which was accepted by the adjudicating authority, and who exonerated theassessee - Revenue challenged the production of such certificate after issue of SCNand completion of investigation - Held - Considering that the adjudicating authority'sorder was entirely influenced by the Chartered Engineer's Certificate, in all fairness,revenue deserved the opportunity to examine such certificate, before a final order waspassed - Matter remanded for verification of certificate and other evidences byindependent experts, within three months: CESTAT (Para 2,6)


Century Pulp And Paper Vs CCE (Dated: May 19, 2017)

CX - Assessee engaged in manufacture of writing and printing paper - Whether cenvatcredit availed by assessee in respect of ST paid on goods transport services on basis ofTR-6 challans is valid - Assessee availed credit during period 01.02.2005 to 15.6.2005- Rule 9 of CCR, 2004 were amended wide notfn 28/05-CE(NT) specifying TR-6challans as valid documents for availing credit - Department views that for period priorto 16.06.2005, credits availed on basis of TR-6 challans become inadmissible - HighCourt of Bombay in case of Essel Propack Ltd. wherein High Court has decided theissue in favour of assessee and held that credit in respect of ST paid on GTA availed onbasis of TR-6 challans is valid for prior period - Impugned order cannot be sustained,

same is set aside: CESTAT


Pilania Steel Pvt Ltd Vs CCE (Dated: May 9, 2017)

CX - Assessee firm was engaged in manufacture of H.B. Wire and Mild Steel (windingwire) - Upon factory visit & verification of registers, shortage of some quantity of rawematerials and finished goods were alleged - Statements of the director of assessee firm& another person were recorded - SCN was issued imposign duty demand, confiscatingcash seized, confiscating 'wire mesh' found in excess and imposing penalty u/s 11AC ofthe CEA - Further duty demand was raised for the reversal of credit availed on inputsfound short and credit availed on inputs used in making goods later removedclandestinely - Such duty demand was also based upon irregularities in entry of theinputs & goods in the RG-1 & RG-23A registers - Held - Upon investigation & enquiry,SCN was issued imposing duty based on alleged shortage of materials and non-payment of duty and cash recovered & thereafter, subsequent SCN was issued - Thesefacts were already known to the department when the subsequent SCN was issued,which revealed no new facts - Hence, following the ratio laid down in Nizam SugarFactory, the subsequent SCN could not be issued invoking extended limitation -Moreover, the shortages found were not conclusively corroborated to clandestineremoval, and could also be on account of wastage - Duty demand for shortage offinished goods set aside - Assessee manufactured wire of several gauges & registeredthe each in production slip - Where wire of a particular gauge was converted intoanother gauge, the same would again figure in the production slip - However in theRG-1 register the wire of only a particular gauge was recorded - Hence duty demand,also being uncorroborated by further evidence, could not be based on differencesbetween production slips and RG-1 register - Moreover, duty demand based on privateregisters ,which was not raised in the rarlier SCNs could not be raised by invokingextended limitation - Further as the revenue did not give evidence to show diversion ofinputs, duty demand was unsustainable, merely on presumption of their diversionsparked by their non-mention in private records - Lastly, duty demand for creditreversal set aside as no evidence placed to show that such credit was availed in thefirst place - Therefore, all duty demands and consequently, all penalties, set aside:CESTAT (Para 2,3,17,19,20-25,27,28)


Welcure Drugs And Pharmaceuticals Ltd Vs CCE (Dated: April 20, 2017)

Central Excise - Refund - Appellant was manufacturing medicine, namely, Odoxin,which was governed by direct price control order - A duty of 4% was paid on Odoxinwhereas input credit utilized in manufacture of Odoxin suffered a duty of 10 per centon local inputs and 14% on imported inputs - appellant was unable to utilize theCENVAT credit - The appellant closed their factory and applied for cash refund of theCENVAT lying in their CENVAT credit account, which was denied in adjudication; thedenial was upheld by Commissioner (Appeals) and is agitated herein.

Held: CENVAT Credit Rules does not permit cash refund of CENVAT credit amountexcept for in case of the exports - Appellant relied upon the Karnataka High Courtruling in the Slovak India case, but it was distinguished by the Larger bench of theTribunal in the Steel Strips case, holding that (i) the Policy of refund of input credit isregulated by statutory provisions; (ii) Refunds and exemption are governed by rule ofstrict compliance; and (iii) Substance and essence of statute are paramoundconsiderations; and answered the question of law in favor of Revcenue - Tribunal inthe case of Scan Synthetics Ltd Vs CCE, Jaipur-I, also held there is no provision inCentral Excise Act or in that CENVAT credit rules to give cash refund of accumulatedcredit - In the light of the decisions and observations; the subject refund claim of theCENVAT amount lying in the appellant's account is not admissible; consequently, theimpugned order is sustained. [Para 5-7]


JSW Steel Ltd Vs CCE (Dated: February 13, 2017)

CX - Assessee engaged in manufacturing of HR Coils & Sheets - Revenue disallowedthe Cenvat credit availed by the assessee on MS beams, channels, joists and on HRCoils & Sheets on various grounds - Further denied the credit on the ground of availingit after the delay of one & half years - Invoices presented in order to avail the creditwere not in the name of assessee - Another reason for denial was all these items usedfor the construction of blast furnace & coke oven plant and its structure would becomeimmovable property which cannot be purchased or sold hence not eligible for credit -Blast furnace & coke oven batteries cannot be considered as building or tree - Thesefacilities get supported and embedded to the ground for the purposes of safety andsmooth operational efficiency therefore, considering the case of Sirpur Paper Mills Ltdthe blast furnace & coke oven batteries were capital goods - As per Rule 2(a) of CCR,2004, definition of capital goods also includes components, spares and accessories ofgoods - Structural steel items were components and had been used in fabrication andassembly at site of manufacturing facilities hence credit rightly availed - Twocompanies merged with assessee's unit and assessee supplied HR sheets & plates tothem on payment of duty due to this reason name on the invoices were different -Considering the case of Balakrishna Industries delay in taking Cenvat credit cannot bea justifiable ground for denial - Therefore, assessee rightly availed the credit: CESTAT(Para 3,9,10,11)


Vogue Textiles Ltd Vs CCE (Dated: January 30, 2017)

CX - Assessee was manufacturing woven fabrics, fire retardant fabrics and chenillefabrics - All types of fabric was transferred to their other two units without payment ofduty, under cover of challans - Issue to be determined is whether the impugned goodsmanufactured by assessee are chenille fabric under Tariff Heading 5801 orunprocessed cotton fabric under Tariff Heading 5208 - Assessee have declareddescription of goods in all their documentation as chenille fabrics or made-ups ofchenille fabrics - In their letter, they have also mentioned that they have manufacturedchenille fabrics and were exporting made-ups of chenille fabrics - Chenille fabrics isspecifically mentioned in Chapter 58 under Tariff Heading 5801 - Impugned orderupheld: CESTAT


Zenith Fibres Ltd Vs CCE & C (Dated: May 22, 2017)

CX - Interest on delayed refund - Main issue for consideration is eligibility of interestu/s 11BB of CEA, 1944 on cash refund filed under Rule 5 of CCR, 2004, which is nomore res integra being settled by judgment of Gujarat High Court in RelianceIndustries Limited's case - 2010-TIOL-928-HC-AHM-CX - Therefore, assessee is eligibleto interest on refund amount from the date of expiry of three months of filing therespective claim: CESTAT


Zenith Silk Mills Pvt Ltd Vs CCE & C (Dated: May 15, 2017)

Central Excise - Refund - The appellant is engaged in the manufacture of TexturisedPolyester Filament Yarn and Texturised Polyester Yarn - During the material period,duty rates of inputs Partially Oriented Yarn (POY) was higher than the duty rates offinal goods, Twisted/texturised polyster filament yarn - The appellant carried outmanufacturing activity availing Cenvat Credit and discharged duty on final goods out ofCenvat Credit account; however, there was accumulation of Cenvat Credit on accountof inverted duty structure - With effect from 1.3.2006, the appellant stopped claimingCenvat Credit on Inputs and opted to work under Excise Exemption Notification No30/2004-CE dt 9.7.2004 as amended, operative subject to conditions of non-availmentof Cenvat Credit - The appellant filed refund claim for accumulated Cenvat Credit whichthey were unable to utilize as they opted for exemption and did not pay duty on final

goods - Claim rejected in adjudication; rejection upheld by Commissioner (Appeals),now agitated herein.

Held: Rule 5 of Cenvat Credit Rules, 2004 does not authorize granting refund of CenvatCredit in all the cases; it authorizes grant of refund only in case where final productshave been exported. - There is no provision in law of Central Excise for grant of refundof such accumulated credit to the appellant - The Larger Bench of the Tribunal on thissubject, in the case of M/s Steel Strips and the Mumbai bench, in M/s Phonix IndustriesPvt Ltd, held that refund under Rule 5 of CCR 2004 is admissible only if the finishedgoods are exported and for no other reason - impugned order upheld. [Para 5, 5.1, 5.2& 5.3]


UG Sugar and Indus Ltd Vs CCE (Dated: May 5, 2017)

CX - Whether assessee, a manufacturer of sugar and molasses is entitled to CenvatCredit on front end loader, vacuum pump and spares of crane under Rule 57 Q (1) r/wexplanation of CER, 1944 - From the definition in Rule 57 Q r/w explanation, it isevident that all items falling under Chapter 84 are eligible save and except internalcombustion engines of a kind used in motor vehicles, compressors of a kind used inrefrigerator and air conditioning appliances and machinery, expansion valves andsolenoid valves of a kind used for refrigerating, air conditioning appliances andmachinery - Items in dispute do not fall under any of exceptions and as such assesseeis entitled to Cenvat Credit on the same - Impugned order set aside and appealallowed: CESTAT


CCE & ST Vs DRP Malleables Pvt Ltd (Dated: January 13, 2017)

CX - Assessee engaged in manufacture of Pipe Fittings and clearing finished goods onpayment of duty for home consumption as well as without payment of duty under ARE-1 to a contractor on account of SEZ Developers - SCN has been issued for recovery of10% of value of said exempted goods because assessee failed to maintain separateaccounts of common inputs/input services in terms of Rules 6(3) (i) of CCR, 2004 - Allthe three demands are based on this premise - In terms of sub-rule (6) of Rule 6 ofCCR, provision of sub-rule (1), (2), (3) & (4) of Rules 6 are not applicable in respect ofgoods cleared to SEZ Developers - In this case, goods were cleared to contractor ofDevelopers of SEZ - Appeal filed by Revenue has no merit and is liable to bedismissed: CESTAT


Barco Electronics Systems Pvt Ltd Vs CC, CE & ST (Dated: June 7, 2017)

CX - Assessee clears the goods in DTA on payment of concessional rate of duty interms of Notfn 23/2003 - CE - Approximately, 15% clearances are to Service Divisionof assessee and around 85% sales are directly to customers at factory gate onpayment of CX duty as well as Sales Tax/VAT - An internal audit of unit of assesseewas conducted and audit party views that SAD portion of duty is payable on goodscleared to service Division, since the clearance of goods is sufficient for payment ofSAD - SAD which is in lieu of Sales Tax is not attracted in facts and circumstances ofassessee, there being no sale - As transfer is to self or to their Service Departmentfrom 100% EOU - A similar view was taken by another coordinate Bench of Tribunal inM/s VVF LTD. 2014-TIOL-2047-CESTAT-MUM - Accordingly, appeals are allowed withconsequential benefits and impugned order is set aside: CESTAT


KK Nag Ltd Vs CCE (Dated: May 12, 2017)

CX - Assessee engaged in manufacture of polystyrene products and are also availingbenefit of CENVAT credit in terms of Rule 3 of CCR, 2004 - It is alleged that assesseehad availed ineligible cenvat credit of service tax charged on the air ticket amountingto Rs.87/- and that they had availed cenvat credit based on a statement from theirPune office to the tune of Rs.2,26,729/- Assessee is entitled to CENVAT credit on Rs.87/- on air ticket which fall in definition of input service - As far as Cenvat credit ofRs.2,26,729/- is concerned, matter remanded back to original authority with adirection to assessee to produce original documents before said authority andAdjudicating authority after considering the documents produced by them will pass afresh order in accordance with law: CESTAT


Gufic Bioscience Ltd Vs CCE & ST (Dated: March 14, 2017)

CX - Assessee had manufactured and cleared excisable goods viz. Lidoncaine USP/HCL- Alleging that Lidoncaine USP/HCL is Anaesthetics and exempted from duty underNotfn 3/2001-CE and 06/2002-CE, CENVAT Credit availed on inputs used inmanufacture of such excisable goods being not admissible, said credit was proposed tobe recovered with interest & penalty by issuance of SCN - As far as use of inputs inmanufacture of goods cleared for export under bond are concerned, issue is squarelycovered by judgment of Bombay High Court in case of Repro India Ltd. 2007-TIOL-795-HC-MUM-CX - Regarding the issue of clearances of goods for home consumption isconcerned, assessee discharged duty and cleared their product for home consumptionafter availing CENVAT Credit on inputs that were used in manufacture of such productwhich would have been otherwise cleared by them as exempted, if test result wouldhave shown product as Anaesthetics - Issue is covered by judgment of Tribunal in caseof Ajinkya Enterprises - 2012-TIOL-578-HC-MUM-CX wherein it is observed that onceduty on final product has been accepted by Department, CENVAT Credit availed neednot be reversed even if activity does not amount to manufacture subsequently:CESTAT


Hiral Chemicals Pvt Ltd Vs CCE & ST (Dated: May 31, 2017)

CX - Assessee had filed cash refund claiming under Rule 5 of CCR, 2004 - Both theauthorities below, after recording the fact that credit has been accumulated on accountof export of goods made against various ARE-1 during period April 2005 to December2005 and exports made till January 2006, has been barred by limitation prescribedunder Section 11B of CEA, 1944 - Relevant date must be the date on which the finalproducts are cleared for export - Impugned order is upheld and appeal being devoid ofmerit, is dismissed: CESTAT


CCE, C & ST Vs India Sugars And Refineries Ltd (Dated: May 1, 2017)

Central Excise - Demand - respondent is engaged in the manufacture of sugar andmolasses - a large quantity of molasses was drained out in the respondent's factorydue to bursting of the molasses storage tanks - A show-cause notice was issuedproposing duty demand on the quantity of molasses lost with interest and penalty -The original authority confirmed the demand while Commissioner (Appeals) set asidethe duty demand as well as penalty; now agitated by Revenue herein.

Held: Serious structural deficiencies had been noticed in the molasses tanks earlier,but the respondent had failed to take corrective measures to rectify and strengthenthese tanks - the accident which happened in the factory was as a result of negligenceon the part of the respondent and lack of maintenance of storage tanks - In the caselaw relied upon by the Revenue, the Supreme Court has upheld the order of AllahabadHigh Court in which duty demand was upheld in respect of goods lost due to fire in thegodown due to careless act of smoking beedies near the godown - in the present case,

inadequate maintenance of the storage tanks by the respondent stands confirmed;hence the duty demand on the quantity of molasses lost due to mishap is payable bythe respondent - However, there is no justification to impose any penalty - Therespondent has also raised the question of jurisdiction in terms of Section 35B [proviso(a)], which bars the jurisdiction of the appellate Tribunal, in a case of loss of goods,where the loss occurs in transit or during the course of processing in a warehouse or instorage - in the present case, the loss of goods is not on account of any of thesefactors - In terms of the Tribunal ruling in Saturn Non-woven Ltd. vs. CCE, Surat; theTribunal will have jurisdiction to hear cases in which goods have been either lost ordestroyed by natural cause or unavoidable accident, same applicable to instant case -the respondent has not applied for any remission of duty to the Proper Officer in spiteof the provisions - In the absence of any such claim for remission, the duty demand isrequired to be upheld - the duty demand is upheld, however, there is no justification toimpose penalty [Para 5, 5.1, 5.2, 6]


Cipla Ltd Vs CCE, C & ST (Dated: December 13, 2016)

CX - Assessee are manufactures of organic chemicals and pharmaceutical products andthey are availing CENVAT credit under CCR, 2004 - Assistant Commissioner allowedthe credit availed towards EC & SHE cess on CVD as its duties of excise as per Rule3(7)(a) - Proviso B(I) of CCR, 2004 - On appeal, Commissioner(A), allowed thedepartment appeal - Impugned order is not sustainable as Commissioner (A) hastravelled beyond the scope of SCN because in SCN, proposal was to deny CENVATcredit on Sl. No. 3 and 4 of table, whereas Commissioner (A) has held that assesseeare not entitled to credit availed at Sl. No.1, 5 and 6 of said table which is not theissue raised in SCN - Impugned order set aside and Order-in-Original is upheld:CESTAT


D And H Secheron Electrodes Pvt Ltd Vs CCE (Dated: March 6, 2017)

CX - Assessee engaged in manufacturing of welding electrodes which are sold throughtheir dealers as well as directly to industrial/institutional consumers - 60% of sales areto dealers and remaining 40% is to industrial/institutional consumers - Issue isregarding whether notional interest accruable on advance is includible in assessablevalue - As per business policy of assessee they are seeking advance payment fromdealers for supplies to be made by them - Dealers who make advance payment areextended the benefit of 5% of value /price as cash discount - According to revenue,this cash discount offer will be covered by provisions of Rule 6 of CEVR, 2000 andmore specifically Explanation 2 - On a specific query from Bench as to whether same5% cash discount is offered to any other dealer who is not making any advancepayment, C.A. fairly states that they did not extend this cash discount to those dealerswho are not making advance payment - Assessable value on which duty liability needsto be discharged is after addition of cash discount - Both the Revenue's appeals needto be allowed as on merits: CESTAT


CCE, C & ST Vs Godavari Bio-Refineries (Dated: May 19, 2017)

CX - Assessee engaged in manufacture of sugar, molasses, rectified spirit anddenatured spirit - For manufacture of sugar and molasses, main raw material is sugarcane - They are extracting sugarcane juice which is further processed and used formanufacture of sugar and molasses - It appeared to department that they had startedpaying CX duty @ 5% / 6% in terms of Notfn 2/2011-CE with availment of CENVATcredit w.e.f. 1.4.2011 onwards which showed that they were availing of CENVAT crediton inputs and input services used in manufacture of compost prior to 1.3.2011 - Onthese allegations, a SCN was issued to assessee demanding an amount equal to 5% or10% of sale value of compost manure cleared by them without payment of duty -Assessee submitted that compost is not a manufactured product and is non-excisableproduct and therefore, provisions of Rule 6 of CCR are not applicable to compost -

Commissioner (A) has held that demand for 5% / 10% amount under Rule 6 on thecompost manure cleared during period from 2008-2011 is not sustainable on merit aswell as on point of limitation - Department has challenged only findings ofCommissioner (A) holding the demand as not sustainable on merits and Departmenthas not challenged findings recorded by Commissioner (A) for holding the demand asbarred by limitation - Issue is squarely covered in favour of assessee by variousdecisions cited supra and by following the ratios of said decision, it is found that thereis no infirmity in impugned order passed by Commissioner (A) and therefore noreasons to interfere in impugned order and same is upheld: CESTAT


ITI Ltd Vs CCE (Dated: December 23, 2016)

CX - Assessee engaged in manufacture and clearance of Telephone Instruments, partsof Telephone Exchanges and parts of Transmission Equipments - During audit, it wasnoticed that assessee had availed credit on input services such as repair work at theirguest house at Bangalore, AMC charges for hospital equipments and AMC charges fortheir New Delhi plant and sites situated at Assam - Revenue views that said serviceswere not covered under definition of 'input service' under Rule 2(1) (ii) of CCR, 2004 -Assessee's case is covered by decision in case of Veena Industries Limited 2016-TIOL-401-CESTAT-AHM wherein it has been held that assessee has rightly taken the cenvatcredit on input service provided by sub-contractors and they have paid applicable STon output service provided by them - In view of Division Bench decision of Tribunal,assessee's case is squarely covered by decisions cited by assessee - Therefore,impugned order set aside: CESTAT


Sobha Developers Ltd Vs CCE

CX - Assessee have made the supplies to M/s. Infosys Technologies Ltd. which was aSEZ unit during relevant time and said supplies were made on payments of duty andlater filed refund claim for same on the ground that any supplies made to SEZ unit isnot taxable - But assessee have failed to follow the procedure which is prescribed inSEZ Act for claiming exemption - Further, assessee have also not followed theprocedure as prescribed in Notfn 58/2003 which was in force at that point of time -Commissioner has rightly come to the conclusion that assessee have not followed theprescribed procedure - Assessee are not entitled to refund of duty paid as they havenot followed the procedure prescribed under law: CESTAT


Rajashri Foods Pvt Ltd Vs CCE

Central Excise - Job work - Dispute is that CENVAT credit has been disallowed for thereason that availment of credit on the basis of endorsed invoices is irregularparticularly in view of the change in the position of rules w.e.f . 01/04/1994 - Witheffect from this date, it was specified in the Central Excise Rules that the goods are tobe cleared from the manufacturer under cover of " invoices " which replaced the earlier" gate passes " - Since both the authorities below have held that such CENVAT creditsare irregular, the present appeal has been filed.


Anglo French Drugs And Industries Ltd Vs CCE, ST & CC

CX - Assessee are manufacturers of P & P Medicaments and are availing benefit ofCENVAT credit under provisions of CCR, 2004 - During audit, it was noticed thatassessee have procured inputs from M/s. Mahima Life Sciences Pvt. Ltd., 100% EOUand have availed CENVAT credit in excess of amount actually eligible - Impugned order

is not sustainable in law as same has been passed based on original assessable valueindicated in invoices and not taking into account the revised assessable value -Moreover, subsequently during December 2007, a certificate was received fromsupplier and it was duly certified by jurisdictional Superintendent in-charge of 100%EOU - Further assessee have only availed CENVAT credit but have not utilized thesame as there was sufficient balance lying in CENVAT credit and therefore, by followingthe decision in case of Bill Forge Pvt. Ltd 2011-TIOL-799-HC-KAR-CX , assessee arenot liable to pay interest and penalty also and this Tribunal in case of Reid and Taylor2016-TIOL-2020-CESTAT-BANG , has followed the binding judicial precedent ofKarnataka High Court and set aside the demand - Since there was some proceduralviolation committed by assessee, therefore a nominal penalty of Rs.5,000/- is imposedunder Rule 15 of CCR, 2004 on assessee: CESTAT


AL Gyas Exports Pvt Ltd Vs CCE, ST & CC

CX - Assessee are manufacturers of articles of plastics viz. PP fabric, PP bags, liners -They had filed the refund claim under Rule 5 of CCR, 2004 and had submitted thatamount was originally debited through their Target Plus Scheme - Said claim wasrejected on the ground that goods were actually imported by other entities and namesof said five entities are as importers; that assessee had sold imported materials inopen market without any endorsement on certificate pertaining to Target Plus Scheme;and that they had not affected any export clearances whereas refund of unutilisedcredit under Rule 5 was for inputs or input service used in manufacture of finalproducts which are exported under bond - Assessee's case is squarely covered bydecision of the Karnataka High Court in case of Slovak India Trading Co. Pvt. Ltd .2006-TIOL-469-HC-KAR-CX wherein it was held that there was no prohibition underRule 5 of CCR, 2004 to refund unutilised credit when factory is closed and by followingthe ratio of jurisdictional High Court, impugned order is not sustainable in law: CESTAT


Shirdi Industries Ltd Vs CCE & ST

CX - Assessee engaged in manufacturing of Decorative Plywood, Block Board, ParticleBoard, Flush Board, MDF Board, High-pressure Laminates, Plain Particle Board andFurniture Components - Assessee was also manufacturing Phenol Formaldehyde Resin,Urea Formaldehyde Resin, and Melamine Formaldehyde Resin for captive consumptionin order to make final products and availing hill area based exemption under Notfn50/2003-CE - Revenue views that these resins would not be eligible for captiveconsumption exemption under Notfn 67/95-CE - Revenue classified these goods underHeading 39.09 hence not eligible for duty exemption - Assessee's entitlement toexemption on captively consumed resin/glue depends on correct classification of saidproduct - SCN was issued by invoking extended period of limitation wherebydemanding duty & imposed penalty - Revenue had relied upon information obtainedfrom website of one Akolite Synthetic Resins, Mangalore, and some othermanufacturers without any evidence - Revenue further made an error by holding thatassessee's goods were marketable and also capable of being bought & sold without anychemical composition comparison along with competitive shelf life study - Revenuecompletely ignored the clarification given by GOI and said classificatory circular wasbinding on officers of revenue - Wax was used by assessee in manufacturing ofglue/resin, which was clear from chart reproduced in SCN and in impugned Order-in-Original - As per HSN explanatory notes glue manufactured by assessee for use asadhesive was outside the purview of Heading 39.09- Therefore, by considering thecase of Balaji Action Buildwell - 2016-TIOL-36-CESTAT-DEL impugned order set-aside:CESTAT (Para 2,3,10)


H And R Johnson India Ltd Vs CCE, ST & CC

CX - Penalty - Assessee are engaged in manufacture of Ceramic Glazed Tiles andavailed CENVAT credit on ST paid on Outdoor Catering Services - Department viewsthat assessee are not entitled to CENVAT credit on Outdoor Catering Services - Ininitial stage, CENVAT credit on outdoor catering service was allowed by Deputy

Commissioner and same was confirmed by Commissioner (A) - Later on, Tribunalremanded the matter for quantification of CENVAT credit disallowed which was borneby employees but Tribunal did not mention about imposition of penalty at all and onremand, Deputy Commissioner quantified the amount and assessee paid the demandalong with interest but did not pay penalty on the ground that there was no directionby Tribunal to impose penalty as assessee was under a bona fide belief that he isentitled to CENVAT credit on outdoor catering service on the basis of decision of LargerBench in case of GTC Industries Ltd. 2008-TIOL-1634-CESTAT-MUM-LB - Further,during relevant time, there were conflicting decisions and assessee had a bona fidebelief that he is entitled to CENVAT credit on outdoor catering service - When issuerelates to interpretation of law, imposition of penalty is not justified: CESTAT


CCE Vs Riat Grinders (Dated: April 11, 2017)

CX - Assessee engaged in manufacture of Centreless Grinding Machines, PlanningMachines, Round Bar Straightening Machines and Duplex Grinding Machines and areavailing SSI Exemption on said goods - Revenue's claim is that goods of assesseebearing the brand name 'RIAT' connect to M/s RMT, who are the owners of said brandto leverage its goodwill and simultaneously avail the benefit of SSI Exemption - Whiledeed of dissolution gave the right to use 'RIAT' trade mark to assessee, the otherpartners also committed that they would have no objection to registration of said trademark by retiring partners and shall give no objection certificate for the same -Subsequently, assessee had taken registration for RIAT brand under Trade andMerchandise Marks Act, 1958 for said machines - Thus they became owners of brandfrom 30.11.1999 / 15.10.2001 respectively - Commissioner has therefore rightlyconcluded that brand name was the trade mark registered in name of assessee prior tothe period of demand under SCN: CESTAT


CCE Vs Rimjhim Ispat Ltd (Dated: April 13, 2017)

CX - Assessee engaged in manufacturing of SS Steel Ingots, Billets, SS Flats and otherproducts of iron steel - It is alleged that assessee involved in large scale production ofgoods and clearing them clandestinely to evade excise duty - Revenue raised an issuemainly on basis of uncorroborated oral statements given by persons available inpremises of assessee however, when assessee produced statement of accounts tojustify the material found in premises - Further, mere unaccounted goods does not callfor confiscation unless there was any attempt or preparation to remove the sameclandestinely - Even the electricity consumption not revealed any adverse inference ofhuge quantity production - When conflict arise between the oral and documentaryevidence then documentary evidence will prevail over the oral evidence - Therefore, itwas proved beyond the doubt that the goods in assessee's premises were not found inexcess and the charge of clandestine removal was based on presumptions andassumptions: CESTAT


Raizo Plasto Pvt Ltd Vs CCE (Dated: April 24, 2017)

CX - Assessee's engaged in the manufacturing of PVC Pipes - Revenue allegedassessee indulged in clandestine removal of goods and the charge was based on thevarious things found in search of the assessee's premises such as parallel invoices ofthe goods cleared clandestinely, ledger book of assessee's director's father and furtherbased on weighment slips of the dharamkant were recovered showing weighment ofPVC pipes by the assessee without accounting the same in their statutory records andfurther found accounting records of assessee's were not pre authenticated as requiredby Excise Rules - Revenue detained the material found in the premises and recordedthe statement of assessee's director and director's father too - Demand for duty wasraised with interest and imposed penalty -Held- Allegation of clandestine removal of

goods based on the ledger book or loose sheets maintained by the third party for hispersonal use should be corroborated by some independent evidence which didn'thappen in this case and by considering the case of M/s Bearing ManufacturingCompany demand not sustainable - Further the demand on the basis of parallelinvoices was bad in law as no investigation was conducted at the end of the buyers ofPVC Pipes whose names were reflecting in the invoices - The weighment slip producedwould not be reliable reason being slips didn't have any content which display whetherits finished goods or raw materials and no corroborative evidence was produced totestify the authenticity of the weighment slips - Therefore, the charge of clandestineremoval of goods was not proved beyond the reasonable doubt and demand for dutyand penalty held bad in law: CESTAT


Rauzagaon Chini Mills Vs CCE (Dated: May 5,2017)

CX - Assessee engaged in manufacture of Sugar & Molasses and availed Cenvat crediton Plates, Channels, Shapes & Section, Sheets, Angles, Bar, Iron & Steels treatingthem as inputs - Whether said goods were eligible for availment of Cenvat credit -Ruling by High Court of Rajasthan in case of Hindustan Zinc Ltd. 2006-TIOL-440-HC-RAJ-CX is squarely applicable wherein it is held that MS/SS Plates used in workshopmeant for repair and maintenance of machinery which are used for manufacture offinal product are eligible to avail Modvat credit: CESTAT


Ns Papers Ltd Vs CCE & ST (Dated: March 20, 2017)

CX - Assessee is a manufacturer of Kraft Paper/Kraft Liner and M.S. Ingots - Itappeared to revenue that in view of provisions of Rule 8(3A), w.e.f. 06.12.2006 to18.12.2006, assessee was required to pay duty on consignment basis and withoututilizing Cenvat Credit - There is no case of deliberate default or any contumaciousconduct on part of assessee - They had sufficient balance in Cenvat account whichcould not be used due to clerical mistake - On the date of issuing SCN, nothing wasrecoverable, as assessee had admittedly deposited the duty with interest much beforeissuance of SCN - Thus, SCN is held to be untenable: CESTAT


Pathick Engineering Works Vs CCE (Dated: May 9, 2017)

CX - Assessees were involved in manufacture of Elastic Rail Clips, on contract, for therailways - Upon verification of raw materials & accounts, several tonnes of raw materialwere seized for allegedly not being approved raw materials for manufacturing elasticrail clips - The seized goods were confiscated & option of redemption fine was providedalong with penalty for non-maintenance of proper records - On appeal, the confiscationwas upheld while redemption fine & penalty were reduced - Later, duty demands withfurther penalties for recovery of credit were also imposed on the assessees - Held -The impugned order mentions that assessee's credit claims for SS Bars inputs could becorrect w.r.t. their usage for testing purposes - Denial of credit was upheld, based ondetails gathered from a similarly placed manufacturer - Neither O-i-O nor O-i-Aexamined any evidence w.r.t non-utilization of these duty paid inputs in or in relationto the manufacturer of dutiable final products - Such credit was denied mainlybecausethe raw materials were of non-standard nature & had been procured fromunapproved sources - No evidence of non-receipt of these items by the assessees ortheir diversion without use was recorded - Credit cannot be denied only because theraw materials were from non-approved sources or a similarly placed manufacturerasserted that these items were not required even for trial or testing - Where duty paidraw material was used in relation to manufacture of dutiable final products, creditcould not be denied - Moreover, the raw material confiscated was due to their non-accountal in statutory records - Assessee cannot claim credit on unaccounted goods -Thereby, impugned orders set aside, except for one pending before the Commr.(A) onremand: CESTAT (Para 1,2,8,10,11,12)


CCE Vs Orion Battery (Dated: May 9, 2017)

CX - Assessee filed refund application under Rule 5 of CCR, 2004 for refund of CENVATcredit as they were not in a position to utilize CENVAT credit in respect of inputs usedin manufacture of final products exported - Same was rejected on the ground thatclaimant is ineligible for refund under said Rule as they had claimed drawback underCustoms and Central Excise Duties under Drawback Rules, 1995 - On appeal,Commissioner (A) directed the Assistant Commissioner to consider the refund claim byadopting erstwhile Rule 5 of CCR - As per CBEC Circular 83/2000, Board has clarifiedthat even if assessee has claimed drawback even then he is entitled to claim refundunder Rule 5 of CCR - In case of Meghdoot Pistons (P) Ltd - 2006-TIOL-2026-CESTAT-DEL it has been observed that refund of MODVAT credit or CENVAT credit has norelation to grant of drawback relatable to custom duties - No infirmity found inimpugned orders passed by Commissioner (A), same is upheld: CESTAT


Northern Coalfields Ltd Vs CCE (Dated: June 6, 2017)

CX – CENVAT – Rule 2(k), 2(l) of CCR, 2004 - Definition of input nowhere provides thatany machinery in which input is used must be capital goods – Lubricating oil used indumpers is an admissible input – so also, tyre-retreading service and maintenanceservice of dumpers are ‘input services', credit admissible – Sprinkler system is used tominimize the emission of dust and is mandatory as per the Coal Mines Regulation,1957, credit on such goods cannot be denied – appellant has already reversed thecredit taken on Security services availed at residential colony along with interest wellbefore the same was noticed by department and SCN was issued – no penaltyimposable in view of High Court decision in Castrol India Ltd. 2012-TIOL-2024-CESTAT-AHM – Impugned order set aside and appeal allowed : CESTAT [para 5, 6, 8,9, 10, 11]



MR Utility Products Pvt Ltd Vs CCE (Dated: March 29, 2017)

CX - Dental-plate brush/Inter-dental brush is also a kind of toothbrush and is coveredunder the Third Schedule to the CEA, 1944 - Once Tariff sub-heading 9603 2100 ismentioned with the description toothbrush, one cannot arrive at the conclusion thatinter-dental brush or dental-plate brush is not part of that entry or the saiddescription, when dental-plate brush is also a kind of toothbrush - subject item iscovered by entry at Sr. No. 97A of Third Schedule to C.E. Act, 1944 and is liable toexcise duty - demand hit by time bar since issue involved is of interpretation - penaltyalso not imposable - matter remitted to original authority for re-computing the demandfor normal period - interest imposable - appeal partly allowed: CESTAT [para 5, 6.1, 7]



Rathi Tmt Saria Pvt Ltd Vs CCE (Dated:May 11, 2017)

Central Excise - Assessee engaged in manufacturing of Steel & Iron products -Revenue conducted search in premises of assessee and alleged that assessee wasremoving goods clandestinely without payment of duty by issuing parallel invoices -Revenue also found shortage of finished goods as compared to the raw materialconsumed - Also assessee fraudulently removed fifty lakh rupees from the creditbalance which was confirmed upon examination of register RG-23A - Revenueproduced sufficient reliable documents and evidences in form of corroboratedstatements of assessee's firm employees and director to prove the clandestine removal

of goods and shortage of goods - Further assessee was unable to show a valid reasonfor removing fifty lakhs from the credit balance therefore, impugned order was upheld:CESTAT (2,2,13,14,15)


Samyu Glass Pvt Ltd Vs CCE, CC & ST (Dated:March 12, 2017)

CX - Assessee made straight forward clearances from EOU to DTA, though at lowerrate of duty discharged thereon than what was applicable - It is not the case ofdepartment that assessee had removed the goods clandestinely or that they hadcollected from or reimbursed by, the buyers, the amount of differential duty that waspaid by them subsequently on being advised by department - Assessee has also notcollected differential duty which they retained and paid up only on being advised byDepartment - It is an admitted fact that assessee had not collected any duty amount ofmore than 12.36% from their buyers - As such, price charged by assessee will surelyhave to be adopted as a " cum duty price " - No infirmity is discernible in finding oflower appellate authority: CESTAT


Raj Ratan Castings Pvt Ltd Vs CCE (Dated: April 27, 2017)

CX - Assessee engaged in the manufacturing of M.S. Ingots - Revenue alleged thatassessee indulged in the clandestine manufacture and removal of goods from thefactory in order to evade the duty reason being when revenue conducted search in thepremises of assessee, its director's and its broker then from the premises of broker,revenue found 23 loose slips which contained details of deals executed in the year2003 and 2004 - Based on 23 loose slips SCN was issued imposing duty demand withinterest & penalty - Held - Revenue had not fulfilled the mandatory requirements toprove the guilt of the assessee as ruled by the High Court in the case of FlevelInternational such as evidences related to excess raw material procured by assesseefor manufacturing the goods were not produced by revenue and neither produced anydocument stating where the sales of such materiel being made and who were thebuyers of the goods removed clandestinely - Therefore, demand of duty and impositionof penalty was held bad in law: CESTAT


Sun Pharma Laboratories Ltd Vs CC, CE & ST (Dated: December 14, 2016)

CX - Assessee engaged in manufacture of medicines - Persuant to a Govt. Notfn.,providing 100% exemption from excise duty, to industries which would be establishedin Sikkhim & other backward states, the assessee opened a unit in Sikkhim formanufacturing various medicines & pharmaceutical items - Assessee deposited 100%duty and claimed refund provided for the initial period - However, a subsequent Notfn.was issued, providing only 56% exemption - Assessee sought refund of the benefit of56% out of the 100% payment of duty - Refund was denied on grounds that the earlierrefund would have to be re-credited for want of 44% of that amount - Held - Theconstitutional validity of the impugned Notfn. is in challenge before the High Court ofSikkhim - Whether or not the assessee would have a valid claim depended upon theHigh Court verdict and could not be determined by this Tribunal - Therefore, assesseedirected to appear before this Tribunal after the verdict of the High Court: CESTAT(Para 2,3,4,5,7,8)


CCE Vs Rel Industries (Dated: April 17, 2017)

CX - Assessee is a 100% EOU having customs branded warehouses - SCN was issuedfor demand of duty alleging that assessee has failed to specify export application caston them by Development Commissioner in terms of LOP issued to them - However,

demand of duties as proposed in SCN was dropped by Commissioner vide impugnedorder - CBEC vide circular 21/1995-Cus and circular 122/1995 has clarified thatcustoms department should take action to recover duties involved for non fulfillment ofexport obligation by 100% EOU only after a definite conclusion has been arrived at byDevelopment Commissioner to that effect - Development Commissioner has not takenany action for any such violation against assessee - Consequently, there is no reasonto interfere with impugned order dropping the demand for customs and central exciseduties, same is upheld: CESTAT


Mylan Laboratories Ltd Vs CCE, C & ST (Dated: May 12, 2017)

CX - Issue is regarding denial of CENVAT credit to assessee of CX duty paid on fireextinguishers which are used in factory premises - It is the case of Revenue that fireextinguishers are not capital goods and they have no direct or indirect participation inmanufacture of final goods - Section 38 of Factories Act, 1948 mandates thatmanufacturing unit has to install adequate number of fire extinguishers in order tocontrol the situation that may arise due to fire accident - Manufacturing unit has toadhere to this particular section of Factories Act before granting a licence byauthorities - If a person is mandated to follow the law and if CX duty is paid on suchfire extinguishers, same cannot be denied on the ground that same are not coveredunder capital good and there is no direct or indirect connection - Since the productsare classified under Chapter 84 and CENVAT credit is allowed on capital goods, noreason to uphold impugned order - Impugned order set aside: CESTAT


Pragjyoti Syntex Ltd Vs CCE (Dated: June 2, 2017)

CX - Assessee engaged in manufacturing of TV sets & received the input goods from itsclient - Said client paid the CVD duty on the goods, but due to some technical issue inthe software Special Additional Duty (SAD) was not paid - Client later paid the SAD bytaking remedial measures and issued supplementary invoices - Assessee on the basisof supplementary invoices availed Cenvat credit - Revenue alleged deliberate non-payment of SAD - Duty demand imposed for reversal of credit availed - Held -Considering the judgment in M/s MIRC Electronics & others it was held that whenassessee's client had paid the SAD duty only after the issuance of supplementaryinvoices, assessee availed the Cenvat credit - Thus the no duty evasion could bealleged because CVD duty was paid earlier and SAD was not paid due to technical issue- Impugned order set-aside: CESTAT (Para 2,4)


Panasonic Energy India Company Ltd Vs CCE & C (Dated: May 5, 2017)

CX - Assessee have availed Cenvat Credit on Common 'Input Services' utilized formanufacturing as well as trading activities - Only grievance of assessee is that theyhave reversed proportionate Cenvat Credit on Common 'Input Service' before issuanceof notices and since there was no certainty in law, therefore, malafide intention cannotbe attributed in availing credit on Common 'Input Services' used for manufacturing andtrading activities - Considering CA's certificate and the fact that earlier, assesseeclaimed proportionate reversal of credit on Common 'Input Service' used in tradingservices, imposition of penalty is not warranted: CESTAT


Mangalore Refinery And Petrochemicals Ltd Vs CC (Dated: April 27, 2017)

CX - Assessee is an importer of crude oil - When assessee imported crude oil it wasfound by the revenue that assessee made payment to the supplier of crude oil on thebasis of bill of lading quantity and upon finalization of provisional assessment on the

basis of transaction value revenue demanded the differential duty by adding thedemurrage charges in the assessable value - When assessee challenged the demand ofrevenue before the Commr. it was rejected - When crude is being imported thequantity of crude actually received into shore tank in port in India should be the basisfor payment of Customs duty however quantity shown in bill of lading cannot be usedfor this purpose as it does not reflect quantity of goods at the time and place ofimportation as described in the ratio determined out of the cases of MRPL & ShinePetroleum Pvt. Ltd - Further by considering the case of Essar Steel Ltd. the demurragecharges incurred after the goods reached the Indian port and therefore its a post-importation event and shall not be included to assessable value of import duty - MatterRemanded back to the adjudicating authority to re determine the customs duty byadopting the shore tank quantity method instead on the basis of bill of Lading quantityand as the demurrage charges cannot form part of the transaction value it shall furtherbe excluded while calculating: CESTAT


Avi International Vs CC (Dated: April 12, 2017)

Held: Initially the goods in question were cleared on payment of duty – uponinvestigation it was charged by DRI that the goods were undervalued and the samewere seized - goods are perishable in nature and therefore, are required provisionalrelease - CBEC Circular No. 38/2016 does not bind the tribunal to liberalise thecondition of provisional release in the light of the decision of the Hon'ble Gauhati HighCourt in the case of UOI vs. Amalgamated Plantation (P) Limited = 2012-TIOL-1097-HC-GUW-CX – Hence, the goods are to be released on a condition of furnishing bankguarantee of 30% of the differential duty to the satisfaction of the Commissioner ofCustoms – the duty paid at the time of clearance of goods can be treated as sufficientfor release of goods for re-export - the adjudicating authority shall draw remnantsamples so that there should be no dispute with regard to description, identity, MRPprinted, quality and other details at the time of adjudication – Appeal disposed of –(Para 6, 7, & 8).


Amar Engineering Company Vs CCE & ST (Dated: February 16, 2017)

CX - Assessee manufactures excisable goods - Revenue alleged that assessee wronglyavailed cenvat credit on inputs & had crossed the exemption limit - Assessee producedChartered Engineer's Certificate and return filed under rule 7 of CCR, 2004 along withER-1 which verify that on the day assessee allegedly exceeded exemption limit,assessee had input stock in its premises for the manufacturing of dutiable finishedgoods for its customers - Revenue failed to produce independent evidence to prove itscase hereby making assessee entitled for cenvat credit : CESTAT(Para 2,3,5,6)


Aarti Industries Ltd Vs CCE & ST (Dated: March 2, 2017)

CX - Appellants had received imported inputs against two Bills of Entry dt.26.06.2008and dt.19.02.2008 involving credit - In said Bills of Entry, address mentioned isassessee's address as registered dealer; whereas the material was received at theirmanufacturing unit - Alleging that credit was irregularly availed at the manufacturingunit demand was confirmed and penalty imposed - On going through the relevantdocuments assessee could establish that they had received imported consignment of18,000 kgs of Phosporous Pentro Choride against Bill of Entry dt. 26.06.2008 at theirfactory premises - However, they could not establish the receipt of inputs against Billof entery dt.19.02.2008 in their factory even though they availed credit on said inputsin their books of accounts - Lower authority did not record any reason as to why theseevidences should not be considered in accepting assessee's plea about receipt of inputsin their factory - As far as credit against Bill of Entry No. dt.26.06.2008 is concerned,same is admissible to them - But, since they failed to establish receipt of inputs against

Bill dt.19.02.2008, same is not admissible to them: CESTAT


Power Grid Corporation Of India Ltd Vs CCE (Dated: May 19, 2017)

CX - Assessee was a government owned company engaged in power transmission -Assessee received transmission tower for HVDC transmission project, which wassupplied at nil rate of excise duty under the Notfn. No 108/95-CE - This wasconditional upon if the World Bank would not fund this project then assessee wouldhave to return the excise duty equivalent to deemed export benefits availed by thesupplier - Assessee returned the amount due to the non-availability of funds from theworld bank - However World Bank later disbursed the amount towards the project -Assessee's refund claim to avail the paid excise duty was rejected on grounds oflimitation of time and unjust enrichment - Held - Considering the ratio decidedpreviously in assessee's own cases, the matter was remanded back to the adjudicatingauthority to decide afresh, in the light of the same: CESTAT (Para 2,6,7,8)


Trimula Industries Ltd Vs CCE (Dated:February 6, 2017)

CX - Assessee availed cenvat credit of CTD/TMD bars used in reinforced concretestructures, meant for civil construction work like columns, beams attached to earth -revenue denied credit on these inputs, relying on the Tribunal decision in VandanaGlobal Ltd. 2010-TIOL-624-CESTAT-DEL-LB - Held - The aforementioned judgment wasover-ruled in the case of Mundra Ports and Special Economic Zone Ltd, wherein it washeld that the amended law pertaining to the credit eligibility of the inputs in question,would have prospective effect - Following such precedent, the credit sought byassessee was allowed: CESTAT (Para 1,2,3)


Winsome Yarns Ltd Vs CCE (Dated:February 20, 2017)

CX - Assessee engaged in manufacturing of Cotton Yarn, Cotton Viscose and CottonPolyester Yarn - Assessee challenged the order of Commr. where assessee availedCENVAT credit on GP sheets / GP foil used in the humidification plant of assesseewhere finished goods were made and were neither considered as inputs for finishedgoods nor as capital goods - Demand for duty was raised with interest & imposedpenalty which also assessee challenged as it was raised beyond the period of limitation-Held - GP Coils/GP Sheets were used to make air duct which was claimed as part ofhumidification machine which takes shape of plant after the installation of air ducts indifferent places in assessee's factory premises but GP Sheet/Coils were neither capitalgoods as specified under Rule 2(a) of Cenvat Rules and nor were the components,spares and accessories used to make capital goods - CCR had undergone significantchange due to that GP Coils/GP Sheets didn't fall in capital goods which means noteligible for credit - GP Coils/GP Sheets were not considered as inputs even as theywere not used in manufacture of final product - Further, by applying the ratio in thecase of Rathi Steel & Power Ltd 2015-TIOL-1416-HC-ALL-CX , the extended period oflimitation was rightly invoked and penalty imposed was held justified - Demand ofinterest was also held justified as per the case of Pratibha Processors 2002-TIOL-273-SC-CUS : CESTAT (Para 2,3,8,12,13,14)


Balrampur Chini Mills Ltd Vs CCE AND ST (Dated:December 15, 2016)

CX - Assessee are having composite unit comprising of sugar mill and distillery division- They are engaged in manufacture of Sugar and molasses, ethyl alcohol, rectifiedspirit and Denatured Absolute Alcohol - Further the molasses on fermentation indistillery ethyl alcohol is obtained, same is denatured by mixing certain chemicalswhich make ethyl alcohol unfit for human consumption - Before 01.03.2005,department accepted that rectified spirit is covered under chapter Sub HeadingNo.2204.90 - As 2204.90 covers ethyl alcohol except one for human consumption and

which are undenatured - Therefore, issue to be decided is whether ethyl alcohol andrectified spirit are two different commodities or one and the same commodity - In viewof decision of Supreme Court in case of Modi Distillery and others, ethyl alcohol andrectified spirit are one and the same - Therefore, rectified spirit which is not used forhuman consumption is nothing but ethyl alcohol and is finding place in tariff item no.22072000 - SCN is not sustainable: CESTAT


Bombay Rayons Fashions Ltd Vs CCE (Dated:March 15, 2017)

CX - Assessee engaged in manufacturing and export of garments - Assesseechallenged the order of Commr. which was passed without considering the submissionsof assessee wherein revenue alleged that assessee wrongly availed CENVAT credit onvarious inputs and assessee reversed the credit availed earlier as directed by revenue -Held- Assessee put on record various documents to justify that assessee was eligible toavail CENVAT credit on inputs - Matter remanded back to the adjudication authoritywith a direction to decide matter afresh by considering the submissions of assesseeand by following the principles of natural justice - Also if assessee reversed theCENVAT credit availed earlier by the direction of revenue it does not debar assessee tocontest the denial of CENVAT credit if assessee was eligible for it: CESTAT (Para 2,4)


Century Pulp And Paper Vs CCE (Dated:March 10, 2017)

CX - Assessee engaged in manufacture of writing and printing papers - Whether thecash discount realized back by assessee through debit notes is chargeable to CentralExcise duty - Identical issue has come up for earlier period before Tribunal inassessee's own case in order dated 20.12.2016, where the Tribunal has also relied theratio laid down by Supreme Court in case of Purolator India - 2015-TIOL-193-SC-CX -Hence, there will be no need to add back the discount to the assessable value, even ifthe same are subsequently recovered: CESTAT


Samsung India Electronics Pvt Ltd Vs CCE (Dated: May 2, 2017)

CX - Assessee is 100% EOU and manufactures cellular phones - Assessee soughtrefund of tax paid on input service used for manufacturing of final products - The samewas denied by the revenue as assessee had not taken the cenvat credit on the inputservices - Assessee's appeal before the Commr.(A) bore no fruit - Held - To claimrefund of input service used for manufacturing of final products, assessee was requiredto take the cenvat credit and if the cenvat credit remained un-utilised, then assesseecan file refund claim under Rule 5 of CCR, 2004 - Since, assessee admitted thatassessee had not availed cenvat credit on input service in question at all and neitherany credit showed in their regular ER-2 returns - Therefore, assessee was ineligible forrefund of credit: CESTAT (Para 2,3,7,8,9)


Sanjay Mittal Vs CCE (Dated: March 23, 2017)

CX - Whether penalty of Rs. 10 lacs under Rule 26 of CER, 2002, has been rightlyimposed on assessee, an employee of main party, M/s Qualimax Electronics (P) Ltd. -Assessee was a small-time employee drawing a salary of Rs.10,000/- during therelevant period - Although, he is an educated person, but it is not the case of Revenuethat he was entitled to and/or getting the share in the clandestine activity of hisemployer - It appears that assessee unknowingly got involved as an employee inclandestine activity of his employers - Assessee is held liable to penalty but at thesame time same is reduced to Rs.2,50,000/-: CESTAT


Sanjay S Wadhwa Managing Partner Vs CCE, C & ST (Dated: April 6, 2017)

CX - Assessee engaged in manufacturing of parts of electrical switches and fuses -Revenue alleged that assessee indulged in availing excess Cenvat Credit in respect ofthe goods procured from the EOU - Demand for reversal of credit availed was raised onassessee with interest and imposed penalty - After considering the various documentsand case laws placed on record it was proved beyond the reasonable doubt thatassessee has rightly availed the Cenvat Credit and clarification provided in Notfn.22/09 would apply retrospectively: CESTAT


Philips Electronics India Ltd Vs CCE, C & ST (Dated: May 4, 2017)

CX - Assessee engaged in manufacture of excisable goods and availed Cenvat creditduring the period 2007-2008 to 2010-2011 on various inputs, capital goods and inputservices - Alleging that they are not eligible to CENVAT credit on the same, a demandnotice was issued to them for recovery of credit with interest and penalty - As far ascredit on Angles, beams and channals used in fabrication of structure for holdingmachineries in factory premises are concerned, they are eligible to CENVAT credit inview of judgment in case of Singhal Enterprises Pvt. Limited 2016-TIOL-2451-CESTAT-DEL - Credit availed in relation to M.S. Angles and channals used inmanufacture/fabrication of furniture, namely Table, High Back Chair used in officepremises of assessee cannot be held admissible to them - On eligibility of rent-a-cabservice, tour operator and travel agent services, these services have been held to beinput services by Gujarat High Court in case of Essar Oil Limited - 2015-TIOL-2768-HC-AHM-CX - In relation to Mandap Keeper Service, issue is covered by judgment ofTribunal in case of Accenture Services Pvt. Limited 2016-TIOL-30-CESTAT-MUM and incase of Gardening Service, issue is covered by decision of Tribunal in case of LupinLimited - 2012-TIOL-2099-CESTAT-MUM - Since assessee was not given option todischarge 25% of penalty imposed under Rule 15 of CCR, 2004 r/w Section 11AC ofCEA, 1944, they are eligible to same subject to fulfillment of conditions laid downunder relevant provisions: CESTAT


Renuka Sugars Ltd Vs CCE (Dated: April 24, 2017)

CX - Assessee engaged in manufacture of Sugar, Molasses, Denatured Spirit &denatured Ethyl Alcohol - Revenue alleged that items like HS mill plates, MS channel,MS angle, HR steel plates, chequered plates, aluminium coil, joists used by assesseefor making structure for supporting capital goods not eligible for Cenvat credit as theseitems were neither inputs nor capital goods - Assessee availed 50 % of Cenvat credit,so demand was raised for reversal of Cenvat credit already availed and further deniedthe remaining amount sought earlier also penalty was imposed - On appeal, credit waspartially allowed and penalty upheld - Steel plates and all MS items used by assesseein fabrication of channels would fall within ambit of capital goods and assessee waseligible for credit: CESTAT


Mahindra And Mahindra Ltd Vs CCE (Dated: May 18, 2017)

CX – Classification – Armada vehicle, whether classifiable under heading 8702 (seatingcapacity of 10) as claimed by appellant or 8703 (seating capacity below 10) as allegedby Revenue - SCN has been issued without any evidence and legal basis – ahypothetical demand results in a fatal adjudication order - except a bald statement inSCN as to seating capacity of “Armada Vehicle” without making any technicalexamination or conducting enquiry from Motor Vehicle authority, opportunity ofdefence was denied to the appellant to defend its case - Mere assumption that Armadavehicle had seating capacity below 10 does not make the adjudication sustainable -

adjudicating authority did not conduct physical verification of the vehicle nor thevehicle was sent to the Motor Vehicle authority to ascertain the seating capabilitythereof, for a proper classification – adjudication has been made arbitrarily –Impugned order set aside and appeal allowed: CESTAT [para 4]



Triveni Udyog Vs CCE (Dated: April 5, 2017)

CX - Manufacture - Classification - Conversion of sugar into bura, makhana, mishri,hardas or battasa is manufacture u/s 2(f) of CEA, 1944 - CE duty payable for periodprior to 05.12.2008 when they were granted exemption - demand to be restricted tonormal period and benefit of CENVAT and cum-duty to be extended - no penalties,redemption fine imposable but interest payable on the duty due - matter remanded toadjudicating authority: CESTAT [para 8 to 14]



Romsons Scientific And Surgical Industries Pvt Ltd Vs CCE (Dated: January31, 2017)

CX - Assessee engaged in manufacture of various instruments and appliances used inmedical, surgical dental or veterinary sciences including I.V. Cannulas - Dispute arosewhether subject goods fall within scope of term "Disposable and non-disposablecannula for aorta, vena cavae and similar veins and blood vessels and cannula forintra-corporal spaces" - Show cause notice was issued proposing to deny benefit ofNotfn and to demand duty on goods cleared during the period from March, 2003 to05.02.2007 - Issue herein is squarely covered by precedent orders of Tribunal inEastern Medikit Ltd - 2015-TIOL-2223-CESTAT-DEL where appeal allowed in favour ofassessee - Accordingly, the impugned order is set aside and appeals are allowed:CESTAT


AIA Engineering Ltd Vs CCE (Dated: May 1, 2017)

CX - Assessee has availed Cenvat Credit of ST paid on services viz., "Banking andOther Financial Services" and "Legal Consultancy Services" - Alleging that said servicesdo not fall under scope of definition of 'Input Service' as laid down under Rule 2(l) ofCCR, 2004, demands were confirmed with interest and equal amount of penalty -Tribunal do not find merit and substance in allegation of Revenue in as much as ongoing through specimen bills issued by Bank and enclosed with Appeal Paper Book,invariably in all bills ST was paid on Banking Commission charges in relation to foreignremittance and nowhere charges in said bills were collected relating to forwardcontract entered into between assessee and Bank - ST paid on Commission Charge onforeign remittance is eligible to Cenvat Credit under category of "Banking and ForwardServices" - With regard to Cenvat Credit availed on "Legal Service", issue is more ofless covered by Judgment of Allahabad High Court in case of HCL Technologies Ltd2014-TIOL-2001-HC-ALL-CX: CESTAT


Audi Automobiles Vs CCE (Dated: April 5, 2017)

CX - Issue involved is limited to extended period of limitation - From the record, itappears that plea of assessee is that extended period cannot be initiated as entiredemand is time-barred - But the fact remains that SCN dated 30.04.2008 was issuedfor motor vehicles cleared by noticee no. 1 during period 01.11.2004 to 31.03.2007 -

From the record, it also appears that statements of assessee were recorded by Officersin month of December, 2005 and notice was issued on 30.04.2008 - It was well withinthe knowledge of assessee that duty is payable @ 110% - Thus, notice was issuedcorrectly invoking extended period of limitation - When it is so, then without going intothe merits of case, no reason found to interfere with impugned order which deals onlyon limitation: CESTAT


Ajit Solor Pvt Ltd Vs CCE (Dated: January 24, 2017)

Central Excise - Issue pertains to the Cenvat Credit availed during the period of periodSeptember 2008 and July 2009, during which the appellant cleared their final productavailing the exemption from payment of duty under notification no. 6/2006-CE dated01.03.2006 - Department claimed that they were not entitled to credit as the finalproduct manufactured and cleared was exempted from payment of duty - SCN issuedand Commissioner ordered recovery of inadmissible Cenvat Credit - Hence, the appeal.

Held: The only dispute is that reference to whether interest in liable to be paid till suchtime the credit is reversed - the issue has been settled by the Hon'ble Apex Court inthe case of Ind -Swift Laboratories Ltd for the period prior to amendment in 2012 heldthat “ Rule 14 specifically provides that where CENVAT credit has been taken or utilizedwrongly or has been erroneously refunded, the same along with interest would berecovered from the manufacturer or the provider of the output service - The issue is asto whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as"AND" by way of reading it down - If the aforesaid provision is read as a whole, noreason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly'or has been erroneously refunded' as the word "AND" - On the happening of any of thethree aforesaid circumstances such credit becomes recoverable along with interest” -Hence, no reason to interfere with the order - Appeal Dismissed - (Para 8).


M/s Steel Craft Vs CCE (Dated: May 26, 2017)

CX - Manufacture - Section 2(f) of the CEA, 1944 - Cutting to size flats and angles,drilling holes therein and joining by using nuts, bolts and washers before returning thesame to the principal namely M/s ABB Ltd - appellant paying Service Tax under BAS,however, when same activity is undertaken by appellant on own behalf they are payingCE duty - Duty demanded on goods cleared to M/s ABB Ltd. Held: Perusal of tariffheading 7308.90 shows that the said heading covers structures and parts thereof ofvarious types made up of plates, rods, angles, shapes, sections, tubes and the like,prepared for use in structures, of iron and steel - product cleared by the appellants fitinto such description - Two different yardsticks cannot be followed for the sameprocesses - extended period rightly invoked - duty demand upheld and appealdismissed: CESTAT [para 5, 6]



M/s Britannia Industries Ltd Vs CCE (Dated: March 21, 2017)

CX - Assessee engaged in manufacture of Biscuits and availed CENVAT Credit onAdditional Excise Duty (Goods of Special Importance) - Assessee availed CENVATCredit on basis of dealer's Certificate - According to Revenue, said Certificate should becountersigned by CX Officers - Demand confirmed alongwith interest and penalty - Onperusal of CBEC Circulars, no clarification found that dealer's Certificate would requirethe countersign of CX Officers - Assessee should provide documents to substantiatedealer's certificate as available - Adjudicating Authority would also consider in areasonable manner to protect the interest of Revenue - Impugned order set aside andmatter remanded: CESTAT


CCE, C & ST Vs Buhler India Ltd (Dated: May 1, 2017)

CX - Assessee engaged in manufacturing of parts for rice milling machine and filedclassification list claiming the classification of various products however revenuedisagreed with the classification list filed by assessee and initiated proceedings toreclassify the items - Revenue alleged that Air Jet Fitters used for removing dustparticles from seeds & grains and Super Jet Small Filters used for separating seedsfrom grains and specially designed to be used in a milling industry and furtherclassified under 8421.10 however assessee challenged this before the Commr. whoclassified these two items under 8437 - Held- As per the Section Note 2 to Section XVIAir Jet Fitters & Super Jet Small Filters used in the milling industry for cleaning andpurifying the grains for milling and machinery used in the milling industry wasclassifiable under 8437 and Commr. rightly classified them in his order: CESTAT


M/s Cello Houseware Vs CCE & ST (Dated: April 12, 2017)

CX - Appeal filed against impugned order whereunder adjustment of ST paid in excessfor earlier period i.e. 2012-2013 was not allowed for 2nd, 3rd and 4th quarter offinancial year 2013 - Assessee paid excess amount of ST and is only requestingadjustment of said amount for future period - Revenue contends that adjustment ofexcess amount is not admissible in terms of Rule 6(4A) of STR, 1994 as saidadjustment is possible only for succeeding month or quarter, as the case may be -Matter appears to be covered by Tribunal decision in case of Jubilant Organosys Ltd.2014-TIOL-1870-CESTAT-DEL and Dell India Pvt. Ltd. 2015-TIOL-2815-CESTAT-BANG- Considering the above decisions and observations of Tribunal, impugned order is setaside and appeal is allowed: CESTAT


Arvind Ltd Vs CCE (Dated: March 27, 2017)

CX - Assessee engaged in manufacture of readymade garments and opted to availexemption under Notfn 30/2004 CE which allows exemption from duty subject tocondition that cenvat credit on inputs or capital goods was not availed - During courseof audit, it was observed that for period from February 2006 to January 2008,assessee had availed balance of cenvat credit on capital goods after opting out ofcenvat credit as on 09.01.2006 - SCN was issued for availing irregular credit onbalance credit of capital goods after being opted out from cenvat scheme and also forirregular utilization towards payment of duty for removal of inputs as such - Impugnedorder has been passed on basis of notfn 30/2004 but subsequently vide corrigendum334/3/2004 dated 09.07.2004, the corrigendum was issued by which restriction wasonly on inputs and not on capital goods which means that cenvat credit on capitalgoods is permissible under said notification - But this aspect which is very crucial fordecision was not at all considered in impugned order - Impugned order is notsustainable in law and therefore same is set aside: CESTAT


Bharat Heavy Electricals Ltd Vs CCE, C & ST (Dated: March 28, 2017)

Central Excise – Availment of irregular credit on nickel which was alleged to bemisappropriated by the employees of the Common Material Management Stores (CMM)in the appellant factory – appellant claims that there was a burglary for clandestineremoval – FIR was lodged and later a fire accident occurred and documents relating toissuance of Nickel to inventory got burned – So when the matter was looked into by aGeneral Manager, it was reported that there was removal of nickel by manipulatingIndirect Material Requisition Ships (IMRS) – Thereafter, appellant reversed the credit inregard to the nickel which was removed – SCN issued to the appellant allegingirregular availment of credit in contravention of Rule 3(5) of CENVAT Credit Rules,2004 as the credit was not reversed at the time when the Nickel (input) was removedfrom the factory - the original authority held the total quantity of Nickel removed to be

5411 kgs. and confirmed the duty demand along with interest and imposed equalamount of penalty - Being aggrieved, the appellants are now before the Tribunal.

Held: When the department has issued show-cause notice basing upon the figuresstated in General Manager's report, the adjudicating authority cannot brush aside suchreport lightly - Whether the incidents of clandestine removal of Nickel and articulatedfire with intent to destroy documents will constitute deliberate acts of suppression hasto be examined - All these issues need to be reconsidered for which the matter isremanded to the adjudicating authority – Appeal allowed by way of remand – (Para 9,10, & 11).


Advance Detergents Ltd Vs CCE (Dated: March 2, 2017)

CX - While manufacturing LABSA (Linear Alkyl Benzene Sulphuric Acid) sulphuric acidwas used and in process of manufacture, a byproduct called spent sulphuric acidcomes up - Such bye product whenever sold without end-use necessity of law, dutywas realized and that was paid to treasury - Whenever this spent sulphuric acid iscleared with end-use requirement of Notfn 6/2002-CE for use thereof in manufactureof fertilizer, there was no duty realization made since such clearance is exempt as perthe notfn - Sulphuric acid not being final product, assessee cannot be denied ofCENVAT credit available to it on input used to manufacture LABSA - Mere emergence ofspent sulphuric acid does not debar assessee to this benefit: CESTAT


Avery Boot Company Vs CCE (Dated: February 2, 2017)

CX - Assessee is a manufacturer of Ankle DMS Boots and NCC shoes and supplied toGovernment institution like- CISF and NCC - Pursuant to inspection of factory ofassessee, statement of the Manager- Kamal Kumar was recorded wherein, he statedthat they are not registered with Central Excise Department as their turn-over was wellwithin exemption limit - It was also observed that assessee are not entitled to benefitof Notfn 5/2006-CE, as Footwears manufactured and supplied was not marked with'indelible ink' as required in exemption notfn - Observation and or statement ofManager, Mr. Kamal Kumar, given at the time of search on the spot in factory, is onlya general statement and does not relate to period in question particularly - On suchvague statement, no conclusive averment can be said to be made so as to deny theexemption of Notfn 5/2006- CE - Further, it is admitted fact that assessee hasmanufactured and cleared their product only to Government Organization like- NCC &CISF at the rate contract which is less than Rs. 250/- per pair - Accordingly, impugnedorder set aside: CESTAT


B S Patel L Vs CCE (Dated: February 23, 2017)

CE - Education cess (EC) and Secondary Higher Education Cess (SHEC) cannot becomputed on the Cesses, which are levied under the Acts administered by theDepartments/Ministries other than the Ministry of Finance (Department of Revenue),though the same are collected by the Department of Revenue as per provisions ofthose Acts � Since the Beedi cess is the levy under the Beedis Worker Welfare Act,1976, which is administrated by the Ministry of Labour only, though it may be thatbeedi cess is collected by department of Revenue, considering CBEC circular No.978/2/2014-CS dated 7.2.2014 and the cited decisions, the Education Cess and SHEcess are not to be calculated for the amount of Beedi cess - EC and SHC is not payableon Bidi cess which is leviable under Section 3 of the � Beedi Workers Welfare CessAct, 1976 - impugned order is set aside and the appeal is allowed with consequentialrelief: CESTAT [para 4, 5]


Ballarpur Industries Ltd Vs CCE (Dated: April 7, 2017)

CX - Assessee engaged in manufacture of paper and paper-board of different types andare availing the benefit of exemption Notfn 4/2006-CE - Proceedings were initiatedagainst assessee to demand 10% of value of exempted final products in terms of Rule6(3) of CCR, 2004 - Demand confirmed alongwith interest and penalty - Revenue hasraised demand on the ground that assessee who were manufacturing dutiable andexempted goods and not maintaining separate account, exercised the option on07.05.2008, but had availed benefit of Rule 6 (3) (ii) without exercising the sameduring relevant period - Amendment dated 1.4.2008 can be applied respectively as itrelates to a procedural as it has been held by Tribunal in case of Foods, Fats andFertilizers Ltd. - Once the cenvat credit attributable to exempted goods is reversed,that fulfills the requirements of Rule 6(3): CESTAT


CCE Vs M/s Arunachal Plywood Industries Ltd (Dated: December 27, 2016)

CX - Assessee was engaged in manufacturing of excisable goods - Assessee got refundof excise duty under MODVAT credit and Proforma credit scheme whereas revenuechallenged that the refund granted leads to unjust enrichment - Held- Since, assesseestated the facts for non-applicability of unjust enrichment on the MODVAT credit theyreceived whereas revenue challenged the refund granted to assessee as it was hit byunjust enrichment - Therefore matter remanded back to adjudicating authority todecide the matter afresh by following the principles of natural justice: CESTAT (Para3,6,8,9,10)


JK Tyre And Industries Ltd Vs CCE (Dated: June 23, 2017)

CX - It is untenable to hold that Tyres, tubes and flaps are to be considered as partsand components of automobiles as they are also used in ADV, Aircrafts etc. - no reasonto assess these goods by valuing them in terms of section 4A of the CEA, 1944 -differential duty demand set aside and appeal allowed: CESTAT [para 3, 4]



N K Paper Tube Industries Vs CCE (Dated: June 15, 2017)

CX - When waste and scrap of paper is used, in whichever manner, for safe transportand delivery of the final product and the final product suffers duty on FOR destinationbasis, no reason to treat the value of waste and scrap separately for duty purpose bydenying the exemption under Notification 67/1995-CE - waste and paring arisingduring manufacture of paper tubes and paper cores itself may not fall under thecategory of excisable goods – Impugned orders set aside and appeals allowed: CESTAT[para 5]



Apl Apollo Tubes LTD Vs CCE (Dated: April 6, 2017)

Central Excise - manufacturer of excisable goods namely Steel Tubes & Pipes - availingCenvat credit for inputs and input services used in the manufacturer of final products –removed certain quantum of inputs and reversed the credit availed while purchase -with effect from 01/04/2011, trading was declared as exempt service and appellant isalso engaged in trading, as it has removed substantial quantum of inputs – Revenueclaimed that appellant was required to reverse/pay an amount calculated at the rate of5% on value for reversing credit on goods under Rule 6(3)(i) of CCR, 2004 – Appellant

submitted a reply stating they are exercising option under clause (ii) of sub Rule 3 topay an amount as determined under sub rule (3A) of rule 6 of CCR, for the financialyear 2011 - 12 with effect from 01/04/11 - it was urged that it is improper to treat totrading of goods as output service for the remaining period i.e. Financial year, March,2012 - SCN was issued as it appeared to Revenue that the option under Sub-rule (3A)have not been made in time and the same is not available to the appellant and as suchthe appellant is required to pay a fixed percentage of their exempt turnover (removalof goods as such) and accordingly, pay an amount according to the fixed percentage interms of rule 6(3)(i) of the CCR, 2004 - the proposed demand was confirmed alongwith interest and equal amount of penalty under Rule 15 of CCR read with Section 11AC of the Act – Hence, the appeal.

Held: The appellant has rightly exercised option before the close of the financial yearon 26/3/12 and paid the appropriate duty by way of debit in the Cenvat credit in termsof rule 6(3A) read with Rule 6(l)(ii) – regarding the interest, clause (C) of sub Rule(3A) of Rule 6 provides that the manufacturer of goods shall determine finally theamount of Cenvat credit attributable to the exempt goods and exempt services for thewhole financial year through the amount of CENVAT credit attributable to inputs usedin or in relation to manufacture of exempted goods, on the basis of total quantity ofinputs used in or in relation to manufacture of said exempted goods - the appellant isentitled to the benefit of Rule 6(3)(ii) read with clause (3A) of the CCR 2004 – Matteris remanded for the limited purpose of verifying the amount to be reversed, if thesame is in accordance with the formula and arithmetically correct and the amount ofinterest shall also be verified – Appeal allowed by way of remand – (Para 7, & 8).


Inter Metal Trade Ltd Vs CCE (Dated: March 2, 2017)

CX - Assessee is an 100% EOU and manufactures copper and brass ingots from scrappurchased, as an EOU - Whenever clearances are affected by assessee to DTA, dutyliability is discharged on transaction value, which according to Department is very lowconsidering the value of copper and brass ingots as per London Metal Exchange rates -No attempt has been made by Revenue to examine the contemporaneous price ofsimilarly situated market in India, so that a comparison could have been made forexamining the correctness of transaction value adopted by assessee - Impugned orderset aside: CESTAT


Jai Ambey Containers Pvt Ltd Vs CCE (Dated: April 27, 2017)

CX - Assessee engaged in the manufacturing of corrugated containers of papers -Assessee inorder to avail the benefit of exemption of duty under Notfn. No. 50/2003-CE installed machines such as color Flaxo printer, other machine for pasting, givingcrease to cartons and for drying of cartons through which production increased bymore than 25% however revenue alleged no machinery was installed by assessee formanufacturing of corrugated boxes and as there was no substantial expansion ofmachinery as per the Circular No. 772/5/2004-CX assessee was not eligible for theexemption of duty - Duty demand was raised with interest & imposed penalty -Assessee challenged the order of demand but Commr. upheld the demand and samething happened before the tribunal - Assessee challenged the order before High Courtthen matter remanded back to tribunal to decide on merits again - Held - The CircularNo. 772/5/2004-CX makes clear that the additional plant and machinery mentionedtherein didn't mean addition to the existing machinery in the manufacturing unit butsignifies something new brought inn, in the manufacturing process which furtherincreases the production capacity and also by considering the case of Uttaranchal Iron& Ispat Ltd assessee was eligible for the exemption of duty and impugned order set-aside: CESTAT


Kamakhya Steel Pvt Ltd Vs CCE & ST (Dated: April 17, 2017)

CX - Miscellaneous applications have been filed for recall of ex-parte stay order -Counsel of these appellants had informed them that they are unable to appear on datefixed due to their personal difficulties - Accordingly, as the time was short, theappellants instructed some other person to appear before Tribunal and pray for timebut due to fog conditions, train gets late - Thereafter, said person came to thisTribunal, but could learn that orders on stay applications have already been passed -In respect of Kamakhya Steel Pvt. Ltd., reason for none appearance of Counsel, it isstated that father-in-law of Counsel was seriously ill at that time - There is sufficientreason for non appearance of these applicants on the date fixed, that is 09th January,2017, due to delay of train and/or illness of Counsel's father-in-law - Accordingly, ininterest of Justice stay order dated 09/01/2017 is recalled: CESTAT


CCE Vs Abrol Engineering Company Pvt Ltd (Dated: November 29, 2016)

Central Excise - Availing of benefit of Notification No.8/03-CE dated 1.3.2003 witheffect from 1.4.2007 - Required to debit all the credit lying with assessee as on thatdate - Revenue claimed that inasmuch as the debit of all credit lying with them was notcomplete prior to 1.4.2007, they would not be entitled to avail the benefitof Notification No.8/03-CE - Proceedings initiated against the resulting in denial of SSIexemption benefit to the assessee.

Held: As regards the revenue appeal on issue of debit of all accumulated credit, theissue is no more res integra - Hon'ble Supreme Court reported as 2015-TIOL-77-SC-CX held that non reversal of the credit prior to availing of SSI exemption would notresult in denial of exemption notification - Hence, revenues appeal is rejected -Regarding assesse appeal, though on scrutiny of the purchase invoice placed onrecord, find merit in the assessee's stand but inasmuch as the documents were notverified by the lower authorities, it is deemed fit to remand the matter to the originaladjudicating authority - If the Revenue is alleging that the assessee had taken thecredit on the machine, it is for them to establish the same, which can be easily doneby scrutinizing their cenvat credit account - If no credit has been availed on the same,there is no requirement for payment of duty at the time of clearance of the said oldand used hydraulic press - Appeals disposed - (Para 5, 6, & 7).


Alumeco India Extrusion Ltd Vs CCE, C & ST (Dated: February 23, 2017)

CX - appellants are engaged in manufacture of various Aluminum Profiles and alsoimport duty-free materials for manufacture of such profiles under advance licencescheme for export - Dispute has arisen consequent to DRI investigation and issuanceof SCN by DRI dt. 06.03.2007 which further led to issue of notice by Central Exciseauthorities on 07.10.2008 for recovery of cenvat credit allegedly wrongly availed byappellant - Assessee submits that DRI officers were not proper officers under Section 2(34) of Customs Act, 1962 at relevant point of time as settled by Apex Court in case ofSayed Ali 2011-TIOL-20-SC-CUS - Department submits that notwithstanding decisionof Supreme Court in Sayed Ali case, Apex Court has subsequently admitted the appealof department against decision of High Court of Delhi reported in Mangali Impex Ltd.2016-TIOL-877-HC-DEL-CUS, which had relied upon the Sayed Ali judgment to holdthat DRI officers have no power to issue SCNs prior to 06-07-2011 - Hence, Tribunalshould not adjudicate on this issue till the law is settled by Apex Court in said writpetition filed in Mangali Impex case: CESTAT


CCE Vs Ar Polymers Pvt Ltd (Dated: January 11, 2017)

CX - Assessee are manufacturers of tents made of cotton and availing facility of Cenvatcredit - They classified their manufactured goods under Chapter No. 63 till 28.02.2005and from 01.03.2005 they classified the goods manufactured by them under Chaptersub-heading No. 630600 of CETA, 1985 and paid duty @ 4/% adv. by availing benefitof Notfn 29/04-CE - It appeared to Revenue that goods cleared by assessee were not

eligible to avail benefit of said Notfn which was admissible for all the goods fallingunder Chapter 61, 62 & 63 made up of cotton not containing any other textilematerials - There is no dispute that goods cleared by assessee are falling underChapter 63 and said Notfn provides exemption to all goods falling under Chapter 61,62 & 63 except goods of sub Heading No. 6307.10 - That the tents cleared andreferred by said SCN did not contain any textile materials other than cotton -Therefore, description of goods covered by said SCN matches with entry in said notfnstating to be "cotton, not containing any other textile material" - Thus, during theperiod covered by these appeals goods covered by said SCN were rightfully attracting4% duty as provided by said exemption under Notfn 29/04-CE: CESTAT


West Coast Paper Mills Ltd Vs CCE (Dated: April 25, 2017)

CX - Assessee engaged in manufacturing of paper and paper boards - Revenue allegedthat assessee wrongly availed Cenvat credit by considering M.S. Angles, Channels,Structures, Coils, Components, TNT bar, TMT Cables and M.S. Rebars as capital goodsas per provisions of Cenvat Credit Rules - SCN was issued demanding reversal of dutywith interest and imposed penalty -Held- impugned order denying the cenvat credit onthe impugned goods which were used for laying of the foundation on which themachineries were installed is not sustainable in law: CESTAT


Steel Authority of India Ltd Vs CCE (Dated: June 5, 2017)

CX - Subject items viz. welding electrodes and wash oil have been used in process ofmanufacturing iron and steel items by assessee - Benefit of Cenvat credit denied onwelding electrodes and wash oil used within the factory - In case of welding electrodes,benefit of Cenvat credit has been allowed to assessee in their own case in Tribunal'sFinal Order dated 19.4.2017 - Final products of manufacturing process of assessee areiron and steel products and articles thereof and Wash oil is used for removingimpurities of coal, which is used as fuel during manufacturing of steel items byassessee - There is no dispute of fact that such use of wash oil is within factorypremises and is being used in relation to manufacturing only by assessee - Assessee isentitled to Cenvat credit for inputs viz. welding electrodes and wash oil used withinfactory of assessee: CESTAT


CCE, C & ST Vs Suzlon Energey Ltd (Unit-V) (Dated: May 2, 2017)

CX - Assessee claimed refund of service tax paid on "Back to Town Cargo Demurrage"charges upon considering them as "Port Services", under Notfn. No. 41/2007 - Suchrefund was sanctioned, which is now challenged by Revenue - Held - Departmentalleges that the refund was sanctioned before it could properly complete theverification of the assessee's export documents - Thereby, to ascertain the factualposition whether export has taken place in relation to the said cargo involving refundamount, the matter needs to be remanded to the adjudicating authority forverification: CESTAT (Para 2,4)


Triveni Glass Ltd Vs CCE (Dated: December 7, 2016)

CX - Assessee engaged in manufacture of Sheet Glass & later installed plant &machinery for manufacture of Float Glass as well, within the same premises - Assesseethen availed MODVAT credit of the duty paid on the capital goods used formanufacturing Floating Glass - Revenue held that credit could not be availed on all theitems & imposed duty demand for reversal of credit availed - Subsequently, the creditamount disallowed was slightly reduced but a penalty was imposed - Held - Similarissue was resolved in an earlier case involving the same assessee - The main reasonfor denial of credit is that the required declaration under Rule 57 T of the Rules was

not filed - Credit cannot be denied for some procedural lapse - w.r.t. denial of credit onGrinding Wheel, Belt Switch, Hydro Skid sensor, Skid support mechanized, Hydro viewserial, which was disallowed for not producing original invoice, the assessee importedthese goods under Bills of Entry, such denial is again on flimsy ground for want oforiginal invoice, a fact of payment of duty which could have been easily verified fromthe customs authorities - Further, denial of credit on the ground that the productionofFloat glass had not commenced, is incorrect as the only satisfaction required is that thecapital goods were received in the factory of production and subsequently used formanufacture of floating glass, a fact which is not disputed by Revenue - Moreover,denial of credit on grounds that some documents submitted were marked as 'extracopy' instead of 'duplicate copy' is not tenable - No intent to supress material facts onpart of assessee - Some credit amount uncontested by assessee is sustained: CESTAT(Para 2,3,5,7,9,10)


Hindustan Zinc Ltd Vs CCE (Dated: May 29, 2017)

CX -During Audit of appellant's records, disputes were raised by the department thatinput service credit availed by the appellant on services in relation to tailing dam &maintenance work for pipeline of tailing dam [in E/50958/2014] and constructionservices in relation to Secured Land Fills and Jerofix Storage Ponds [in E/50636/2014],for disposal of Industrial Waste and Polluted Water, have no nexus with themanufacturing process of the appellant and hence, not entitled to take credit underrule 2(l) of CCR, 2004 - SCNs issued invoking extended period of limitation - credit wasdenied on the ground that the said services were in no way required or connected withthe manufacturing activities of the final product i.e. lead, zinc or sulphuric acid eitherdirectly or indirectly. HELD :Appellant cannot operate their business or manufacturingfacility of dutiable / excisable goods without compliance with the directions given byState Pollution Control Board to minimise the pollution under the relevant PollutionControl laws -compliance with the directions of the State Pollution Control Board if notdone by the appellant industry may result in prosecution of the appellant company andits key personnel under the various Pollution Control laws for violation -accordingly,the cenvat credit received on the services for raising the height of tailing dam andmaintenance service for pipeline work of tailing dam, used for disposal of industrialwaste and polluted water in compliance with Environmental laws is an input servicewithin the meaning of rule 2(l) of CCR, 2004 used by the manufacturer indirectly in orin relation to the manufacture of final products and clearance of final products from theplace of removal -similarly, cenvat credit on services procured for construction ofsecured land fill and jerofix storage pond, which are used for disposal of industrialwaste and polluted water in compliance with Environmental laws is an input servicereceived by the manufacturer indirectly in relation to the manufacture of final products- the cenvat credit in dispute is allowable to the appellant -impugned orders set asideand appeals allowed: CESTAT [para 8 ]


HJI Division of Orient Paper Mills Vs CCE (Dated: May 29, 2017)

CX-Cenvat credit on transmission towers including spares/parts of said towers and oninput service of erection/commission/installation of power transmission towers/linesrejected - appeal to CESTAT. HELD:Issue of admissibility of cenvat credit ontransmission towers and spares/parts of said towers is covered by the Tribunal'sdecision in case of Prism Cement Ltd. Vs CCE and ST Bhopal decided by Final OrderNo.52521/2017-TX (DB) - c onsidering the observations made in the Tribunal'sdecision, the appellant is entitled to the cenvat credit for the duty/taxes paid ontransmission towers and their parts/spares - the Tribunal in the case of HindustanZinc Ltd. - 2017-TIOL-1898-CESTAT-DEL has held that consultancy service irrespectiveof laying of pipelines for supply of water from dams to the mines of the appellant is anadmissible service for claiming cenvat credit - by following the ratio laid down in thesaid decision the subject input service is also to be treated as having nexus with themanufacturing activities of the appellant - therefore, ST paid for the services oferection/commissioning/ installation is also admissible as cenvat credit to the appellant- impugned order set aside and appeal allowed: CESTAT [para 4.1, 4.2, 5.1, 6]


CCE Vs Jupiter Stationery Pvt Ltd (Dated: May 25, 2017)

CX - Proceedings relate to purchase of staple pins by M/s.Kores [Kores] from 6different manufacturers located in rural areas, availing small scale exemption - theserural units got staple pins manufactured on job work basis from 6 other small scaleunits [urban units] - the dispute in the present appeals relate to the clearances madeby these rural units during the period 2003-04 to 2007-08 - the proceedings initiatedagainst these units and Kores sought to demand CE duty from them, jointly andseverally, on the ground that the goods have been actually manufactured and clearedby the 4 urban units - the impugned order concluded that the rural units had in factwere involved in packing and labeling activities and were not dummies of Kores -it wasfurther recorded that there was no financial flow back or over-reaching managerialcontrol by Kores -the transactions were held to be on principal to principal basis -theOriginal Authority dropped the proceedings against Kores and other SSI units -revenue in appeal before CESTAT.

HELD - The notice issued to demand CE duty should clearly identify the person fromwhom such duty is being demanded -there can be no demand invoking the concept ofjointly and severally -the plea of the Revenue is that notices were issued to the dummyunits in order to satisfy the principles of natural justice -in such case, the notices are tobe restricted, if at all, only to penal proceedings as no duty can be demanded fromsuch purported dummy units - the Original Authority relying on the assertions made inthe SCN held that the rural SSI units were engaged in packing of staple pins withKores brand -this was evidenced even during the searches conducted by the officers intwo of the such units -the Original Authority also found that while the demand wasraised against the rural units, no such demand was made from urban units in theproceedings - the status of various urban units as having independent existence hasalready been decided by the final orders of the Tribunal dated 10.9.2015 and18.1.2017, in earlier proceedings - as such, no demand can be raised against Kores byclubbing the turnover value of these urban units - the detailed examination andreasoning followed by the Original Authority in the impugned order are in line with thefindings recorded by the Tribunal in the said final orders dated 10.9.2015 and18.1.2017 - as such, no merit found in the appeals by the Revenue - accordingly, thesame are dismissed : CESTAT [para 14, 17, 18, 19]


Thyssenkrupp Industries India Pvt Ltd Vs CCE (Dated: April 24, 2017)

CX - M/s. Monnet Ispat & Energy Ltd entered into contracts with M/s. ThyssenkruppIndustries India Pvt. Ltd., in connection with putting up a boiler in their premises formanufacturing process - Dispute is with reference to set of items fabricated / made atsite - Original authority denied cenvat credit on all items fabricated by M/s.Thyssenkrupp Industries India Pvt. Ltd. at site holding that they are not eligible forcredit - Even if it is considered that there were certain support structures, these itemswere not identified - All items fabricated by M/s. Thyssenkrupp Industries India Pvt.Ltd. are held to be supporting structures - M/s.Monnet Ispat Ltd., have entered intosimilar contracts with various suppliers of boilers and other machinery - Tribunal inFinal Order dated 25.01.2017 elaborately examined the issue and held that even goodssuch as angles, channels and sections which are classifiable under Chapter 73 and areused for fabrication in factory for manufacture of support structures which ultimatelybecome part of boiler would also be eligible for cenvat credit - Re-classification andconsequent denial of cenvat credit on disputed items are not legally sustainable:CESTAT


Thermax Ltd Vs CC (Dated: April 18, 2017)

CX - Whether awarding of bonus to the appellant for timely completion of project issubject to duty under the CEA, 1944. Held: Award of bonus since related to service,the same is not taxable under the CEA, 1944 - being beyond the purview of law,impugned order set aside and appeal allowed: CESTAT [para 1]


Alfa Corporation Vs CCE (Dated: May 26, 2017)

CX - CENVAT - Rule 6 of CCR, 2004 - Issue is whether supplies made to SEZ developeris export and consequently whether the appellant is liable to pay 10% value of thegoods supplied to SEZ developer. Held: Much water has flown on the issue and it wasconsistently held that the supplies made to SEZ developer is indeed ‘export',consequently no payment is required i.e. equal to 10% value of the goods in terms ofRule 6(3) (b) of CCR - in view of settled position in Sujana Metal Products Ltd , LotusPower Gears (P) Ltd. - 2016-TIOL-1410-HC-KAR-CX and Dee Development EngineersPvt. Ltd - 2016-TIOL-1765-HC-P&H-CX the impugned order is set aside and appeal isallowed: CESTAT [para 4]


Bombay Forgings Ltd Vs CCE (Dated: May 3, 2017)

CX - Issue is whether the value of dies manufactured out of raw material supplied bythe buyer shall be added to the assessable value of goods manufactured using suchdies on amortization basis or the cost thereof shall be continued to be added to theassessable value of the finished goods making use of such die indefinitely. Held: Thereis no law shown by Revenue to appreciate their stand that the cost of the dies shouldbe spread over indefinitely - It does not appeal to common sense because taking intoaccount the expected life and capacity of the die and the cost into consideration, theamortizable amount is determined and when such determination is made andamortised cost was added to AV, there should not be further dispute - second disputeis whether the rent paid by appellants to supplier of raw material for manufacture ofdie is includible in AV - there is no record to show that rent payable relates tomanufacture - CEA, 1944 not being the law to tax income like Income Tax Act, 1961,there appears no provision with regard to taxability of rent of the die - Stand ofRevenue fails and appellant succeeds: CESTAT [para 2, 3]


Indian Hotel Company Vs CCE (Dated: May 30, 2017)

CX - Appellant is running a Hotel and have obtained Registration for manufacture ofexcisable goods namely, cakes, pastries, cookies & chocolates, prepared in the BakeryKitchen section only - Appellant availed CENVAT Credit in respect of furnace oil as aninput – Steam generated by use of furnace oil was used in the entire hotel i.e. forCentralized Laundry and heating water which is supplied to hotel rooms, Health Club,Cafeteria and in the kitchen - Case of the Department is that the CENVAT Credit inrespect of furnace oil is admissible only to the quantity attributed to the excisablegoods and not for the entire hotel - entire credit availed on furnace oil was denied bylower authorities – appeal to CESTAT. Held: Appellant had, at the time of takingregistration, declared all the information in their application and also submitted theground plan – appellant had also intimated the department about manufacture ofcakes, pastries and chocolates and also the proposal to avail credit on use of furnaceoil for ‘any other purpose' – there is absolutely no case of suppression of facts on partof the appellant in availing CENVAT credit on furnace oil – extended period invoked bylower authorities is not sustainable – demand time barred, hence, impugned order setaside and appeal is allowed: CESTAT [para 4.1, 5]


Mercedes Benz India Pvt Ltd Vs CCE (Dated: May 30, 2017)

CX – CENVAT credit – Whether credit of service tax paid on Group Health Insurance forfamily members of employees is admissible or otherwise. Held: Group Insurance ismandatory under the statute for employees and their families and the assessee has no

option but to give this facility to employees – expenses incurred on account of grouphealth insurance is borne by the assessee and the same is one of the expenditures foroverall manufacturing activity – Credit is admissible – Impugned order is set aside andappeal allowed: CESTAT [para 4]


Morarjee Textiles Ltd Vs CCE (Dated: May 26, 2017)

CX - Against duty liability, appellant debited CENVAT credit of Rs.22,33,880/- twice i.e.once in June, 2007 and inadvertently same amount was again debited in the Month ofJuly, 2007 - against excess debit, appellant took suo motu credit in their CENVATaccount in June 2008 - SCN issued for denial of credit on the ground that refundprocess as prescribed in section 11B of CEA, 1944 not followed - demand confirmed bylower authorities, so appeal before CESTAT. Held : Suo moto credit taken by theappellant is not against the amount which was paid as duty but of amount paid inexcess - no process of Section 11B is required for claiming such refund - appellant hasrightly rectified mistake on their own by taking suo motu credit - impugned order setaside and appeal allowed: CESTAT [para 4]


Philips Electronics India Ltd Vs CCE (Dated: April 18, 2017)

CX - Capping Cement Paste - Dutiability - Appellant claiming that the goods are notmarketable and without discharging burden of proof of marketability of the said goods,excise duty has been levied. Held: Capability of marketability became criteria for levyof duty, introduced to the Excise law u/s 2(d) of CEA, 1944, w.e.f. 10.05.2008 - Testof marketability having failed, appeal is allowed: CESTAT [para 1]


Pluto Plastics Pvt Ltd Vs CCE (Dated: May 30, 2017)

CX - CENVAT - Raw materials and semi-finished goods destroyed in fire - appellantfiling claim for remission of duty u/r 21 of CER - department directing appellant toreverse CENVAT credit involved in destroyed inputs and semi-finished goods but sincenot reversed, demand issued and confirmed along with penalty - appeal to CESTAT.Held: In the present case, inputs or semi-finished goods did not reach the stage offinished goods and the same got destroyed in fire, therefore, the provisions of reversalof CENVAT Credit, which is with reference to Rule 21 in respect of finished goods is notapplicable - Moreover, there is no machinery provision either under the CCR or CER forrecovery of CENVAT Credit when inputs or semi-finished goods are destroyed in fire -CENVAT credit can be recovered only in case the same is availed or utilized wrongly -since in the present case availment of credit at the time of receipt of inputs wasabsolutely as per law, there was no case of wrong availment of CENVAT credit andhence Rule 14 of CCR is not invokable - impugned order is set aside and appeal isallowed: CESTAT [para 4, 5]


PMT Machines Ltd Vs CCE (Dated: May 31, 2017)

CX – Appellant rented out a portion of their premises to M/s Thermax Ltd/ M/sThermax Babcock & Wilcox Energy Solution Pvt. Ltd. and discharged tax liability asprovider of 'Renting of Immovable Property Service' by debiting CENVAT credit account– Credit so utilized was sought to be disallowed on the ground that the credit availed ofduty paid on input/tax paid on input services was in relation to manufacturing activitiesand not in relation to the renting of immovable property – demand confirmed alongwith penalty, interest – appeal to CESTAT. Held: CCR permits taking of credit under acommon pool and permit use of the credit from the common pool for differentpurposes and there is no restriction placed to the effect that credit accounts should be

maintained separately for manufacture of excisable goods and for use for providingservices – undoubtedly, the appellant has registered themselves as a service providerand pays service tax, therefore, utilization of credit taken by them is valid – impugnedorder is set aside and appeal is allowed: CESTAT [para 6, 7]


South Eastern Coal Fields Ltd Vs CCE (Dated: May 26, 2017)

CX - The issue involved is appellant's eligibility for refund of differential Central Exciseduty on coal cleared by them -the lower authorities rejected the claims of the appellant: HELD -Appellants sold coal based on contracts -one of the conditions of contract isthat the base price of the coal will be determined in terms of price fixed by Coal IndiaLimited - Coal India Limited revised the price retrospectively from 1.1.2012 - when thecontract value is accepted as AV, the duty payment as per such assessment value onlycan be considered as liable duty -the claims were rejected only on the ground thatnon-realization of higher amount by the appellant from the buyer cannot be the groundfor refund - the same is not the issue in respect of these claims -it is the fixation ofcorrect AV in terms of contract and also realization of such AV by the appellants -anyduty remitted to the Government in excess of the liability towards such AV, is to beconsidered for refund - it is necessary for the appellants to submit invoices raised bythem during the material time, details of amount realised towards such invoices fromthe buyers, reconciliation of payment and receipt between the seller and buyer, dutypayment to the Government during the material time and other supporting evidencelike verification of account by Chartered Accountant, non-receipt of invoiced amount tobe supported by the certificate from the buyers etc. - these documents are essentialfor the Department to verify the claim of the appellant - these documents will also helpin determining the question of undue enrichment, if any, in the present case - thesecases are remanded back to the original authority - appeal allowed by way of remand :CESTAT [para 7, 8, 9]


Ador Welding Ltd Vs CCE (Dated: May 30, 2017)

CX - Valuation - Appellant manufacturing Welding machines and parts thereof - SCNissued alleging that appellant had failed to include the design and developmentcharges in the AV of different models of welding machines - demand confirmed bylower authorities - appellant submitting before CESTAT that consultancy services fordesign and development was received by the appellant on principal to principal basisfrom their sister concern M/s Ador Powertron Industries Ltd. ; that the said expenseshave been accounted for in their profit and loss account; that it is not the case thatdesign and development service was received free of cost from customer of weldingmachine; that customers are independent and no amount over and above the salevalue was charged; that the said charges are deemed to have been included in the salevalue being an expenditure of the appellant. Held: Since the design and developmentcharges has no connection with the sale price of the goods to independent buyers, thesame, by any stretch of imagination cannot be included in the assessable value of thewelding machine - demand of duty is absolutely incorrect and illegal - order set asideand appeal allowed: CESTAT [para 4]


CCE Vs Powerica Ltd (Dated: June 09, 2017)

CX – Respondent, having their own existing business, only purchased land from thebank in auction, accordingly, they have not purchased the business either in whole orin part from the earlier owner, therefore, the old dues of earlier owner is notrecoverable from them – Amount paid by respondent is clearly refundable – Revenueappeal dismissed: CESTAT [para 5]



Prestige Feed Mills Ltd Vs CCE (Dated: May 29, 2017)

CX -Appellants is engaged in manufacture of soyabean oil and its by-products - duringthe extraction process of final product, the refined crude oil is stored in tank - in thebottom of the tank, soya sludge gets formed - revenue of the view that such sludge,when cleared for a consideration is liable to CE duty -duty confirmed, equivalentamount of penalty imposed - appeal to CESTAT: HELD - Tribunal has in the cases of Ruchi Soya Industries Ltd. [ final order No.52856 of 2017] and in Kirti Nutrients Limited[final order No.52855 of 2017] held that soya sludge is not an excisable product -following the same, impugned order set aside and appeal allowed : CESTAT [para 3]


Mangalam Cement Ltd Vs CCE (Dated: May 26, 2017)

CX - Appellant is manufacturer of cement - Issue is whether they are entitled to cenvatcredit on dumpers and locomotives. HELD:Rulings in the cases of SD Bansal Iron andSteel Pvt. Ltd. - 2017-TIOL-784-CESTAT-DEL , Rajasthan State Chemical Works -2002-TIOL-66-SC-CX-LB and Bhushan Steel Ltd.- 2012-TIOL-1964-CESTAT-KOL reliedupon by the appellant cover the facts in the present appeal squarely on all fours -accordingly, following the precedent rulings of Tribunal and Supreme Court, credit isadmissible - appeal is allowed by setting aside the impugned order: CESTAT [para 7]


Laxmi Pipes And Fittings Pvt Ltd Vs CCE (Dated: May 25, 2017)

CX-Appellant, a manufacturer of PVC pipes, supplied goods to ‘Jay Hanuman SahakariPani Puravatha Sannstha Maryadit' on the basis of certificate issued by the Collector,Kolhapur under notification no.3/2004-CE dated 8.1.2004 for exemption of excise dutyon equipments which are to be used for the construction of water supply scheme foragricultural purpose - the case of the revenue is that the scheme does not have watertreatment facility like desalination, demineralization or purification of water etc. asmentioned in the explanation to the said notification, hence the benefit of saidnotification is not available : HELD - Appellant have supplied the goods manufacturedby them, PVC pipes etc. on the basis of certificate issued by the Collector, Kolhapur asrequired under notification no.3/2004-CE and no error have been found by the revenuein the said certificate - the whole proceedings is misdirected and bad under the schemeof the Act and Rules - impugned order set aside and appeal allowed : CESTAT [para 5]


Special Spring India Pvt Ltd Vs CCE (Dated: April 13, 2017)

CX - Issue concerns with the submission of statement in Form specified in Annexure 19as prescribed in para 13.2 of Part II of Chapter 7 of CBEC Manual of SupplementaryInstructions - Assessee has not filed said statement - Therefore, revenue hasconfirmed the duty of CX and imposed penalties against exports made by assessee -Held: Assessee is not required to file details as per annexure 19 to special instructionand as such, letter of undertaking cannot be declared invalid by lower authorities -Therefore, impugned order set aside and appeal allowed: CESTAT


Swaraj Foundry Division Vs CCE (Dated: February 8, 2017)

CX - Assessee is in appeal against impugned order wherein cenvat credit on inputswere denied on the premise that invoices against which assessee has taken credit were

not pre-authenticated by dealer and dealer has not maintain records for goods suppliedto assessee - In view of decision in case of Steel Authority of India Ltd. 2008-TIOL-2221-CESTAT-KOL , pre authentication of invoices is a procedural lapse and cenvatcredit cannot be denied on the basis of such lapse - Therefore, cenvat credit cannot bedenied to assessee - Non maintenance of records by dealer, cannot be the ground fordenial of cenvat credit, therefore, assessee is entitled to avail cenvat credit as there isone to one correlation with invoice issued by manufacture and dealer - Impugned orderset aside: CESTAT


Shanti Surgical Pvt Ltd Vs CCE (Dated: May 15, 2017)

CX - Assessee firm was engaged in manufacture of Absorbent Cotton Wool, CardedCotton/Non-Absorbent Cotton, Handloom Gauze, Handloom Bandages & Bandagesetc., under license fropm the Drug Controller, and was eligible to avail benefit underNotfn. No. 30/2004 - Revenue opined that the goods were classifiable under a differentheading and also challenged availment of benefit under Notfn. No. 30/2004 - Revenuefurther held that assessee should have obtained Central Excise registration and shouldhave paid excise duty on the goods so manufactured - SCN was issued in which themanufactured goods were described differently, based on the fact that the goods weresold to hospitals/railway hospitals/defence establishments - Revenue alleged thatassessee failed to maintain proper accounts/records & file periodic returns - Thereby,duty demand with penalty was imposed along with personal penalty on executives ofthe assessee firm - Upon appeal, the Commr.(A) held in favor of the assessees - Held -Revenue rather than classifying the goods under the specific CSH as per theirnomenclature and the material used therein, instead resorted to various Section notes,Chapter notes, HSN explanations and end use of the goods - The letter 'IP' standing for"Indian Pharmacopoeias" on the packing material and the fact that the assessees had aDrug Licence issued under Drugs & Cosmetic Act, was made a base for classification ofgoods - For classification an attempt should be made to find the most specific entry,depending upon the nomenclature of the goods and the constituent material used - Inabsence of such entry, the nearest specific entry may be resorted to - Where both arefutile then an attempt should be made to consider the end uses, the inclusion andexclusion clauses provided in the section notes, the chapter notes and the explanatorynotes given the HSN - Here, the interpretation of the said Notes would depend uponthe context in which the entries were worded - Where an entry was clearly worded andwas broad in character, then the same would lead to the conclusion - An entry was tobe given its ordinary meaning - Thereby, if any goods fit in within one entry, the samefor any purpose would not be held to be included in the other and in particular theresiduary - Hence the impugned O-i-A correctly struck down the revenue'sclassification, following the basic rules of interpretation holding that a specific entrywould have precedence over a general entry - Assessee's appeals upheld whilerevenue appeals dismissed: CESTAT (Para 3,5-8,10)


Durga Trading Company Vs CCE (Dated: May 18, 2017)

CX - Assessee engaged in manufacture of pan masala & gutka - Assessee had 48packing machines in its factory, of which 4 were sealed - Upon request, 26 additionalmachines were sealed & assessee declared intention to operate 18 machines only -However, revenue passed an order stating that the assessee was operating 44machines and imposed monthly duty liability accordingly - Assessee filed arepresentation to revenue mentioning its operation of 18 machines (16 for gutkha + 2for pan masala) & also sending a reminder that 26 machines had been sealed -Assessee also attached a copy of the revenue report to that effect and requested theamendment of its Annual Capacity Production & monthly duty liability accordingly -Nonetheless, SCN was issued imposing duty demand with interest & penalty on theincorrect assumption that the assessee was operating all of its 48 machines - Sinceassessee had paid tax for operating 18 machines, revenue alleged short payment ofduty on the remaining 26 sealed machines - Subsequently, demand in respect of the 4

machines initially sealed was dropped - Held - SCN was vague & contradictory -Revenue did not challenge the assessee's declaration to perate only 18 machines -Moreover, sealing report of 26 machines was not considered - There is also no case ofsuppression or willful mis-statement with intent to evade payment of duty - Hence,duty demand with interest & penalty set aside: CESTAT (Para 2,3,4,8,9,10)


Ismt Ltd Vs CCE (Dated: May 16, 2017)

CX - Valuation - Product Development Cost - Debit notes caused deliberateundervaluation - Duty Amount paid during investigation before issue of SCN - penaltyis the only remedial measure to protect Revenue else it would be an incentive tolawlessness - appellant made attempt to be enriched at the cost of Revenue - Fordeliberate act of the appellant to exclude the debit note amount from the scope ofduty, questionable conduct and oblique motive of the appellant came up and thatcontributed to its implication to the charge - Taxes paid today is more valuable for thecountry to fund public welfare than sacrificing public revenue on the palpable plea ofRevenue neutrality which is subject to scrutiny to grant Cenvat Credit to a differentunit - Not only the manufacturer appellant M/s. ISMT Ltd. but also its Director ShriO.P. Kakkar, the second appellant defrauded Revenue - Duty liability and penaltiesupheld and appeals dismissed: CESTAT [para 6 to 13]



KL Concast Pvt Ltd Vs CCE & ST (Dated: March 30, 2017)

Central Excise – CENVAT Credit - the appellant is engaged in the manufacture of MSShapes & Sections etc., and availed Cenvat credit on inputs and capital goods - Duringthe course of audit, from time to time, it was found that the appellant have availedCenvat credit on items like MS Round, H. R. Sheets/Plates & Welding Electrodes, TMTBars, MS Angles, MS Pipe, etc. - Revenue viewed the items ineligible for Cenvat credit;adjudicated denial of the same / demand for its recovery with interest and penaltywhich was upheld by Commissioner (Appeals) and agitated herein.

Held: The Larger Bench of the Tribunal held that the appellant is entitled to credit onvarious items except Iron & Steel, Bars, etc. observing that the items in question havebeen used by the appellant for fabrication of capital goods and/or parts of capitalgoods or used as inputs in manufacturing of final products as is evident from therecords and also the certificate of the Chartered Engineer - So far Iron & Steel Bars, &Rods etc. are concerned, the same have been used for manufacturing (pushing of rawmaterial in the furnace) and in the process these items get consumed and/or meltedand as such credit is allowable as inputs - it is evident that there were earlier periodicaudits and the Revenue had found the Cenvat credit allowable in the previous audits;the SCNs are factually issued for earlier period based on changed opinion by audit - Sofar the credit taken by the appellant on the basis of invoice of M/s MSC Agency India(P) Ltd., it is explained that the invoice was on the other unit of the same company buterroneously credit was taken in this unit and upon being pointed out the error, theappellant immediately debited the credit taken in this unit and took the allowablecredit in the respective unit – following the earlier ruling in appellant's own case he isentitled to Cenvat credit on all the items in question as allowed earlier - So far the MSRounds & TMT Bars are concerned, the same have been used as inputs inmanufacturing (pushing of raw material in the furnace) in which such goods consumed,and accordingly the credit of the same is allowable - Under the facts andcircumstances, the extended period of limitation is not attracted, and no penalty isimposable in case of the credit taken on the invoice of M/s MSC Agency India (P) Ltd –impugned order set aside with consequential relief. [Para 3, 5]


Lotus Power Gear Pvt Ltd Vs CCE & ST (Dated: April 5, 2017)

Central Excise - CENVAT Credit - the appellants are engaged in manufacture ofelectrical switch gears and control panels - During an audit intervention, it wasobserved that they availed and utilized Cenvat credit on the services provided by M/sPai & Pai Chemicals India (P) Ltd, Bangalore for the treatment and disposal of effluentwater, generated during the course of manufacture in their plant - Revenue viewed thesame irregular, and denied it in adjudication, confirmed the demand for its recoverywith interest and penalty - Demands upheld by Commissioner (Appeals) on the groundthat the disposal of effluents are only post manufacture in nature and not a serviceused in or in relation to the manufacture of final product; now agitated herein.

Held: The impugned order is not sustainable in law because the disposal of industrialeffluents are vital in safeguarding the environment - the appellant had availed theservices of an independent agency to dispose of the effluents which arise from themanufacturing process and therefore the same is integrally connected with themanufacturing process - impugned activity falls in the definition of input services underRule 2(l) of CCR 2004. [Para 3]



CX - Assessee, a manufacturer of lead and zinc concentrates and is engaged in exportof such goods under Bond - Concentrates so manufactured are moist in nature whichare measured as WMT (Wet Metric Tonne) - However, value and duty for saidConcentrates are determined with reference to actual quantity (without moisture),which is measured as DMT (Dry Metric Tonne ) - Considering the mismatch of quantityin WMT mentioned in AR-4 form and WMT quantity cleared and shipped, departmentfound that there was short shipment/export of Concentrates of the certain quantity ofzinc and lead concentrate with reference to goods cleared from factory for exportunder Bond - Impugned order has raised a new issue saying that there may bepossibility that goods cleared under these ARE-1s have been diverted - Matterremanded to Commissioner for fresh adjudication, where assessee shall be givenopportunity of personal hearing and submission of relevant documents to prove thefact of export of goods; and thereafter, if there is any discrepancy found in respect ofquantity of exports in terms of weight in DMT then only demand be confirmed againstassessee: CESTAT


Jakap Metind Pvt Ltd Vs CC & CE (Dated: June 9, 2017)

CX - Whether there is burning loss of 7.5% or even 15% that alone cannot be reasonto demand the duty - It is not the case of revenue that due to burning loss, anyquantity of either brass scrap or processed rods has been diverted somewhere elseinstead of bringing to the factory by the appellant - demand worked out by taking theSION norms provided in the Foreign Trade Policy is not correct - Impugned order setaside and appeal allowed: CESTAT [para 4]



Flex Foods Ltd Vs CCE (Dated: May 16, 2017)

CX - Assessee, a 100% EOU was granted LOP for manufacture of freeze driedvegetable and tropical fruits, individual quick frozen mushroom, culinary herbs,vegetables and fruits and also dehydrated mushroom - They obtained permission fromDevelopment Commissioner Noida SEZ for DTA sale of certain products - Revenueviews that goods cleared in DTA by assessee were not conforming to permissiongranted by Development Commissioner for DTA sale - The letter of permission as wellas permission for DTA sale, on the basis of export obligation fulfilled by EOU, isdetermined by Development Commissioner - Entitlement for concessional duty isrequired to be evaluated strictly in terms of various permissions granted by

Development Commissioner - In impugned order dated 20.02.2015 method adoptedfor determining concessional duty benefit is not in accordance with specific permissionsgranted by Development Commissioner - Stand adopted by Commissioner (A) inimpugned order is also strictly not in conformity with DTA permission - Matterremanded to Jurisdictional Commissioner for de novo decision covering the entireperiod in two appeals: CESTAT


Chemical And Allied Products Vs CCE (Dated: March 7, 2017)

CX - Assessee engaged in manufacturing of PSTA, Thinner & Pent Acid and claimed40% exemption of duty under Notfn 13/2002-CE (NT) which was denied - In spite ofrepeated query as to the basis of mentioning MRP for a product for which MRP was notto be mentioned in packages, assessee was not able to show from record any materialbased on which MRP was declared to the Department - Therefore, findings of lowerauthorities holding that there was mis-declaration on part of assessee is acceptable -Therefore, assessee is not eligible for benefit as claimed in terms of Section 4A of CEA,1944: CESTAT


M/s Rathi Steel Ltd Vs CCE & ST (Dated: February 16, 2017)

CX - Assessee is manufacturer of Bars and Rods of Iron and Steel, is in appeal againstdenial of Cenvat Credit on inputs purchased from first/second stage dealers on theground that such dealers on enquiry, was found had not purchased any duty paidgoods for trading and then in their statement to Revenue, have admitted the fact - It isnot the case of Revenue that assessee have not complied with provisions of Rule 9(3)of CCR or have been negligent on their part - It is further admitted fact that alertcirculars were issued much after the transaction had taken place - Revenue have notmade out a case that assessee received raw material from other sources which havebeen used for manufacture of excisable goods and cleared on payment of duty -Assessee have discharged their onus under scheme of Act and Rules and have takencredit on receipt of inputs along with duty paying documents - Once, it isdemonstrated that reasonable steps had been taken, which is a question of fact in eachcase, it would be contrary to rules to cast an impossible or impractical burden onassessee: CESTAT


CCE Vs Satia Paper Mills Ltd (Dated: October 18, 2016)

CX - Assessee is registered with Central Excise Department for manufacture of writingand printing paper and produce both the dutiable and exempted paper - They wereissued three SCNs dt. 06.09.2005, 03.03.2006 & 07.04.2006 - Allegation in SCNs isthat services were not covered under Rule 6(5) of CCR and assessee were required tomaintain separate records for receipt, consumption and inventory of input servicesmeant for use in manufacture of dutiable and exempted final products - Demand of Rs.8,27,491/- dropped on the basis that maintenance of separate records in respect ofcertain services is not a statutory requirement - Demand of Rs. 88,303/- has beendropped by adopting details of invoices/stock bills used for availing credit and inputservices used exclusively for dutiable goods - When assessee has already reversed theCenvat Credit on input/input services attributable to final exempted goods, they arenot required to pay 10% of value of exempted goods - No infirmity found in impugnedorder, same is upheld: CESTAT


Ramco Cements Ltd Vs CCE, ST & C (Dated: February 13, 2017)

CX - Assessee engaged in manufacture of cement and registered with ST departmentfor providing taxable service under category of GTA - During audit, it was observedthat assessee have erroneously availed cenvat credit of ST paid on insurance chargesfor wind mill value and foundation, Air Travel Bills, Taxi Bills, Club Bills and MotorVehicle Service Charges - Travel Services, Tax Services and Motor Vehicle Services

were availed by Top Executives in relation to marketing of product of assessee - Asregards to cenvat credit on Club Bills, these are private clubs and are not businessclubs and therefore expenditure of club cannot be termed as an input service - Cenvatcredit denied on Club Bills pertaining to Madras Gymkhana Club and Presidency Club -As far as ST paid on Insurance, Air Travel Bills, Taxi Bills and Motor Vehicle Servicecharges are concerned, appeal of assessee allowed in view of various judgmentscovering these services: CESTAT


Hindustan Petroleum Corporation Ltd Vs CCE (Dated: May 5, 2017)

CX - Limitation - Assessee engaged in manufacture of refining of crude and marketingvarious petroleum products and they have an installation at Mangalore namelyMangalore LPG Import Facility (MLIF) to receive and store imported LPG as well asindigenous LPG in bulk - Imported LPG is cleared on payment of applicable customduty/CVD - The LPG is also procured indigenously from Reliance Petroleum Ltd andMRPL - Demand of duty confirmed on terminalling charges with respect to deliveriesmade out of MRPL cargo - Period of dispute is from 01.05.2002 to 5.9.2004 and SCNwas issued on 19.4.2006 by invoking longer period of limitation alleging suppressionwhich is legally incorrect - Assessee have been collecting terminalling charges andpaying ST right from August 2002 and all workings have already been submitted todepartment along with monthly periodic returns and department was very much awareof collection of terminalling charges - Mere omission to give correct information is notsuppression of fact unless it was deliberate to evade payment of duty - Assesseecannot be penalised by invoking extended period under proviso to Section 11A(1) ofCEA, 1944 for payment of duty and penal provisions of Section 11AC for indulgence onpart of Jurisdictional Central Excise Officers: CESTAT


International Tobacco Company Ltd Vs CCE (Dated: May 4, 2017)

CX - Assessee engaged in manufacture of cut-tobacco and different brands ofCigarettes - Assessee brought into their factory inputs for manufacture of their packingmaterial to be used for packing of goods manufactured by them - Some of packingmaterials was also used of making dummy packs, which are not sold and weredistributed and used as advertising material - Dummy packs were not marketable,since they were not capable of being bought and sold in market because they wereadvertising material of assessee who were marketing the same - Therefore, dummypacks did not attract CX duty - Since question of dutiability does not arise, thequestion of classification of said goods under chapter 48 and 49 does not arise:CESTAT


Cadbury India Ltd Vs CCE (Dated: April 11, 2017)

CX – Photo frames given free along with supply of Diwali institutional packs ofChocolates are CENVATable – Interest on receivable is a permissible deduction from AV- Appeal allowed: CESTAT [para 6, 7]



Rane Trw Steering Systems Ltd Vs CCE (Dated: April 12, 2017)

CX - Issue relates to denial of input service credit in respect of garden maintenanceservice - Service for attaining colour of eligible input service should have been, interalia, used by manufacturer directly or indirectly in relation to manufacture andclearance of final products - As such activity does not pass the test of usage criteria, oris not enjoined on them by various statutory requirements and further such activity is

also not barred or excluded by exclusion provision (A), (B), (BA) and (C) in secondpart of definition of Rule 2 (l) of CCR, 2004, same cannot be treated as an 'eligibleinput service' - Impugned service availed for purpose of garden maintenance byassessee will, by no stretch of imagination, fall within purview of eligible input servicefor purpose of Rule 2 (l) ibid - No infirmity found in confirmation of tax liabilities, whichare upheld - Since there are contrary decisions in respect of eligibility of said service,element of confusion cannot be ruled out - Thus, penalty set aside: CESTAT


Godrej And Boyce Mfg Company Ltd Vs CCE (Dated: April 18, 2017)

CX - Assessee manufactures storage systems and clear components of storage systemsuch as slotted angles, panels, vertical upright, horizontal bracing, vertical bracing andbase plates on payment of duty in customers site, where storage systems areassembled/installed as per specific design or as per customer's requirement - Issuealleged in Notice is that value of items bought out by assessee and removed along withother items under separate commercial invoice would require addition to assessablevalue of other components - Once these bought out items are used at the customer'ssite for installation of storage system, they would become part of immovable propertyattached to ground and hence would not be exigible - Therefore, value of bought-outitems cannot be included in assessable value of other manufactured goods cleared byassessee in terms of section 4 of CEA, 1944 - There does not appear to be any rhymeor reason for inclusion of extended period and corresponding imposition of equalpenalty under section 11AC of Act - SCN is therefore, clearly hit by limitation: CESTAT


Godrej And Boyce Mfg Company Ltd Vs CCE (Dated: April 18, 2017)

CX - Assessee manufactures storage systems and clear components of storage systemsuch as slotted angles, panels, vertical upright, horizontal bracing, vertical bracing andbase plates on payment of duty in customers site, where storage systems areassembled/installed as per specific design or as per customer's requirement - Issuealleged in Notice is that value of items bought out by assessee and removed along withother items under separate commercial invoice would require addition to assessablevalue of other components - Once these bought out items are used at the customer'ssite for installation of storage system, they would become part of immovable propertyattached to ground and hence would not be exigible - Therefore, value of bought-outitems cannot be included in assessable value of other manufactured goods cleared byassessee in terms of section 4 of CEA, 1944 - There does not appear to be any rhymeor reason for inclusion of extended period and corresponding imposition of equalpenalty under section 11AC of Act - SCN is therefore, clearly hit by limitation: CESTAT


JD Industries India Ltd Vs CCE (Dated: May 26, 2017)

CX - Assessee have been availing inputs credit on HR coils/ skelps purchased fromJaipur and Bharatpur depots of SAIL since they have facilitated to cut coils / skelps, HRcoils procured from SAIL depots - Allegations made against assessee is that inputs HRCoils were procured by them and sent directly to cutters in Jaipur but Cenvat creditwas availed for such inputs - On the basis of investigation carried out at the end oftransporters, Revenue has assumed that inputs have been diverted at Jaipur withoutreceipt of the same at assessee's factory - Even though specific evidence are notforthcoming from records evidencing receipt of cut HR coils in assessee's factory,assessee has submitted that they have issued 45 invoices for clearance of inputs assuch and have also paid Excise duty leviable thereof - From CAs' certificate, it emergesthat out of total raw material procured during disputed period, significant part hasbeen consumed in production of final product - Total demand raised in SCN and upheldby lower authorities need to be reduced to the extent of duty already paid for inputscleared as such: CESTAT


Heidelberg Cement India Ltd Vs CCE (Dated: April 26, 2017)

Central Excise – CENVAT Credit - the appellants are engaged in the manufacture ofCement and Cement Clinker and are availing the facility of cenvat credit under CenvatCredit Rules, 2004 - They have made a provision for obsolescence of stock of storesand spares for the (calendar) year ending 2010 but did not pay the amount equivalentto credit availed on the obsolete items - a show-cause notice was issued demanding(reversal of) the cenvat credit availed on the inputs in respect of which a provision towrite off has been made in the Books of Accounts, under Rule 3(5B) of the CenvatCredit Rules 2004, along with interest and penalty, followed by another show-causenotice pertaining to the year ending 2011 on identical grounds - The notices wereadjudicated demanding recovery of credit with interest and penalty under Rules 14 and15(1) of the Cenvat Credit Rules, 2004; upheld by Commissioner (Appeals), andagitated herein.

Held: The appellant has made provision to write off the value of inputs partially in theirBooks of Accounts as the company policy does not allow to make any provision to writeoff obsolescence of stores and spares fully - the inputs for which the provision of writeoff was partially made was subsequently used in the manufacture as per the provisionsof Rule 3(5B) which provides that in that situation the appellants are entitled to takeback the credit in terms of the provisions to Rule 3(5B) – for the period prior to01.03.2011 the ratio of CCE, Jamshedpur Vs. Tata Motors Ltd. applicable, and theappellants are not required to reverse the cenvat credit - there was no recoverymechanism to recover the cenvat credit wrongly taken under the provisions of Rule3(5B) and the recovery mechanism was brought into existence from 01.03.2013 videNotification No. 3/2013-CE (NT) dated 01.03.2013 - demand of cenvat credit for theinputs for which the provision to write off has been made is not sustainable in both thecases; impugned order set aside with consequential relief [Para 5]


CC, CE & ST Vs Escorts Mahle Ltd (Dated: May 4, 2017)

CX - Assessee transported goods from factory to depot and from depot to stockist -Assessee transported goods from factory to depot & then cleared goods to stockist with18.5% trade discount whereas sub-stockist's were given discount of 16% - In theimpugned order, Commr. allowed 18.5% discount to all the clearances to stockist's forwhich revenue contesting this finding of Commr. - Assessee claimed the turnoverdiscounts as abatement from the assessable value on an average basis howeverrevenue took a different view and alleged turnover discount was allowable asabatement on actual basis - In the provisional assessment Commr. directed theadjudicating authority to adjust the demand on account of finalization of provisionalassessment against the refund due to the assessee however revenue allegedadjustment of refund with the demand will not be allowable until each transaction firstto be examined in the light of the question of unjust enrichment - Held - The Commr.rightly allowed 18.5% discount to all the clearances to stockist's as per the Section 4Central Excise Valuation Rules - Further deduction of trade discounts for determiningthe assessable value was permissible only to that extent for which discount actuallypassed on to buyers therefore by considering the case of Goezte (India) Ltd matterremanded back to the authority with the directions to verify the discounts and allowthe abetment of turnover discounts on actual basis - The adjustment of refund with thedemands at the time of finalization of provisional assessment was permissibleaccording to the ratio decided in the case of Toyota Kirloskar Auto Parts Pvt. Ltd :CESTAT


Essar Packaging Pvt Ltd Vs CCE & ST (Dated: May 1, 2017)

CX - Assessee engaged in activity of printing of laminated and un-laminated poly rolls -It appeared to revenue that printing of laminated and un-laminated poly rollsamounted to manufacture and they did not get themselves register with CXdepartment and did not pay duty - Demand confirmed and penalty imposed - SCNnowhere established that printing amounted to manufacture - Period covered by saidSCN is from 2006-07 to 2010-11 while lamination has been covered by definition ofmanufacture wef. 10.05.2008 - As per note 2 of Section note of section VII of scheduleto CETA, 1985, said goods fall under Tariff Item No. 4911 and the same attract nil rate

of duty - Thus, printed poly films do not attract CX duty, further till 09.05.2008laminated printed poly films did not attract CX duty - Further, wef. 10.05.2008, printedlaminated poly films fall under Tariff Item No.4911 and attract nil rate of duty -Therefore, impugned order set aside and since the demand is not sustainable,penalties imposed are also not sustainable: CESTAT


Facor Alloys Ltd Vs CC , C & ST (Dated: April 13, 2017)

CX - Assessee, a manufacturer of Ferro alloys availed input credit on molasses,supplied by M/s. Imcola on the basis of document which is an invoice issued by Imcolaand a copy of challan (GAR-7) evidencing the payment of duty to Imcola - Departmentobjected to credit availed holding that documents are not specified in Rule 9 of CCR,2004 and also that supplier is not registered supplier to pass on credit under CCR -Since there is no dispute with regard to duty paid on inputs as well as the utilisation ofinputs in manufacture of final products, denial of credit on the ground of proceduraldefect that document is not proper is unjustified - Assessee having availed credit onduty paid and also having disclosed the nature of credit availed in ER1 returns, theycannot be saddled with suppression of facts with intent to evade payment of duty -Therefore, assessee succeed on ground of limitation also: CESTAT


Manohar Singh Rana Vs CCE (Dated: April 13, 2017)

Central Excise - Personal Penalty - Shri Vijay Soni is the Director, and Shri ManoharSingh Rana works as Excise Incharge & Authorised Signatory of the assessee M/s SoniIspat Ltd., who are said to have been indulging in evasion of Cenvat duty by way ofunder-valuation of excisable goods manufactured by them, suppression of productionof excisable goods and illicit/clandestine clearances of same without payment of duty -The officers of the Directorate General of Central Excise Intelligence (DGCEI) madesearches of their factory premises and related office/premises at Indore and Mumbaiand seized incriminating documents/records under proper Panchanamas - Based oninvestigation and the statements recorded of the two Show Cause Notices were issued,the impugned Order-In-Original has imposed personal penalty on the presentAppellants namely Shri Vijay Soni and Shri Manohar Singh Rana; agitated herein.

Held: Both Appellants have been made liable for the penalty under Rule 26 of CentralExcise Rules, 2002 based only on the statement of Shri Rajiv Saini, CMD of theassessee company - There are no specific documentary evidences or even thestatements of these two Appellants indicating that they had a guilty mind, and theyhad personal knowledge and involvement in the evasion of duty/taxes - element ofpersonal knowledge or mens rea is an essential prerequisite for imposing the personalpenalty - When the Department fails to establish that the two Appellants had personalknowledge and guilty mind (mens rea) in respect of the activities of the assesseeleading to evasion of duty of Central Excise, the penalty imposed under Rule 26 ofCentral Excise, 2002 on the Appellants is not sustainable - following Tribunal'sdecisions in the cases of Z.U.ALVI and O.P. Agarwal; personal penalties imposed onboth the Appellants under Rule 26 of Central Excise, 2002 is dropped; the impugnedorder is set aside pertaining these two penalties [Para 6, 6.1, 7]


Shilpi Cable Technologies Ltd Vs CCE (Dated: May 29, 2017)

CX - Mere fact that some of the accessories were cleared as such will not makeappellant ineligible for CENVAT credit - no justification to order for further recovery ofcredit on these inputs which were already reversed by the appellant at the time ofclearances : CESTAT [para 5, 6]



Hindustan Zinc Ltd Vs CCE (Dated: April 28, 2017)

CX - Issue is regarding cenvat credit of ST paid on technical inspection and certificationservices with respect of pipe lines for supply of water from dams to Dariba Mines ofassessee - Subject matter is covered by Tribunal's decision in assessee's own case vide2016-TIOL-2040-CESTAT-DEL - By following order of Tribunal, it is clear that subjectinput service is having sufficient nexus with manufacturing process of assessee and iscovered by the definition of 'input service' under Rule 2(l) of CCR, 2004 - Therefore,service tax paid on such services is eligible to be claimed as Cenvat Credit byassessee: CESTAT


Rane Trw Steering Systems Ltd Vs CCE & ST (Dated: April 12, 2017)

CX - Assessee is a manufacturing unit, strictly following the norms laid down byvarious agencies inter alia Tamil Nadu Pollution Control Board - As per these norms,different types of hazardous waste that has emerged in manufacturing process havenot been permitted to be treated or disposed of within factory of manufacturer - It isfor this reason, assessee have engaged services of Tamil Nadu Waste ManagementLtd., authorized by Tamil Nadu Pollution Control Board, to collect hazardous wastefrom their factory and effect transportation thereof to Gummudipoondi for enablingsafe disposal thereof after treatment, in a designated land fill area - Services availedby assessee are very much essential to run manufacturing process and hence are verymuch used by them in relation to manufacture of their final products - Such serviceshad necessarily to be availed as per the requirement of Pollution Control Board - Saidinput service availed is also not barred by exclusion provisions of said Rule 2 (l) ofCCR, 2004 - Input services will doubtlessly be an 'eligible input service' for the purposeof Rule 2 (l) ibid: CESTAT


MM Forgings Ltd Vs CCE (Dated: April 19, 2017)

CX - Assessee are manufactures of forgings and availed cenvat credit on Raw DieBlocks and Inserts under category of inputs - Whether assessee are eligible to availcredit on Raw Die Blocks and Inserts used by them for manufacture of Dies which are,in turn, used for production of finished products - Assessee have availed exemptionnotification treating the intermediate product as 'capital goods' - Following thejudgement rendered by Division Bench of Tribunal in Tata Engineering and LocomotiveCo. Ltd. and appreciating the evidence, assessee are eligible for credit - Impugnedorder disallowing credit is set aside: CESTAT


CCE Vs Jindal Saw Ltd (Dated: May 5, 2017)

CX - Assessee procured steel plates and set of connectors by way of importation at nilrate of Customs duty under Notfn 21/2002-Cus for manufacture of Steel Pipes to makesupply to ONGC Ltd. for offshore oil exploration or exploitation - Steel scrap generatedduring manufacturing was cleared on payment of Customs duty, in terms of Sub-section 2 (a) of Section 65 of Customs Act, 1962 - Three separate SCNs were issued,demanding differential duty for short levy, as assessee had paid CX duty on theirfinished products, whereas revenue felt that assessee should have paid Customs dutyand not CX duty - In view of findings of Commissioner (A) which is in conformity withview expressed by Board vide clarification dated 9th May, 2006, assessee have rightlypaid CX duty on finished products and have rightly paid Customs duty on waste andscrap generated in course of manufacture, cleared in DTA: CESTAT - Revenue's appealdismissed: ALLAHABAD CESTAT


India Pesticides Ltd India Vs CCE & ST (Dated: February 16, 2017)

CX - Assessee is a manufacturer of pesticides and chemicals and are having twomanufacturing units, separated by road, called as unit I and unit II - Their products,manufacture of which is being undertaken in both units are separated by a public road- Intermediate products of unit I are transferred to unit II under job work challan formanufacture of final products and also for repacking - For manufacturing process,chilled water used in unit II is supplied from unit I through overhead pipeline - Labourengaged in two units as well as administration of two units have been found to becommon - Plausible explanation given by assessee at the time of inspection that goodsthough recorded in RG-I register of unit I were found in unit II due to shortage ofspace in unit I and due to monsoon season, have not been found to be untrue - Thereis no clandestine activity found by Revenue calling for punitive measures: CESTAT


Hewlett Packard India Sales Pvt Ltd Vs CCE (Dated: May 3, 2017)

Central Excise - Valuation - appellant is engaged in the manufacture of personalcomputers commenced in April, 1998 - The dispute pertains to the material periodApril 1998 to July 1999 when the appellant was clearing their final products onpayment of duty to their depot at Navi Mumbai for onward sale to the wholesaledealers - Revenue investigated the transactions on reasonable belief that the appellanthas resorted to undervaluation of their goods by paying duty on a lesser price whencompared to selling price at their Mumbai depot - demands (differential duty, interestand penalty) were adjudicated and agitated before the Tribunal, who remanded thecase for de novo decision to the adjudicating authority, in Final order No.1196/2004 dt.06/07/2004 - The demands were re-confirmed in denovo proceedings, culminating inthe instant appeal.

Held: Out of the total demand as per show-cause notice amounting to Rs.37,22,585/-,the appellant is seriously disputing an amount of Rs.14,61,527/- which is attributableto the invoices where the date of depot invoices taken by the Department issubsequent to the date of clearances - In terms of the statutory provisions fordetermining of assessable value prevailing at the relevant time, in cases where goodsare cleared on payment of duty from the factory to the depot for subsequent sale towholesale dealers, the assessable value is to be reckoned on the basis of the priceprevalent at the depot at the time nearest to the time of removal of goods from thefactory - In respect of several clearances made from the factory, the Department hasfound that there are no corresponding invoices issued from the depot for such goodsas are being cleared from the factory, on or before such date of clearances from thefactory; and in such cases, they have adopted the price in terms of depot invoices ondates subsequent to the date of clearance from the factory, by claiming that theseclearances have taken place at the time nearest to the time of removal - This is notcontemplated under the valuation provisions - only those depot invoices can beconsidered which have been issued on or before the date of clearance of goods fromthe factory; hence, the demand attributable to those invoices whose date taken by theDepartment is subsequent to the date of clearance from the factory cannot besustained; the same is set aside. [Para 7]

The adjudicating authority in the impugned order has discussed the contentions of theappellant and recorded a finding that while submitting the details of depot invoiceswhere refund was admissible, they have concealed the details of clearances in respectof which depot price sale was higher than the stock transfer value; holding that theappellant has failed to mention the fact that they were adopting the price listed in theirwebsite and the fact came to the notice only when the Departmental officers visitedthe factory and carried out investigations - the demand does not merit setting aside onthe ground of time bar - the appellant had filed a refund claim separately in respect ofexcess payment made by them, which would have been considered and settled inseparate proceedings - Consequently, no orders passed herein, on the contention thatthey will be entitled to adjustment of amount paid in excess towards the amount shortpaid - Appellant commenced manufacturing activity in April 1998; and the pattern ofpayment of duty in respect of goods cleared on stock transfer basis to the depotsunderwent a substantial change w.e.f. 1996, when the depot was defined as a

separate place of removal - The relevant valuation rule was also amended and theBoard issued clarificatory Circular dt. 14/10/1996; in spite of which, the pattern ofpayment of duty on such depot clearances were in a state of flux for considerableamount of time - The controversy in the present case is pertaining to the periodimmediately after commencement of manufacture by the appellant in their Bangalorefactory; no justification for imposition of penalty, which is set aside [Para 8-10]


CCE & ST Vs Gokul Foods Pvt Ltd (Dated: December 14, 2016)

Central Excise – CENVAT Credit – appellant is engaged in manufacture of Glucosebiscuits and Cream biscuits - Revenue observed that during the material period theassessee had received new-plant and machinery for installing Indirect Oil Oven -Certain parts of oven and other machines were purchased and bought from othermanufacturers for using the same in the said oven; the assessee also received a D.G.set and after machinery and parts thereof, for installing the new oven; and appellantavailed capital goods credit - Revenue viewed that the impugned credit wasinadmissible, disallowing the same in adjudication, demanding recovery with interestand equal amount as penalty under Rule 15 (1) & (2) read with Section 11AC of theAct - Commissioner (Appeals) remanded the case to original authority observing thatutilised Cenvat Credit cannot and should not form part of the confirmed demand,culminating in Appeal No.E/3527/2010 - Pursuant to remand, a denovo order waspassed, re-confirming the demand - Commissioner (Appeals) granted relief from thedenovo order, culminating in the departmental appeal contending that the capitalgoods were actually installed/commissioned after the final products (biscuits) becameexempt; thereby were used exclusively in the manufacture of exempted goods, andhence the credit is not admissible in terms of Rule 6(4) of CCR, 2004 .

Held: Cenvat credit has to be determined on capital goods on the date of receipt that isas and when, the said goods are received in the factory of production along withevidence of duty paying documents as settled in earlier rulings by the Tribunal and theApex Court - Rule 6(4) of CCR, 2004 has two clauses; the first providing that "noCenvat Credit shall be allowed on capital goods, which are used exclusively in themanufacture of exempted goods or in providing exempted services"; and in the secondclause that "other than the final products, which are exempt from the whole of theduty of Excise leviable thereon under any notification when exemption is granted basedupon the value or quantity of clearance, made in a financial year" - Rule 6(4) does notdebar taking of Cenvat Credit on capital goods, which are used in the manufacture offinal products, although taxable, but exempt from the whole of duty of Excise underany notification when exemption is granted, based upon the value or quantity ofclearances - In the instant case, biscuits are normally taxable under the tariff but havebeen exempt vide notification No.22/2007-CE dated 03.05.2007 with respect to thevalue of the product and/or MRP; the assessee falls in the second clause of Rule 6(4),which provides an exception, and as such, the credit is available on capital goods, foroutput, which are normally taxable but exempt under notification – Appellant rightlyentitled to the impugned credit – Assessee's appeal allowed with consequential reliefand departmental appeal dismissed. [Para 8]


Mahima Tex Tech Pvt Ltd Vs CCE (Dated: March 22, 2017)

Central Excise – SSI Exemption - the appellant was manufacturing branded goods andthey were claiming SSI exemption - The same was denied by the lower authorities onthe ground that the benefit of Section 4 (c) of Notification No.8/2003-CE dated01.03.2003 was not available, culminating in the instant appeal.

Held: As per the living certificate, if a person is alive, certainly he was alive three years

back - Similarly, when the area in the year 1999, was the rural area, certainly, thesame was the rural area in earlier period too - In the past, it was neither urban norspecial area under the scheme; showing that the lower authority has not decided theissue by applying mind independently - the impugned order is set aside and the matteris remanded to the lower authority to decide the issue denovo in the light of the abovediscussions but by providing the reasonable opportunity to the assessee and admittingevidences, if need be, as per law. [Para 5, 6]


CCE & ST Vs Oudh Sugar Mills Ltd (Dated: December 15, 2016)

CX - Assessee is having composite unit comprising of sugar mill and distillery division -They undertake manufacture of Sugar and Molasses in Sugar Mill and Molasses arefurther utilized in distillery division for manufacturer of ethyl alcohol through process offermentation - SCN contends that rectified spirit is manufactured in between theprocess to manufacture denatured spirit and rectified spirit does not find place inCentral Excise Tariff w.e.f. 01.03.2005 and therefore CENVAT credit is not admissibleas inputs & input services and capital goods going into manufacture of rectified spiritand hence going into manufacture of denatured spirit - Before 01.03.2005, departmentaccepted that rectified spirit is covered under CSH 2204.90 - CSH 2204.90 covers ethylalcohol except one for human consumption and which are undenatured - Therefore,issue to be decided is whether ethyl alcohol and rectified spirit are two differentcommodities or one and the same commodity - In view of observation of SupremeCourt, ethyl alcohol and rectified spirit are one and the same - Therefore, rectifiedspirit which is not used for human consumption is nothing but ethyl alcohol and isfinding place in tariff item no. 22072000 - Thus, SCN is not sustainable: CESTAT


Needle Industries India Pvt Ltd Vs CCE (Dated: April 21, 2016)

CX - Issue relates to dutiability of " Gold Potassium Cyanide Solution " emerging as anintermediate product and consumed by assessee captively for manufacture of GoldEyed Handle Sewing Needle - Literature submitted by revenue pertains only to solidcrystalline form of Gold Potassium Cyanide - What is manufactured by assessee isevidently Gold Potassium Cyanide Solution and not Gold Potassium Cyanide crystallinepowder - Even at this point, it has not been established by Revenue as to marketabilityof Gold Potassium Cyanide Solution manufactured by assessee - Impugned product,therefore, fails to satisfy the twin tests namely process constituting manufacturing andmarketability, as laid down by Apex Court in landmark judgment Board of Trustees2007-TIOL-178-SC-CX - Product in question is definitely not marketable and thereforecannot be charged to duty: CESTAT


Mankapur Chini Mills Ltd Vs CCE & ST (Dated: April 26, 2017)

CX - Assessee have a composite unit where sugar and molasses are manufactured -Further molasses on fermentation in distillery, ethyl alcohol is obtained - Ethyl alcoholis denatured by mixing certain chemicals which make ethyl alcohol unfit for humanconsumption - SCN contends that rectified spirit is manufactured in between theprocess to manufacture denatured spirit and rectified spirit does not find place inCentral Excise Tariff w.e.f 01.03.2005 and therefore CENVAT credit is not admissible asinputs & input services and capital goods going into manufacture of rectified spirit andhence going into manufacture of denatured spirit - Before 01.03.2005, departmentaccepted that rectified spirit is covered under chapter Sub Heading No.2204.90 - Ethylalcohol and rectified spirit are one and the same - Rectified spirit which is not used forhuman consumption is nothing but ethyl alcohol and is finding place in tariff item no.2207- 2000 - SCNs are not sustainable: CESTAT


Motherson Automotive Technologies and Engineering Ltd Vs CCE (Dated:January 30, 2017)

Central Excise – Remission of duty - the appellant was engaged in the manufacture ofplastic moulded components for T.V., Washing Machines and Automobiles and wereavailing credit of the duty on inputs and capital goods - A major fire accident tookplace in the factory premises and the appellant informed Revenue regarding theaccident; filed application for remission on semi finished goods, finished goods andcapital goods which were destroyed; praying for remission with respect to the Exciseduty payable on the loss of finished goods completely destroyed in the fire - theapplication was rejected under Rule 21 of Central Excise Rules, 2002 observing thatfrom the examination of the case records it reveals that the fire broke out in thefactory at 19:50 Hrs. on 20th May, 2007 whereas the appellant informed the fireDepartment at 20:31 Hrs. on the same date after a considerable lapse of 41 minutes,showing serious negligence; that the appellant have not complied with the mandatorysafety norms, like as in case of "driving a vehicle on road without brakes"; that theappellant have not arranged for verification of stock of destroyed goods by the properofficer within 48 hours of accident; that such loss of goods cannot be considered onaccount of natural causes or unavoidable accident; and that the remission claimmerited rejection on the basis of the Tribunal ruling in the case of M/s DharmpalSatyatpal Ltd.; culminating in A.No.E/217/2009 – Meanwhile, Revenue issued a showcause notice proposing duty demand on the finished goods and on the work inprogress apart from a proposal for denial / recovery of Cenvat credit involved oncapital goods destroyed in fire, under Rule 14 of CCR, 2004 along with interest - Thesaid SCN was adjudicated wherein the impugned credit was denied, and confirmed tobe recovered along with interest on the ground that Rule 3(5C) of the Cenvat CreditRules 2004 applied; culminating in A.No.52159/2015-EX(DB).

Held: In A.No.E/217/2009, the adjudicating authority recorded unsubstantiatedfindings, not based on evidences on record, and misinterpreted the fire departmentreport - there is no negligence on the part of the appellants in the incident of fire whichwas beyond their control and there is also no case of negligence made out on the partof the appellants in mitigating the loss - it is the fire Department which is the authorityto conclusively decide the reasons for the fire and also if there was any negligence onthe part of the manufacturer assessee in compliance with any safety standards orconditions of consent to operate - the rejection of remission claim is bad; the appellantis entitled to the remission claim; and the impugned order is set aside. [Para 7]

In 52159/2015-EX[DB] the introduction of Sub-rule (5C) in Rule 3 of Cenvat CreditRules, 2004 has been brought about much after the incident of fire and as such thesaid amendment/provisions are not applicable in the facts of this case - as regardswork in progress the observations of adjudicating authority and reliance on the saidcircular is contrary to the Supreme Court ruling in the case of Indchem Electronics andthe impugned order is set aside - as regards capital goods as per Rule 3(5A) thedemand of Cenvat credit by way of reversal on the capital goods arises only in case ofremoval of such capital goods; there being no removal of such capital goods thedemand is fit to be set aside on this score also. [Para 10]


Cheema Papers Ltd Vs CCE (Dated: May 16, 2017)

CX – Cenvat credit availed on capital goods ordered to be recovered on account of thefact that such capital goods were utilized in the manufacture of fully exempted finishedproducts – appeal to CESTAT. HELD:Appellants procured various capital goods andavailed the cenvat credit during the period April 2002 to July 2003 - at the time ofprocurement of the capital goods, the appellants were manufacturing and clearing thefinished products on payment of duty -consequently, the cenvat credit on capital goodsis allowable during the said period -the fact that from a subsequent date i.e. 7.8.2003,the appellants opted for and started availing area base exemption will not disentitlethem to the cenvat credit already availed -impugned order set aside and appealallowed : CESTAT [para 6, 7]


Gola Steel And Castings Pvt Ltd Vs CCE (Dated: May 25, 2017)

CX -Valuation - From the definition of related person as defined under section 4(3)(b)of the CEA, 1944, the appellant and the firm Raj Iron Foundry are not relatives, onebeing a limited company registered under the Companies Act and the other being apartnership firm - insofar as the issue of interconnected undertakings is concerned,there is no such allegation nor any fact is on record that the two partners of the saidRaj Iron Foundry, hold directly or indirectly, not less than 50% of the shares, whetherpreference or equity, of the appellant company or exercise control, directly orindirectly, whether as Director or otherwise over the body corporate, as defined undersection 2(g) of MRTP Act, 1969 as made applicable to the definition of "relatedpersons? under the CEA - in the SCN, as per the facts brought on record by therevenue and the allegations made, neither the allegation of related person issustainable nor the allegation of interconnected undertakings - in absence of anyfinding of flow back, the element associated with persons having interest, directly orindirectly in the business of each other is also not established -impugned order setaside, appeal allowed : CESTAT [para 7]



CX -Appellant, in its captive mines, employ several Heavy Earth Moving Machines[HEMM] for mining and procurement of ore, which is further used as a raw material bythe appellant - cenvat credit is available on HEMM as capital goods - for better upkeepand maintenance of HEMM, the appellants were availing the services of maintenance oftyres and availing cenvat credit of ST paid - whether credit is admissible. HELD: It isan admitted fact that such HEMM were used for mining and procurement of ore whichwas further used/subjected to process of benefication, for obtaining the dutiable metal,being zinc, etc. - accordingly, the said input service qualifies for credit under rule 2(l)of the CCR, 2004 -appeal allowed: CESTAT [para 7]


Spentex Industries Ltd Vs CCE (Dated: May 19, 2017)

CX –Whether time limit prescribed in section 11B of the CEA, 1944 would be applicablefor refund of accumulated cenvat credit u/r 5 of the CCR, 2004. HELD: In exercise ofthe powers conferred by rule 5, the Central Government, vide notification no.5/2006-C.E. (N.T.) has prescribed the conditions/limitations for claiming refund of ST tax by amanufacturer - since the notification clearly prescribes that for claiming refund ofcenvat credit the application has to be filed within the stipulated time prescribed u/s11B of the Act, the refund claim filed beyond such specified time limit is barred bylimitation of time–no infirmity found in impugned order – appeal dismissed: CESTAT[para 7, 8, 9, 12]


Shree Cement Ltd Vs CCE (Dated: April 19, 2017)

CX - Assessee engaged in the manufacture of cement and clinker, and has severalunits - Assessee installed Captive Power Plants (CPP) at some of its units - Powergenerated from a CPP was used in running the unit where CPP was installed, andexcess power generated was transferred to the other units, through a central electricalgrid - Revenue sought reversal of credit availed on inputs/input services utilised bythose units which had a CPP installed and were transferring power - Duty demand withinterest & penaty imposed - However, benefit was allowed to assessee w.r.t. certainperiods - Assessee claims the benefits that were disallowed - Held - Issue no longer resintegra and was resolved by the Tribunal in an earlier case involving the sameassessee - Following such precedent, credit of inputs/input services proportionate tothe power transferred, need not be reversed: CESTAT (Para 1,5,6)


Gemini Edibles And Fats India Pvt Ltd Vs CCE & ST (Dated: May 5, 2017)

CX - Assessee engaged in manufacture of edible refined vegetable oils and procuredHR plates on which duty was discharged and consumed said HR plates in factorypremises for fabrication of storage tanks for storing crude oil; fabrication wasundertaken in factory premises and tanks are used for storing of said crude oils infactory premises - Case of Revenue is that fabricated storage tanks will not amount toexcisable goods and inputs i.e. HR plates cannot be considered as inputs or as capitalgoods for benefit of Cenvat credit - Denial of Cenvat credit of central excise duty paidon such HR plates is incorrect proposition as has been held by High Court of Karnatakain case of SLR Steels Ltd - 2011-TIOL-892-HC-KAR-CX


Gerb Vibration Control Systems Pvt Ltd Vs CCE, C & ST (Dated: May 8, 2017)

CX - Assessee were availing benefit of Notfn 6/2000-CE and cleared vibrationinsolation systems without payment of duty to their customers M/s. Roshni Power TechLtd. which has been granted license from Non-Conventional Energy DevelopmentCorporation of Andhra Pradesh to set up six megawatt biomass based power project -Revenue sought to disallow the benefit claimed under said Notfn - Adjudicatingauthority set aside the demand whereas Commissioner (A) held the view that CX dutyis payable on said goods - A plain reading of item 21 indicates that exemption isavailable only for captive consumption - Since goods manufactured in assessee factoryhave been supplied to M/s. Roshni Power Tech Ltd., assessee is not entitled to benefitunder said notfn - Impugned order is upheld and appeal is dismissed: CESTAT


Shri Hanuman Loha Pvt Ltd Vs CCE (Dated: April 21, 2017)

Central Excise - Demand - Main assessee-appellant firm [Ghankun Steels Pvt Ltd] isengaged in the manufacture of sponge iron and MS ingots; and a search wasconducted in the factory premises when certain incriminating records/documentsreferred to as loading slips/weighment slips etc. were resumed - On the basis of theloose sheets, a demand was raised on alleged clearance of sponge iron withoutpayment of duty during the material period; and a demand of duty was raised allegingclandestine removal of MS ingots; on the ground that the consumption of power was inexcess of the norm of 830 units (Kwh)/PMT - Duty demand with interest and penaltieson the firms and individual adjudicated, and are agitated herein.

Held: Department’s case is mainly based on the incriminating documents andevidences available in the form of loose slips; supported by confessional statements ofthe transporter, Chief Executive officer and authorised signatory , who have admittedthe authenticity of the concerned incriminating documents and private records - Therecord maintained by transporter and resumed by the investigating officers contain allthe details identifying despatches of sponge iron and MS ingot by the assessee; onreconciliation found consistent with the sales details the assessee - The assessee doesnot dispute the recovery of the documents from the premises of Purwanchal RoadCarriers; there is no scope to interfere with the corresponding demand which issustained along with interest and equivalent penalty - main basis of the confirmation ofdemand of 5.35 Cr is consumption of electricity - appellant has given varioussubmissions in this regard which are on record; but have not been thoroughlyexamined by the adjudicating authority before sustaining the demand - Hence, thematter is remanded to original adjudicating authority, who shall examine all theevidence on record and give fresh opportunity of personal hearing to the appellantsbefore arriving at the decision - As the main demand is being remanded, the personalpenalties on the individuals are set aside and all matters are remanded back to theoriginal adjudicating authority for fresh examination and decision after extending fresh

opportunity of personal hearing. [Para 7, 8, 9]


Liberty Shoes Ltd Vs CCE (Dated: April 12, 2017)

CX - Assessee engaged in manufacturing of footwear - Revenue alleged that assesseeas per section 5A (1A) of the Act, was not duty bound to pay duty under Notfn.No.6/02-CE 02, Notfn. No.5/06-CE and assessee wrongly availed the credit for whichhe was not entitled to avail also assessee was liable to pay 10% of duty on price ofexempted footwear manufactured by assessee under Rule 6 ibid as the assessee failedto maintain records of inputs and input services used in exempted and excisablegoods.

Member Juridical Held - The exemption granted under the Notfn. No.6/02-CE 02 andNotfn. No.5/06-CE imposed certain conditions to avail the exemption and amanufacturer will not have an option to pay duty only where the goods were exemptedand the exemption granted was absolute whereas over here there were certainconditions too which was to be followed to avail the benefit therefore, the benefit ofNotfn. was optional and the assessee was not entitled to avail the benefit of Notfn. inthat circumstance it cannot be said that the goods were exempted goods which meansassessee correctly paid the duty on the said goods and Cenvat credit cannot be denied- Regarding the 10 % duty assessee mentioned that the activity of packing/repackingand labeling/re-labeling of the goods was not done in the separate godown and onpacking material the assessee had not taken the credit - The invoices had beenproduced to that extent for verification - Further, the proportionate credit availed oncommon input services had already been reversed by the assessee and assessee hadnot taken the credit on inputs i.e. packing material used in the manufacture ofexempted final goods and therefore the assessee was not liable to pay 10% of thevalue of the exempted goods.

Member Technical Held - Member Technical completely acknowledge and agree withthe findings of Member Judicial regarding the first issue however regarding the secondissue the fact that assessee had not manufactured exempted and dutiable goods in thesame premises was not proved by the statement of assessee's manager who was alsoan authorized signatory - He mentioned that all the functions related to importedfootwear including receipt and dispatches were carried out on behalf of assessee atregistered premises as well as in godown - Since, assessee admitted that they haveavailed credit on input services commonly used by them for manufacture of dutiablefootwear and exempted footwear and no separate account was maintained by them asit was the requirement of Rule 6(2) of CCR, 2004 therefore, assessee was required topay at the rate of 10% of the sale price of the exempted goods along with educationcess and interest - As assessee suppressed the materials and records therefore byconsidering the case of Rathi Steel & Power Ltd. penalty imposed was held justified -Further mentioned that matter remanded back to the adjudication authority tocalculate the amount by reconsidering the records again as amount figure not cameout separately for inputs from the record and were inaccurate to an extent: CESTAT


Nandan Steels And Power Ltd Vs CCE (Dated: April 7, 2017)

CX - Assessee engaged in manufacture of re-rolling of iron and steel - During theperiod June, 2009 to August 2009 he has manufactured structural items namely, MSangles, MS channels, joist which were used captive consumption in their factory forproduction of final product but without payment of excise duty claiming exemptionunder Notfn 67/95-CE - Benefit of notfn has been denied to assessee on the groundthat said items do not fall within definition of capital goods or components of capitalgoods or inputs - Aforesaid conclusion of Adjudicating authority as also Commissioner(A) is prima facie flawed for the reason that he has failed to appreciate that coalelevator, chamber separator and coal gasifier are essential component of productionunit of assessee - Undisputedly, goods in question have been used for said purpose as

such prima facie, it appears that goods have been used in relation to manufacture offinal product of assessee - When details submitted by assessee was not examined byCommissioner, matter needs fresh adjudication: CESTAT


Resil Chemicals Pvt Ltd Vs CCE, C & ST (Dated: April 3, 2017)

CX - Assessee engaged in manufacture of excisable goods namely chemicals and areoperating under CCR, 2004 - It is alleged that assessee had wrongly availed cenvatcredit on ineligible capital goods namely Laptop & on the basis of invoices/bills of entrynot addressed to their unit - Assessee has two factories which are referred to as Unit-1and Unit-2 - Cenvat credit on invoices in name of Unit-2 were taken by Unit-1 ofassessee factory - Unit-2 was eligible to take Cenvat credit on these inputs andremoved the same inputs 'as such' to Unit-1 in excise invoices by reversing Cenvatcredit and Unit-1 was eligible to take Cenvat credit on such invoices - When the goodsare transferred from one factory to the other factory of the same company then thereis no sale of the goods and in such a situation if the goods are transferred by makingendorsements in invoices then such invoices can be taken as valid documents fortaking modvat credit: CESTAT


Siddharth Papers Ltd Vs CCE (Dated: March 8, 2017)

Central Excise – Assessee were engaged in the manufacture of Kraft Paper andenjoyed the exemption under Notification No. 49/2003 vide which the goods wereexempted from whole of the duty of excise or additional duty of excise fi they weremanufactured in the new units located in the Uttarakhand for the period of 10 years –the exemption was denied – hence, assesse filed an appeal and department filed anappeal related to the refund of the claim which was deposited prior to the passing ofthe order-in-original, but claimed later.

Held: The same issue has come up before this Tribunal in the case of The GeneralManager, Century Pulp & Paper vs CCE, = 2017-TIOL-1266-CESTAT-DEL , followingthe same, the impugned order is set aside and regarding the departmental appeal, asthe assessee-Appellants are entitled for the reversal of the Cenvat Credit, no merit inthe appeals filed by the Department - Hence, both the appeals filed by the Departmentare dismissed – (Para 6-8)


India Pesticides Ltd Vs CCE (Dated: March 3, 2017)

Central Excise - Returned goods - appellants were engaged in manufacture ofTechnical Grade Pesticides & Chemicals - During a departmental intervention, it wasobserved that during Financial Year 2006-07, the appellants had received back variousconsignments of duty paid goods returned from their depots as well as buyers underRule 16 of Central Excise Rules, 2002 on which credit was availed - Revenue viewedthat no reason was recorded for receipt of such goods as required under Rule 16 ofCentral Excise Rules, 2002 and that such goods could not be further used for beingremade; and therefore such availment of Cenvat credit was not admissible - Denial ofcredit, demand for its recovery with interest and penalty adjudicated, upheld byCommissioner (Appeals), and agitated herein.

Held: There is force in the appellant's contention that there is no such requirementunder sub-rule (1) of Rule 16 of Central Excise Rules, 2002 that the reason as to whysuch goods are brought into the factory has to be recorded - the manufacturer has tomerely maintain the record of receipt of such goods under Sub-rule (1) of Rule 16 ofCentral Excise Rules, 2002; this condition stands fulfilled inasmuch as the Show CauseNotice was based on such record - the goods manufactured by the manufacturer andremoved on payment of duty when brought back into the factory as provided under

Sub-rule (1) of Rule 16 of Central Excise Rules, 2002 for being remade, refine,reconditioned or for any other reason; whether they are capable of being reused ornot, cannot be ground for issue of Show Cause Notice - impugned order set aside withconsequential relief, if any. [Para 3, 5]


CCE Vs Kanoria Sugar And Genl Manufacturing Company Ltd (Dated: March 30,2016)

Central Excise - CENVAT Credit on outward freight - In view of the fact that theownership / title of the goods was passed on by the respondent at its buyer's end, theservice tax paid on freight charges should be allowed for cenvat benefit. No infirmity inthe impugned order and accordingly, the appeal filed by the Revenue is dismissed.(para 3)


Kluber Lubrication India Pvt Ltd Vs CCE, C (Dated: April 24, 2017)

CX - Assessee engaged in manufacturing of excisable goods - Revenue alleged thatassessee by suppressing the material facts took Cenvat credit on higher amount byshowing more value of raw material however paid less amount in comparison to whathad declared earlier - SCN was issued demanding duty with interest and imposedpenalty - After going through evidences and material facts placed on record thatallegation of suppression was not held good reason being the provision relating toreversal of credit was introduced for the first time in Cenvat Credit Rules by insertionof Rule 3(5B) w.e.f. 11.05.2007 vide Notfn 26/2007-CE-NT and on top of that thedemand was raised on basis of information available in Trial Balance Sheet which wasnoticed during audit after a long time however under Rule 3 of CCR there was norecovery mechanism for prior period and by considering the cases of Sri Eswari AutoComponents Pvt. Ltd. 2015-TIOL-1975-CESTAT-MAD and Eternit Everest Ltd. 2003-TIOL-11-HC-MAD-CX the demand was not sustainable and its barred by the limitation:CESTAT


CCE Vs Himachal Wire Industries Pvt Ltd (Dated: December 19, 2016)

CX - Both the assessees engaged in manufacture of Steel Wires, Barbed Wire andGalvanized Wire and availing Cenvat Credit of duty paid on inputs used in or in relationto manufacture of their final product - Being located in state of H.P., assesseeexpanded their installed capacity to the extent of 25% and opted for Notfn 50/2003-CE- However, after opting for said Notfn, they were directed not to take any cenvat creditsince the clearances effected under said notfn are not required to pay any duty,therefore, they are not entitled to take any credit - Contention of assessee that goodsmanufactured by them are not specifically exempted is completely erroneous - Sincethe final products manufactured by assessee are specified in notfn and same is clearedfrom unit located in specified zone, goods manufactured by them are exempted goods- Since the only final product manufactured by assessee are held to be exemptedgoods, the benefit of Cenvat Credit is not eligible in terms of Rule 6(1) of CCR, 2004 -Impugned order set aside: CESTAT


Fertilizers And Chemicals Travancore Ltd Vs CCE, C & ST (Dated: April 7,2017)

CX - Assessee, a public sector undertaking engaged in manufacture of NP 20:20(fertilizer) which is cleared at Nil rate of duty availing exemption under notfn 04/2006-CE as amended - They are also clearing a by-product viz. Phospho Gypsum onpayment of excise - It was alleged that assessee availed Cenvat credit of on the basis

of photocopies of invoices and some invoices were not in their name - CENVAT credittaken on basis of photocopy is not permissible in view of judgement in Century Rayon2014-TIOL-1165-CESTAT-MUM - Further, assessee has taken CENVAT credit on basisof invoices which are not addressed to it and are addressed to its sister concern whichis only a technical lapse and rejection of CENVAT credit on this ground is not legallyjustified: CESTAT


Himanshu Pharmaceuticals Pvt Ltd Vs CCE, C & ST (Dated: March 14, 2017)

CX - Assessee engaged in manufacture of pharmaceutical formulation - It was noticedthat assessee have availed irregular cenvat credit on basis of credit notes issued bythem to their stockiest/distributors which is not a document specified in Rule 7/9 ofCCR, 2002/2004 for availing cenvat credit - Department has not been able to establishany positive act on part of assessee to suppress the material fact - Further, assesseehas disclosed availment of cenvat credit on basis of credit notes in their returns andalso in Annexure and Department is very well aware of same and Department neverraised any objection - Therefore, entire demand is time-barred and thereforeimpugned order is not sustainable in law and the same is set aside: CESTAT


Amrit Food Vs CCE (Dated: March 16, 2017)

CX - Assessee, manufacturer of Dairy products, including Milk Shake Mix (MSM), SoftServe Mix (SSM), Coffee Cream and Cream packed, among others, is in appeal againstimpugned order whereby Commissioner have confirmed classification of products inquestion under Sub Heading 1901.19 of CETA as food preparation of goods of headingNo.4.01 to 04.04 of tariff, rejecting the classification adopted by assessee in SubHeading 04.04 - Issue is no longer res-Integra and same issue between same partieshave travelled earlier to the apex Court, whereby apex court had remanded the matterto this Tribunal and pursuant to said remand, a coordinate Bench of this Tribunal videFinal Order dated 29th March, 2006, in respect of these very products, have held thatproducts of assessee in question, are classifiable under Heading 04.04 only - Beingaggrieved, Revenue preferred appeal before Supreme Court and vide Final Order dated03.09.2015, apex court have upheld the classification as held by this Tribunal andrejected the appeal of Revenue - Following the order of Supreme Court in assessee'sown case, classification of products in question will be under the Chapter Sub-heading0404.90: CESTAT


Anmol Solvex Pvt Ltd Vs CCE (Dated: October 16, 2016)

Central Excise - Classification - Appellant engaged in manufacture of OrganicComposite Solvent - On Verification by the Department, it was found that the productsmanufactured by the appellant was in consonance with Motor Gasoline from thecorresponding percentage recovery as found recorded in their Laboratory TestingRegisters - SCN issued on the basis that the resultant product is correctly classifiableunder Chapter Heading 2710.13 attracting Central Excise duty BED= 16%+SED 16%instead of Chapter 3814.00 being classified by the party - Adjudicating authorityconfirmed the same along with interest and penalty - Hence, the appeal.

Issue: Whether the product manufactured by the appellants namely Organic CompositeSolvents is classifiable under chapter sub heading 2710.13.

Held: Onus of proving that the product in question falls within the definition of MotorSpirit classifiable under aforesaid sub heading is on the Revenue - The entire case ofthe department is based on the test result recorded in the laboratory testing register ofthe appellants - In the absence of a proper test report done by the department, the

reliance placed on the other evidence does not lead to the conclusion that impugnedgoods are Motor Spirit - Definition prescribes that the flash point should be below 25Degree Celsius, but reports relied upon by department do not indicate flash point, onlymention boiling point - The criteria that the Hydro Carbon Oil should be suitable for useeither by itself or in admixture with any other fuel in Spark Ignition Engine is notmentioned in the test report - In the absence of a proper chemical analysis done bythe department to establish the required criteria, other adduced evidence does notsupport the case of the department - In the case of Kuchchal Chemicals Ltd., at leastthe department had got the product tested once and the Tribunal felt that theDepartment should have got the product tested further to establish the third criteriawhereas in this case, the product was never tested by the department - Hence, orderpassed by commissioner is set aside and appeal is allowed - (Para 6, & 7).


Kirloskar Pneumatic Company Ltd Vs CCE (Dated: March 30, 2017)

CX - Assessee cleared the goods after availing exemption under Notfn 64/95-CE and10/97-CE for period 1997 to February 2002 - As per amendment in FA, 2005, assesseewas required to pay 8% of value of exempted goods or reversed the same - Same wasnot done, therefore, demand was confirmed to the extent that an amount equivalent to8% of goods cleared under above said notfn alongwith interest and imposed penalty -Assessee has not contested the liability of amount of 8% of the value of exemptedgoods and only contesting the payment of interest and imposition of penalty - Byfollowing president judicial pronouncement in Star India Pvt. Ltd. 2005-TIOL-163-SC-ST-LB , interest is not chargeable from assessee - Penalty also not imposable onassessee: CESTAT


TVS Motor Company Ltd Vs CCE (Dated: April 21, 2017)

CX - Assessee engaged in manufacturing of two wheelers and export of motorcyclespare parts - Assessee sought Cenvat credit refund on ST paid for the courier serviceas assessee exported parts to its client under the free replacement warranty - Revenuedenied the refund sought on the ground that assessee not fulfilled the mandatoryconditions under the Notfn No. 52/2011-ST and further assessee not produced anyevidence that they exported parts under the free replacement warranty -Held- Byconsidering the evidences placed on records by the assessee it was proved beyond thedoubt that assessee exported the spare parts due to the free replacement warranty asper the contract - Since, assessee exported goods under the free warrantyreplacement and department's view was that the bank realization certificate had notbeen produced by assessee was not a justified ground for denial of refund as nomonetary consideration was received from the buyer - Therefore, impugned order set-aside :CESTAT


Schneider Electric Conzerv India Pvt Ltd Vs CCE, C & ST (Dated: March 31,2017)

CX - Assessee engaged in the manufacture of digital panel meters & energy meters -Revenue alleged that assessee availed Cenvat credit on various services such as Airticket booking, AMC services for HRIS, Software, PC, AC, UPS batteries, DataProjectors and Catering Services, Courier Services, Freight Charges on Sales, HouseKeeping/Installation of FHCS & Snake Management Service and Interior designservices by wrongly considering them as input services - Demand was raised onassessee for which Original Authority confirmed partial demand - Upon appeal alongwith the stay order application against the partial demand Commr. directed assesseeto pre-deposit certain amount then assessee sought modification of stay order whichwas denied - Adjudicating authority rejected the appeal for non-compliance with pre-deposit amount - Held - Since, most of the alleged services were considered inputservices in assessee's own case earlier decided by the same Tribunal however matter

remanded back to the original authority to decide the appeal on merits withoutinsisting for the pre-deposit - Impugned order set-aside: CESTAT


Apollo Tyres Ltd Vs CCE, C & ST (Dated: March 7, 2017)

CX - Assessee engaged in manufacture of automobile tyres which are supplied by bothas Original Equipment (OEM) to automobile manufacturers as well as for ReplacementMarket(RM) - They procures from outside the flaps and tubes which are required to besupplied along with tyres manufactured by them - Dispute is that CENVAT credit isinadmissible on duty paid on tubes and flaps since these are not in nature of inputs oraccessories - When same tubes and flaps are cleared, excise duties are already paid -It is only fair to consider such payments of excise duty at the time of clearance asamounting to reversal of credit even if considered as irregularly taken - From CAcertificate submitted by assessee, it is evident that almost entire credit taken standsreversed in process of clearing tubes and flaps - Such payments made can be countedtowards satisfying requirements of Section 35F of CEA, 1944 in terms of pre-deposit asa condition for hearing the appeal - Requirement of Section 35F is fully satisfied andthere will be no need for assessee to pay any further amounts of satisfy the mandatoryrequirements of Section 35F: CESTAT


Kanchan Processors Pvt Ltd Vs CCE & ST (Dated: March 30, 2017)

Central Excise – Demand – Kanchan Group of Companies are engaged in manufactureof processed man made fabrics - The Group consists of Kanchan Processors (P) Ltd,Kanchan Wooltex (P) Ltd and Kanchan Woollens (P) Ltd. - Based on the intelligence,the officers of the DGCEI (Directorate General of Central Excise Intelligence) searchedvarious premises, residence etc related to the Group - Consequent to the searches,processed fabric found physically was detained at Kanchan Processors (P) Ltd (KPPL)for further verification; processed fabrics was seized as no duty paying documentswere available for the said fabrics; and Fabrics of M/s Kanchan Wooltex were seizedfrom transporters - For the goods seized, separate SCNs ( Show Cause Notices) wereissued, which were adjudicated by Joint Commissioner – Separate SCN was issued fordemand of duty along with interest and imposition of equivalent penalties on the firmsand individuals and confirmed by Joint Commissioner which was agitated beforeCommissioner (Appeals), who remanded the matter to the Original adjudicatingauthority, who in turn re-confirmed the demands in the denovo order – When it wasagitated before Commissioner (Appeals) in the second round of litigation, he passedthe impugned OIA, agitated by the individuals and firms herein – The same OIA is alsoagitated by Revenue praying for restoration of OIO passed by Joint Commissioner.

Held: Commissioner (Appeals) has assiduously gone through the contents of thedocuments on record, analyzed the discrepancy and has given the benefit of doubtordering release of fabrics for the reasons recorded in the impugned OIA - It is onrecord that M/s Kanchan Processor Pvt. Ltd and Shri Nilesh Bangar did not challengethe seizure in respect of 24,637.96 mtrs of fabrics - The impugned order has reducedthe penalty imposed on M/s Kanchan Processors (P) Ltd, the assessee from Rs SixLakhs to Rs 2 lakhs and has set aside the penalty of Rs 3 lakhs imposed on Shri NileshBangar by the Original adjudicating authority - M/s Kanchan Processor Pvt Ltd. hasprayed that confiscation of goods and imposition of penalty and fine be set aside,whereas Revenue prays that Order-in-Appeal be set aside and Order-in-Original passedby Joint Commissioner be restored - However, after due consideration of facts and thesubmissions of both sides it appears that Commissioner (Appeals) has rightly reducedthe penalties on the assessee from Rs 6 lakhs to Rs 2 lakhs and rightly set aside thepenalty on Shri Nilesh Bangar, Director - these is no justification in the assessee'sprayer to do away with the confiscation of the goods and the redemption fine imposedin case of confiscations, when M/s Kanchan Processor Pvt Ltd is unable to explain non-accountal of the goods - There is also no justification in the prayer of the Revenue forsetting aside the findings and the decision arrived at by the Commissioner (Appeals) in

the impugned order. [Para 5, 6]

The whole case is based on evidences like private records stock verification, computerrecords etc which have been corroborated by respective statements of the transportersand purchasers of the goods, which have not been retracted by the concerned persons- The appellants have not been able to counter the documentary evidences andcorroborated statements, which support the Revenue's case and undoubtedly establishclandestine removal of the goods done without payment of duty of Central Excise -there is no scope to interfere with the confirmation of demand along with interest andimposition of equivalent penalty against Kanchan Processors Pvt Ltd - However, in theface of the fact that assessee has been imposed with the equivalent penalty and afterconsidering the totality of facts and circumstances and taking a lenient view, thepenalties imposed on the other appellants namely M/s Kanchan Wooltex Pvt Ltd, ShriJayesh Bangar and Shri Nilesh Bangar appear to be on higher side, meriting reductionto 20% of the demand confirmed against M/s Kanchan Processor Pvt Ltd, and in caseof Shri Jayesh Bangar and Shri Nilesh Bangar, penalties are reduced to 10% of thedemand confirmed and the impugned order dated 26.2.2009 is modified to aboveextent - In the result, the impugned Order-in-Appeal no. 252-253 dated 19.12.2008 issustained and the appeal (No. 810/2009) filed by M/s Kanchan Processors Pvt Ltd andthe appeal (No. 911/2009) filed by the Revenue are dismissed; further impugned orderdated 26.2.2009 modified to above effect and the appeal (No. 1399/2009) filed by M/sKanchan Processors is dismissed and the appeals filed by M/s Kanchan Wooltex Pvt Ltd(No. 1401/2009), Shri Jayesh Bangar (no. 1402/2009) and Shri Nilesh Bangar (No.1400/2009) are partly allowed in above terms. [Para 10-13]


Steel Authority of India Ltd Vs CCE & ST (Dated: May 31, 2017)

CX - Simultaneous proceedings against supplier and appellant - When duty demandagainst supplier is upheld only for the normal period of limitation, same benefit is to beextended to the appellant for the demand raised of CENVAT - Matter remanded to theAA for re-computation of demand: CESTAT [para 8, 9]



Texmo Pipes And Products Ltd Vs CCE & ST (Dated: May 22, 2017)

CX –Appellant is engaged in manufacture of PVC pipes – in a major fire accident on21.3.2001, large quantities of duty paid raw material on which credit had been availed,were destroyed – appellant reversed an amount of Rs.2.02 crore towards credit on lostraw material in August 2011 – SCN issued – credit reversed appropriated, penalty ofamount equal to credit imposed u/r 15(1) of CCR, 2004, recovery of interest ordered –appeal to CESTAT. HELD:There is no tenable or sustainable reason recorded in theimpugned order regarding imposition of penalty – no legal justification found forimposing equal amount of penalty in case of loss of duty paid inputs, due to fireaccident– neither the notice nor impugned order mentioned the amount of creditactually utilised towards discharge of duty of final product – interest liability will arisein case the appellant have utilised any portion of credit availed and available in theirbooks, attributable to the inputs lost in fire accident – this can be verified by thejurisdictional officer to ascertain the interest liability, if any – Penalty set aside –interest liability, if any, shall be in terms of above verification : CESTAT [para 5, 6, 7]


Surabh Tubes Pvt Ltd Vs CCE (Dated: May 24, 2017)

CX – Appellants, engaged in the manufacture of steel wires, cleared the same toM/s.Neminath Tubes – revenue of the view that the appellants and M/s.NeminathTubes are related persons – applying the provisions of rule 9 read with rule 11 of

Valuation Rules, 2000, differential duty confirmed & penalties imposed – appeal toCESTAT. HELD: SCN and the lower authorities proceeded to recover differential dutyonly on the ground that the appellants are "relative" of M/s.Neminath Tubes in termsof section 4 (3) (b) (ii) of the CEA – the said provision is applicable only if the partiesare "relative" as per section 2 (41) of the Companies Act, 1956 – a juristic person, likea private limited company, cannot be called as a "relative" of a partnership firm – thescope of term "relative" will apparently apply to only natural persons – on this groundalone, the proceedings against the appellant are unsustainable - impugned ordersuffers from serious legal infirmity and accordingly is set aside – appeal allowed :CESTAT [para 3]


P I Industries Ltd Vs CCE & ST (Dated: May 16, 2017)

CX -Appellant, received duty paid Pesticides back into their factory and availed CENVATcredit in terms of rule 16 of CER - Sincethe goods were time expired products in termsof Pesticides Rule 1971 and could not be put to reprocessing, the department opinedthat credit is not admissible - appellants reversed credit alongwith interest andintimated the Department - SCN issued and demand was confirmed along with interestand penalty u/s 11AC r/w rule 15 of CCR - appellant aggrieved by imposition ofpenalty, hence appeal to CESTAT. HELD:CENVAT credit availed on such goods havebeen duly entered in the records and formed part of the credit statement in the ER-1filed -in such situation, there can be no allegation of suppression or fraud in availingcredit- period of availment of irregular credit being longer than one year, by itself, willnot bar the closure of the proceedings -for the bar to operate, the ingredients ofproviso to section 11A (1) of the CEA should be found to be existing, which is missingin the present case - reversal of credit with interest upheld, no further proceedings arerequired - penalty set aside: CESTAT [para 4]


Indo Zinc Ltd Vs CCE (Dated: February 2, 2017)

CX - Assessee engaged in manufacturer of Brass Ingots and Copper Ingots - It isalleged that assessee was receiving cenvetable invoices for inputs and was wronglyavailing cenvat credit on strength of such invoices without actual receipt of inputagainst such duty paid documents - Authorized Signatory of assessee deposed thatfactory of assessee was closed since last 4-5 years and only trading activities are beingcarried from their Mumbai office - Further, owners of other vehicles had also deniedtransportation of goods to assessee's factory under cover of invoice - Since onus toprove transportation of goods from supplier's premises and receipt of same within thefactory for use in intended purpose have not been satisfactorily discharged, assesseedoes not make out any case against confirmation of adjudged demand by authoritiesbelow - No infirmity found in impugned order: CESTAT


Havells India Ltd Vs CCE & ST (Dated: May 29, 2017)

CX –During the course of verification of records, it was noticed by the Officers that inrespect of a few invoices the appellant while clearing the goods, under CETH 8535,have not followed the MRP based assessment in terms of Section 4A of the CEA, 1944– thereafter, appellant calculated differential duty on all such clearances and paid thedifferential duty along with interest – SCN issued – differential duty confirmed, penaltyequivalent to duty imposed u/s 11AC of the Act– appeal to CESTAT. HELD -Applicability of provisions of section 11A(2B) of the Act is the point of dispute – thereis no evidence on record to sustain the allegation of wilful mis-statement, fraud orintention to evade payment of duty -apparently, the longer period of short paymentalone was considered as reason enough for non-closure of case under section 11A(2B)- short payment spread over longer period by itself will not bar the closure of casewithout SCN -independently, the elements as mentioned in Explanation-1 to section11A(2B) are to be established for non-closure of cases under the said section - since

such element are not established in the present case, the proceedings should not havebeen initiated against the appellant - while upholding the payment of differential dutyalongwith interest by the appellant, the penal proceedings against the appellant arefound to be untenable -accordingly, the penalty imposed on the appellant are set aside: CESTAT [para 6, 7, 8]


Bharat Petroleum Corporation Ltd Vs CCE (Dated: May 16, 2017)

CX - Appellant received duty paid Aviation Turbine Fuel [ATF] from the refinery -during storage, the goods became unfit for supply as ATF and hence they were suitablydyed and cleared as Superior Kerosene Oil [SKO] by claiming exemption at nil rate ofduty in terms of notification no.4/2006-CE (sl. no.20) - the appellant sought refund ofthe duty paid originally at the time of clearance from the refinery - the same has beenrejected by the authorities below - appeal to CESTAT. HELD - Conversion of ATF intoSKO would amount to manufacture u/s 2(f) of the CEA, 1944 - however, since SKO forPDS enjoys exemption, no central excise duty was paid at the time of clearance fromthe appellant's premises -in terms of rule 5 of the CER, 2002, the rate of dutyapplicable to any excisable goods shall be as prevalent on the date when such goodsare removed from the factory or the warehouse -in the present case, at the time ofclearances from the appellant's premises no duty is payable -at the time of clearanceof ATF from the refinery, excise duty was payable which stand paid -refund of suchduty can be considered only if such goods are returned to the factory of the samemanufacturer or any other manufacturer - this condition prescribed in rule 16 of theCER is not applicable to the appellant since the goods i.e. ATF has not been returned tothe factory - further, since ATF has not been manufactured in the appellant's premises,rule 21 of the CER is not applicable to the appellant - refund of duty paid on the ATFcannot be considered in terms of rules 5, 16 or 21 of the CER - consequently, theBench has no option but to reject the appeal filed by the appellant and uphold theimpugned order : CESTAT [para 8, 9, 10]


J K Files and Tools Vs CCE (Dated: April 12, 2017)

CX - Rule 16 of CER permits availment of credit even if the activity does not amount tomanufacture - no illegality in appellant procuring duty paid ‘files' from other unit andexporting the same along with own manufactured ‘files' under bond/payment of dutyby availing CENVAT credit - if the department is of the view that appellant hasencashed credit by utilizing excess credit, then department should have taken actionfor denial of rebate claim - impugned order set aside and appeal allowed: CESTAT[para 5, 6]



Kaysons Cable Industries Vs CCE (Dated: April 26, 2017)

CX - Appellant seeks relief of deduction of additional sales tax from the assessablevalue paid under turnover tax law of the State to claim SSI benefit since deduction ofthis element shall reduce the value of its clearance. Held: Incidence of duty under CEA,1944, arises on manufacture of excisable goods while additional sales tax liabilityarises only when turnover exceeds a prescribed limit under local law - The scheme oflevy under both laws being different and additional sales tax having no relevance tothe manufacture, deduction thereof is not admissible to determine assessable value -Adjudication order upheld and Appeal dismissed: CESTAT [para 2, 3]


Cipla Ltd Vs CCE (Dated: March 24, 2017)

CX – Appellant manufacture medicaments on own as well as on loan license basis –during the course of manufacture on behalf of principals, appellant used some of theirown inputs for which they have raised commercial invoice to principals and availedCENVAT credit on such inputs – case of department is that since inputs used formanufacture of final products, which final products were sold to principals, ownershipstands transferred and hence credit is not admissible – lower authorities denied credit,so appeal to CESTAT. Held: Contention of Revenue not agreed with – for the purposeof allowing credit, criteria laid down in the CCR is that inputs should be duty paid,should be used in the manufacture of final product and final product is cleared onpayment of duty – criteria stands fulfilled in the present case – although thecommercial invoices were issued, but the inputs remained in the factory of theappellant and were used in the manufacture of final product – no clearances of inputwas made to the principal, therefore, appellant is legally entitled for such input credit –impugned orders set aside and appeals allowed: CESTAT [para 5]


Cipla Ltd Vs CC & CE (Dated: March 31, 2017)

CX - Appellant manufacturing PP medicines and also non-excisable goods viz.medicaments containing alcohol or narcotic drugs within same manufacturing premiseson which no excise duty is payable - since CENVAT credit availed on inputs used inmanufacture of such non-excisable goods, AA confirmed demand of CENVAT and alsoappropriated an amount of Rs.1,92,86,034/- paid by appellant; demand of interestalso made along with penalty - appellant in appeal before CESTAT against demand ofinterest and penalty. Held: Apex Court in case of Ind-Swift Laboratories - 2011-TIOL-21-SC-CX has while interpreting the term “taking credit or utilization” in rule 14 of CCRheld that in both cases, interest is chargeable - in the matter of imposition of penalty,as regards a huge CENVAT credit demand of Rs.1.92 crores, adjudicating authority hasgranted substantial relief by imposing penalty of Rs.50,000/- only and which is veryreasonable and does not require any interference - impugned order is, therefore,upheld and appeal is dismissed: CESTAT [para 5]


Man Industries (India) Ltd Vs CCE & ST (Dated: May 1, 2017)

CX – Valuation – Section 4 of the CEA, 1944 – As per State Govt. incentive schemeappellant was allowed to recover the amount of sales tax involved and retain the same– such amount is subsequently remitted by the assessing officer under GVAT Act –amount retained cannot be termed as ‘additional consideration' – no CE duty liabilityarises on such amounts – Impugned order set aside and Appeal allowed: CESTAT [para6.1 to 6.4]



CCE Vs Rallis India Ltd (Dated: May 1, 2017)

CX - Section 2(f) of the CEA, 1944 - Revenue is in appeal to press for the reversal ofthe order of the appellate authority who held that the scrap generated in the course ofconversion of aluminium bottles/tin containers does not amount of manufacture andnot dutiable. Held: Law is settled that no one manufactures scrap - Revenue shouldhave established that the goods came out in the course of manufacture, wasmarketable - there may be a case of stray marketability but in the regular course thegoods were not found to be marketable in absence of any market enquiry done - asRevenue has failed to discharge its proof of marketability during the impugned periodNovember 1999 to 31 August 2004, appeal is dismissed: CESTAT [para 1, 3]


Prakash Cotton Mills Pvt Ltd Vs CCE (Dated: May 19, 2017)

CX - During the period 01.04.2004 to 08.07.2004 appellant cleared scrap of machineryand machinery parts without payment of duty - lower authorities held that appellant isliable for payment of duty on such removal of scrap in terms of rule 3(4) of the CCR,2002. Held: In appellant's own case reported as - 2017-TIOL-114-CESTAT-MUM ,Tribunal has held that rule 3(4) applies only when capital goods is removed as such -in the present case worn out parts of capital goods were cleared, therefore, rule 3(4) isnot applicable - as issue is no longer res integra and judgments cited by the AR are notrelevant, therefore, impugned order is set aside and appeal is allowed: CESTAT [para4]


CCE Vs Mercedes Benz (India) Pte Ltd (Dated: May 23, 2017)

CX – Assessee had deposited duty liability on 'road delivery charges' subsequent todischarge of duty liability on clearance of vehicles manufactured by them – Tribunalhad held this levy to be beyond the scope of the provisions of section 4 of the CEA,1944 with consequential relief in the form of refund – respondent assessee had madeentries in the books of accounts and shown the amount as “receivables” in the finalaccounts pertaining to year 2011 and the Chartered Accountant had certified that theduty burden had not been passed on to the customers – original authority held thatthis was not sufficient evidence of duty having been borne by the assessee andrejected the refund on the ground of unjust enrichment – Commissioner(A) set asidethis order and, therefore, Revenue is in appeal. Held: Argument of Revenue that thefailure to incorporate this amount under the head of 'receivables' in the balance sheetof 'each' year after the payment of duties implies that this amount had been booked asexpense of the respective years and, having thus found a place in the expense side ofthe 'Profit & Loss account', merged into the cost of manufacture does not appeal tologic – unless the duty amount has found a place in the accounts pertaining to cost ofmanufacture/cost of sales, it can by no stretch, be held to have been incorporated inthe price – booking of such duties in the expense side of the profit and loss accountindicates that the burden has been borne by the company – no system of accountingwould permit the incorporation of an expense item twice – no reason to interveneagainst the impugned order – Revenue appeal is dismissed: CESTAT [para 6, 8]


D-Link (India) Ltd Vs CCE (Dated: May 26, 2017)

CX - Appellants are engaged in the manufacture of networking and informationtechnology products [Chapter 84 & 85] – in respect of goods supplied to researchinstitutions under exemption notification 10/97-CE during the period January to June2005, appellant paid an amount equal to 8% or 10% of value of such exempted goodsunder rule 6 of CCR, 2004 – in the light of the decision in Andhra Pradesh Paper MillsLtd - 2004-TIOL-1056-CESTAT-BANG , appellant took suo motu credit of the amountpaid – demand issued for recovery and after passing order, appellant reversing amountin view of SC decision in Amrit Paper - 2006-TIOL-85-SC-CX with part interestpayment – Commissioner(A) upheld demand and interest but reduced penalty toRs.50,000/- in both the cases – appeal to CESTAT and appellant contending that issuewas contentious and interpretation of rule 6 was involved, therefore, penalty shouldnot be imposed and interest is not imposable as credit was not utilized. Held: As perrule 14 of CCR, it is clear that interest is chargeable on amount either wrongly taken orutilized and, therefore, interest is correctly chargeable as held by SC in Ind-SwiftLaboratories Ltd - 2011-TIOL-21-SC-CX – as regards penalty, merit in the submissionmade by the appellant, therefore, penalty set aside – appeals are partly allowed:CESTAT [para 4]


Castrol India Ltd Vs CCE (Dated: May 8, 2017)

CX - Section 35C(2A) of the CEA, 1944 - Appellant seeks extension of stay on theground that their appeal has not come up for disposal for no fault of theirs. Held: Inthe light of the CESTAT decision in Venkateswara Filaments Pvt. Ltd. & Ors - 2014-TIOL-2388-CESTAT-AHM and as the stay in the present case was in force beyond07/08/2014, same would continue till the disposal of the appeal - applications forextension of stay are disposed of: CESTAT [para 3]


Bharat Petroleum Corporation Ltd Vs CCE (Dated: May 8, 2017)

CX – Whether CENVAT Credit is admissible on the telephone services installed in theresidence of the employees of the appellant. Held: Issue is no longer res integra – onidentical issue, the case has been decided in favour of the appellant in their own caseby Tribunal vide order dated 13/12/2012 - 2013-TIOL-668-CESTAT-MUM &04/01/2017 - impugned order is set aside and the appeal is allowed: CESTAT [para 4]


CCE Vs Ace Calderys Ltd (Dated: May 19, 2017)

CX - CENVAT credit availed against supplementary invoices issued by contractors forservices rendered between June 2005 and March 2006 as well as 2006-07 - Revenuedenying credit on the ground that credit is availed in contravention of rule 9(1)(b) ofCCR - appeal to CESTAT - Commissioner(A) held that the invoices issued by serviceproviders and used for availing credit are not covered by the restriction in CCR, 2004 -Revenue in appeal before CESTAT. Held: Availment of credit against invoices, primaryor supplementary, is not permitted if the duty is discharged in consequence ofproceedings initiated for recovery in circumstances of fraud, collusion, willfulmisstatement, suppression of facts or contravention of provisions of the taxing statute- However, at the same time, it is seen that while there is specific restriction onutilization of supplementary invoices pertaining to supply of goods the enumeration ofdocuments relating to services does not envisage a separate treatment ofsupplementary invoices - issue has been settled by Tribunal by the decision cited in theimpugned order and has been reinforced in the case of Delphi Automotive Systems (P)Ltd - 2013-TIOL-1793-CESTAT-DEL - Revenue appeal is without merit, hencedismissed: CESTAT [para 3, 4]


Om Sagar Engineering Pvt Ltd Vs DCCE (Dated: May 25, 2017)

CX - In the preamble to the order passed by the Dy. Commr., the appellant wasmisguided regarding the forum before whom the appeal is to be filed - However, sincethe Tribunal cannot entertain an appeal against the order passed by the Dy.Commissioner, appeal dismissed as non-maintainable: CESTAT [para 5]



CC & CCE Vs Hetero Labs Ltd (Dated: March 12, 2017)

CX - Assessee, a 100% EOU procured inputs indigenously as well as imported thesame by claiming the benefit of Notfn. No.52/2003-Cus & No.22/2003-CE whichenables them to import the goods without payment of duty so assessee not paid anyduty on the inputs - Assessee sought the permission of the revenue to clear the inputswhich assessee was unable to consume in 100% EOU - Revenue granted permission toassessee for clearance of such inputs to DTA on discharge of applicable duties - The

applicable duties were discharged by the assessee by debiting in CENVAT accountconsidering them as Central Excise duty however revenue alleged that assessee wassupposed to pay the applicable duty in cash not from the CENVAT credit account - SCNwas issued demanding duty for which assessee objected that demand was barred bythe limitation -Held - By considering the ratio decided in the case of MatrixLaboratories Ltd 2011-TIOL-1844-CESTAT-BANG issue is decided in the favour ofassessee: CESTAT


Grewal Enterprises Vs CCE (Dated: March 21, 2017)

CX - Assessee engaged in manufacture of motor vehicles/tractor parts & accessories -Revenue alleged that assessee wrongly availed modvat credit on GP sheets which wasnot used as an input to make final product were cleared clandestinely and furtherpurchased HR/CR sheet without invoice to avoid duty which was used in manufacturingof final product - Demand for reversal of duty along with interest was raised & imposedpenalty - Held- The story of revenue was based on surmises and conjectures asrevenue failed to produce any evidence on record to establish that the said GP sheetsstand cleared by assessee in open market and also to establish that assessee procuredthe HR/CR sheets from any other source without invoices - Therefore, by consideringthe case of Silence Auto, demand raised by revenue was held unjustified: CESTAT(Para 3,4,7,9)


CCE, ST & C Vs ITC Ltd (Dated: March 31, 2017)

CX - Assessee engaged in manufacturing of Machine Rolled Cigarettes and Cut Tobacco- Revenue alleged that assessee wrongly availed the cenvat credit of ST on theseservices such as Commercial and Industrial Construction Service, Interior DecoratorService, Outdoor Caterer Service, Air Travel Agent Service, Tour Operator Service,Cable Operator Service and Membership of Club or Association Service reason beingthese services not eligible for cenvat credit as these services were not used in themanufacturing of finished goods - Demand was raised for the duty with interest alongwith penalty whereas assessee challenged the demand and Commr. allowed the crediton Commercial and Industrial Construction Service, Interior Decorator Service andOutdoor Caterer Service however denied the credit on remaining services - Held- Afterreviewing the records of the case it was proved with corroborative evidences and byvarious case laws that all the services availed by the assessee were considered asinput services and used while manufacturing the final product - Therefore, assesseerightly availed the cenvat credit: CESTAT


Hindustan Tyre Resoles Vs CCE (Dated: May 9, 2017)

CX - Assessee engaged in retreading / resoling of the worn out tyre - When revenueconducted investigation in premises of assessee they found that assessee wasmanufacturing 'pre cured tread rubber strips' classifiable under 4008.21 of CETA, 1985and assessee was not entitled for benefit of Notfn. No.1/93-CE - Demand was raisedon assessee with interest and imposed penalty however assessee objected the view ofrevenue and mentioned retreading of tyre classified under 4016.99 as 'other articles ofvulcanized rubber other than hard rubber' and eligible for benefit - Further mentionedthe demand of the revenue was barred by the limitation - Held - By following the ratiodecided in the case of Elgi Tyres & Treads and by considering the HSN ExplanatoryNotes the relevant entries and the amendments carried out in Chapter Note 9, thegoods produced by assessee rightly classified under 4008.21 however demand for thenormal period of limitation was upheld reason being contrary decisions were given bythe Tribunals in classifying the same product under different subheadings in differentperiods: CESTAT


India Cements Ltd Vs CC, CE & ST (Dated: July 20, 2016)

CX - Assessee engaged in manufacturing of cement - Revenue alleged that assesseewrongly availed Cenvat credit on various services by considering them as inputservices however they were not input services - As per the Rule 2(1) of CCR, 2004services like formation of new gravel road, conveyor extension, shed extending work atpacking plant, wagon loading and bore well works not fall under the input services anddemand or reversal of credit availed on these services was upheld however remainingservice were considered as input services and assessee rightly availed credit on them -Since there was some lack of clarity on eligibility of Cenvat credits relating to civilworks, penalty imposed was held unjustified: CESTAT


Dabur India Ltd Vs CCE & ST (Dated: April 13, 2017)

Central Excise – Appellants registered as Input Service Distributors and availed thefacility of Cenvat Credit of Service Tax paid on various Input Services includingAdvertisement Service & Sales Promotion Service – As ISD, distributed Input Servicecredit to its various Units and units were availing area based exemption – it appearedto the revenue that under Clause (b) of Rule 7 of the Cenvat Credit Rules, 2004,Appellant was not entitled to distribute such Input Service Tax credit which wasattributable to Services used in a Unit exclusively engaged in manufacture of exemptedgoods – Hence, SCN was issued and was alleged that Advertisement Service & SalesPromotion Services received by Input Service Distributor which was attributable toexempted goods and traded goods were distributed to the Units which weremanufacturing dutiable final product – Also, it appeared that Dabur India Ltd. (ISD)distributed Cenvat credit which was inadmissible credit – SCN was issued contendingthat the Cenvat credit of Service Tax attributable to unit which is involved in themanufacture of exempted goods was distributed to M/s Dabur India Limited,Shahibabad , Ghaziabad and same was liable for recovery – Adjudicating authorityconfirmed both the demands – Hence, the present appeals.

Held: The Original Authority has specifically relied on provisions of Clause (d) of Rule 7of the Cenvat Credit Rules, 2004 for confirmation of demand whereas no suchprovision has been invoked in the said Show Cause Notice because during the materialperiod such provisions did not exist on statute - Clause (b) of Rule 7 of the CenvatCredit Rules, 2004 that existed during material time provided that such Cenvat creditof Service Tax paid was not admissible to be distributed which was exclusively used inunit engaged in the manufacture of exempted goods – SCN did not establish that theCenvat credit which was proposed to be recovered was used in a unit exclusivelyengaged in manufacture of exempted goods – Appeals allowed – (Para 6).


CCE Vs Continental Carbon India Ltd (Dated: February 14, 2017)

CX - Assessee engaged in manufacture of Carbon Black and using input furnace oil forgeneration of steam to run their machinery and to generate electricity and some partof surplus steam is sold out to adjoining industrial units - Revenue views that assesseeis required to reverse an amount of 8% or 10% on the value of steam cleared - WholeSCN is misconceived as it is not the case of Revenue that furnace oil is not fuel, usedin factory of assessee - It is further found that steam is not a final product of assessee- Fuel has been used for manufacture of Carbon Black and also for generation of steamwhich is used for generation of electricity through cogeneration plant/turbine forgeneration of electricity in factory, and only surplus steam have been cleared toadjoining factories - There is no error in order of Commissioner (A) and assessee is notrequired to reverse any amount under Rule 57CC of CER, 1944 r/w Rule 6(2) of CCR,2001/2002 & 2004: CESTAT


Cords Cable Industries Ltd Vs CCE & ST (Dated: February 20, 2017)

CX - Assessee, an EPCG license holder engaged in manufacture of Electric Wires andCables and imported eligible capital goods (Plant and Machinery) for manufacture offinal product i.e, power cables - In terms of conditions contained in EPCG license,assessee was entitled for benefit of Terminal Excise Duty and there was norequirement of payment of CX duty on procurement of capital goods on the basis ofinvalidation letters issued by DGFT - However, assessee had purchased goods onpayment of duty and availed cenvat credit of such duty paid on capital goods - Sincethe assessee has reversed cenvat credit before issuance of SCN and also paid interestattributable to such late reversal of cenvat credit, penalty cannot be imposed: CESTAT


Decent Laminates Pvt Ltd Vs CCE & C (Dated: January 11, 2017)

CX - Alongwith present assessee, the company M/s Simalin Chemical Industries PvtLtd. was issued with a notice alleging evasion of duty and proposal for recovery of dutynot paid with interest and penalty - Said M/s Simalin Chemical Industries Pvt Ltd andother two co-noticees approached the Settlement Commission admitting their liabilityaccordingly, immunity from penalty, prosecution was granted to them under Sec.32Mof CEA, 1944 - Present assessee argued that same immunity should also be extendedto them and penalty imposed on them be set aside - In view of Motilal Gupta 2016-TIOL-1329-CESTAT-MUM , argument advanced by assessee that automatic immunitybe granted to assessee who were not before the Settlement Commission, accordingly,not sustainable - Impugned order is upheld: CESTAT


Rajput Steels Vs CCE (Dated: May 30, 2017)

CX – Misappropriation of Government duty has been committed within the bankpremises by a person in connivance with the bank officials - appellants cannot gain, inany manner, on the basis of a forged document - appellants produced a frauddocument claiming duty payment, therefore, department is well within their right toproceed and recover the central excise duty, not paid to the Government - since thedocuments have been established to be fraud/fake, this was sufficient to invoke theextended period of limitation – failure of the Department to detect the forgery muchearlier cannot extend the advantage to the appellants - appeals dismissed as beingdevoid of merits: CESTAT [para 9, 10, 11]



Dujodwala Resins And Terpenes Ltd Vs CCE (Dated: March 2, 2017)

CX - Assessee engaged in manufacturing of Rosins/ Rosins derivatives andTerpentine/Terpentine derivatives - Assessee challenged the order of Commr. in whichassessee wrongly availed CENVAT credit on certain imported chemicals which were notused by assessee as inputs for manufacturing of final product - Demand for thereversal of CENVAT credit was raised with interest & imposed penalty -Held- Revenuecould not put on record any independent evidence to prove that assessee has wronglyavailed CENVAT credit for the manufacturing of final product - Therefore, impugnedorder set-aside: CESTAT (Para 2,4,9,11)


CCE Vs Taste Well Products (Dated: January 18, 2017)

Central Excise – Payment of duty on Chewing Tobacco and unmanufactured tobaccounder Sec 3A – Respondent assessee intimated the department about the closure ofthe unit for different periods and paid duty on pro rata basis for the working period –Department contended that the assessee has to pay full duty at the beginning of themonth and then claim abatement for the closure period – On appeal, Commissioner(Appeals) dropped the demand and ordered for payment of interest by following theprecedent order of the Tribunal – Revenue is in appeal against the order of theCommissioner (Appeals).

Held: The Commissioner (A) has applied the law correctly. Accordingly, the impugnedorder is sustained along with reasons mentioned therein. (para 3)

2017-TIOL-1961-CESTAT-DEL-LB

Reed Medway Packaging Company of India Pvt Ltd Vs CCE (Dated: March 30,2017)

CX - Assessee is manufacturer of weighing machines and conveyors which have beencleared to M/s Non-Conventional Energy Development Corporation of Andhra Pradeshfor purpose of setting up a Bio Gas Combustion Co- Generation Power Project andclaimed exemption under Notfn 6/2002-CE - Dispute is relating to entitlement ofassessee for said exemption - There is no conflict between the two decisions cited byDivision Bench - In submissions before Tribunal, assessee categorically asserted thatcertificate for exemption issued by Non-Conventional Energy Development Corporationof Andhra Pradesh Ltd. is for exemption under Sl.No. 16 of List 9 of said notification -No claim for exemption is being made under Sl.No.21 as 'parts' - That being the case,there is no dispute to be resolved by Larger Bench as assessee is claiming exemptiononly under Sl.No.16 - Eligibility of assessee for exemption under Sl.No.16 has to beexamined by Division Bench considering the scope of said entry and nature ofimpugned goods for which exemption is claimed: CESTAT


Controls and Switchgears Company Ltd Vs CCE (Dated: April 13, 2017)

CX –By impugned order, exemption of notification no.50/2003-CE dated 10.6.2003 hasbeen denied to the assesseeon the ground that assessee did not file the option forclaiming benefit of the exemption notification – appeal to CESTAT.

HELD - Intimation to the department about the option for claiming benefit of theexemption appears to be only a procedural requirement –a liberal attitude, therefore,has to be taken in this regard, when the assessee otherwise is entitled to the benefit ofexemption notification– following the observations of the Supreme Court in the case ofHari Chand Shri Gopal - 2010-TIOL-95-SC-CX-CB , the assessee is entitled to thebenefit of the said exemption notification for the relevant period – impugned order setaside, assessee's appeal allowed – Revenue's appeal also stands disposed ofaccordingly : CESTAT [para 5, 6]


CCE Vs Diesel Locomotive Works (Dated: January 18, 2017)

CX - Assessee engaged in manufacture of Locomotives & its Parts thereof - It wasobserved that assessee cleared one Locomotive on the strength of Invoice and paid CXduty on Assessable Value - Further contended that transportation charges are to beexcluded from assessable value - Demand confirmed alongwith interest and penalty -It is found from SCN that it is an admitted fact of Revenue that transportation chargesare deductible, if the same are shown separately as provided under Rule 5 of CEVR,2000 - It is evident that transportation charges are shown separately by assessee andaccordingly, SCN is misconceived and untenable: CESTAT


Murshidabad Biri Works Vs CCE & ST (Dated: February 21, 2017)

CX - Assessee engaged in manufacture of Handmade Branded Biris - A SCN was issuedfor alleged clandestinely manufacturing and removing of Handmade Biris from theirfactory without proper accounting of such manufacture and clearances in statutoryrecords and without payment of duty leviable thereon - Demand confirmed alongwithinterest and penalty - It is noticed that CX officers sent seized documents to CentralForensic Science Laboratory, Kolkata for examination of handwriting of seizeddocuments - Assessee had not disputed the said report - Assessee had not filed anyreconciliation statement on basis of quantity as shown in seized documents andclearance of goods as mentioned in RG-12A Register - Adjudicating Authority had notgiven the option to pay penalty of 25% of duty as provided under section 11AC of theAct which they are entitled to: CESTAT


Hicure Pharmaceuticals Pvt Ltd Vs CCE, C & ST (Dated: February 17, 2017)

Central Excise – Pre-deposit - appellant is a manufacturer of P & P medicines - As perthe Drugs & Cosmetics Act, 1940 and Drugs & Cosmetics Rules 1945, testing ofmedicines is mandatory before causing further course of packing - Samples weredrawn by them for in-house testing without following the procedure prescribed underChapter 11 of the CBEC's Excise Manual of Supplementary Instructions, 2005 – Dutydemand with interest and penalty adjudicated and was agitated before theCommissioner (Appeals), who, vide the impugned order, rejected the appeal as notmaintainable, since no pre deposit was paid under Sec 35F of the Central Excise Act1944, applied to service tax matters under Sec 83 of the Finance Act 1994;culminating in the instant appeal.

Held: Considering the rulings cited and the factual matrix, the case needs to beremanded back to the Commissioner with a direction to decide the appeal on meritwithout insisting for pre-deposit, after affording an opportunity of hearing to theappellant and also allowing the appellants to produce any documents in his favour.[Para 6]


Excel Corrugated Boxes Pvt Ltd Vs CCE (Dated: February 23, 2017)

CX - Assessee are manufacturers of corrugated cartons and availing SSI Exemptionunder Notfn 8/2003 as amended - Assessee was issued a SCN proposing to recoverCENVAT credit wrongly availed and also to recover CENVAT credit suo moto taken inPLA along with penalty - Issue involved is that assessee had taken suo moto credit intheir PLA during month of April 2005 as against excess payment of duty during period2003-2004 - In terms of Board's Circular No.249/83/96-CX , the proper procedure incase of excess payment should have been refund claim, whereas credit was taken suomoto by assessee - Assessee have contravened the provisions of sub-rule (2) of Rule11 of CCR, 2004 and Section 11B of CEA, 1944 and they are liable to pay duty shortpaid and are also liable for penalty - SCN was issued well within period of limitationand as such, demand is not time barred: CESTAT


CCE, C & ST Vs Flash Forge Pvt Ltd (Dated: January 18, 2016)

Central Excise – Manufacture of 'Pipe Fittings and Forgings' - opted for exemption frompayment of Central Excise duty in terms of Notification No. 8/2003 by filing necessarydeclaration – Upon opting the benefit, the assessee is required to reverse the CENVAT

credit on inputs lying in stock and on inputs contained in finished and semi finishedgoods lying in stock, as provided under Rule 9 of the CENVAT Credit Rules, 2002,which was reversed by respondent – Upon verification, case of revenue that therespondent has not reversed/paid the entire amount of the CENVAT credit as providedin Rule 9 – SCN issued as to why credit not reversed should not be demanded, penaltyshould not be imposed, interest should not be recovered and the goods seized shouldnot be confiscated – The original authority confirmed the demand and on appeal,Commissioner (A) upheld the same, but reduced the redemption fine – On appeal totribunal, the assessee contested the imposition of penalty and confiscation of goodsand tribunal remanded the matter to adjudicating authority for the limited purpose ofexamining the plea that penalty is not leviable under Section 11AC as there was nosuppression of facts and also that goods are not liable for confiscation - Thus the issueof reversal of CENVAT credit attained finality – The adjudicating authority imposedpenalty and ordered confiscation of seized goods – on appeal, Commissioner (A)observed that there is no suppression or intention to evade payment of duty andtherefore that no penalty can be imposed under Section 11AC of the Act and held thatheld that the goods are not liable for confiscation and set aside both penalty andredemption fine – Hence, the present appeal by revenue.

Held: Contention of the department is that the Commissioner (Appeals) erred inholding that the appellant has not suppressed any facts for the reason that theappellant has intimated the reversal of credit and also reflected the same in themonthly returns and also that the amount of credit availed by the appellants wereregularly disclosed in the monthly returns filed by them - Commissioner (Appeals) hasobserved that the department could have conducted scrutiny of the returns whichdisclosed the reversal of credit and called for details from the respondent - That themistake ought to have been pointed out to the respondent even before search andshow cause notice as the mistake is only a remedial mistake - the credit availed by therespondent and the returns filed are proper and do not contain any discrepancy - It iscorrect that the respondent had reversed the credit only after the matter reached theTribunal in the first round of litigation - However, they have reversed the credit raisedin the Show Cause Notice - the Anti-Evasion Wing has not been able to point out, apartfrom non-reversal of the credit as required in the transitional provision contained inRule 9, any irregularity in the credit availed by the respondent - the Commissioner(Appeals) has rightly set aside, the penalty imposed under Section 11AC and also theconfiscation of goods – Appeal dismissed – (Para 11, 12, 13, & 14)


Cipla Ltd Vs CC & CE (Dated: May 26, 2017)

CX - When the capital goods were cleared after substantial use, such capital goods donot remain "as such" - second proviso which was inserted on 13.11.2007 in rule 3(5)of CCR, 2004 which provides the mechanism for payment of duty on the used capitalgoods makes it clear that under any circumstances, in case of removal of used capitalgoods, the duty equal to CENVAT credit availed cannot be leviable - However, sincewhatever duty was paid was not being disputed by the appellant, the same wasmaintained – Impugned order set aside and Appeal allowed: CESTAT [para 4]



Shree Om Enterprises Pvt Ltd Vs CCE (Dated: February 23, 2017)

Central Excise – Benefit of SSI Exemption – Manufacture of various exempted goodsnamely, advertisement and publicity material - assessee was availing the SSIexemption whereas the Revenue is of the view that the assessee is not entitled toexemption in respect of the dutiable goods manufactured in view of amendment in thenotification and the total value of the clearances were to include the clearances ofexempted goods also – SCN issued alleging that the benefit of Notification No.8/2003-CE dated 1.3.2003 was not available to the appellant - the benefit of exemptionNotification was denied but the Commissioner (Appeals) held that the assessee is not

entitled to avail SSI exemption, but allowed the benefit of CENVAT credit – Hence,both revenue and the assesse are on appeal.

Held: The similar issue came up before this Tribunal in the case of Savotham CareLimited - It is clear that to determine aggregate value of clearances of excisable goodsfor home consumption and clearances bearing the brand name or trade name ofanother person, which are ineligible for the grant of this notification in terms of para 4are not to be included - if the clearances bearing the brand name or trade name ofanother person, are excluded from the turnover, the same will be within the exemptionlimit – Hence, the assessee is entitled to SSI exemption - Consequently, the appealfiled by the assessee is allowed and the appeal filed by the Revenue is dismissed –(Para 10).


Parvesh Jain Vs CCE (Dated: March 14, 2017)

CX - All the firms were manufacturing cosmetic products and selling them throughvarious trading firms - Appellants have challenged the imposition of penalty under Rule26 of CER, 2002 - In respect of goods purchased without bills, payments were settledin cash and for goods purchased with bills, payments were settled by cheque - Apenalty has been imposed on Jainico traders, Proprietor Shri Sanjay Jain - Shri SanjayJain, Partner has admitted that they were purchasing goods from Shri Ashok Jain bothwith bills and without bills every month - Further, goods were seized from theirpremises which were cleared without payment of duty - Penalty imposed under Rule 26is fully justified and merits no interference - A penalty of Rs 1 lakh has been imposedon Shri Parvesh Jain - Shri Parvesh Jain also in his statement has admitted that he hasmanaged the sales without invoices - Consequently, penalty is liable to be imposed onShri Jain under Rule 26 - No reasons found to interfere with impugned order: CESTAT


Dynamic Techno Medicals Pvt Ltd Vs CC & CE (Dated: February 13, 2017)

CX - Assessee is manufacturer of Cotton Crepe Bandages and clear the goods on stocktransfer basis to central warehousing depot situated in different places - Assessee weredrawing samples for testing quality of product and were retaining such samples withinfactory as control samples - Original authority had confirmed the demand for reasonthat drawing of samples should be considered as captive consumption but same is setaside at level of Commissioner(A) by taking the view that samples are retained withinthe factory and hence not liable to duty inasmuch as same have not been cleared fromfactory - Quantity discount was correctly claimed by assessee as the same was claimedat the time of sale of goods - Quantum of discount extended per unit of product tosuch institutional buyers is less than extended by way of quantity discounts -Consequently assessee's claim is that excise duty paid per unit of bandage is alreadymore than that payable after quantity discount - Matter needs to go back only for thislimited purpose: CESTAT


CCE & ST Vs Methodex Systems Ltd (Dated: May 16, 2017)

CX - SSI exemption Notification 8/2003-CE - Respondent has cleared goods byembossing them with the mark “ME-2 L&T” and paid normal rate of duty by treatingthe same to be 'branded goods' - both the parties in question have regarded suchgoods as cleared with the brand name of L&T who are not eligible for the SSI benefit –Revenue view is that respondent had intentionally paid duty on these goods only foravailing the benefit of value-based exemption on their other clearances - revenue hasnot adduced any evidence which shows that the goods are ‘not branded' –understanding between buyer and respondent is that the goods are to be embossedwith “L&T” which has been considered as the brand name of the buyer - intention ismanifest from the fact that the goods stand cleared by the respondent on payment of

full duty without concession - It is, therefore, axiomatic that such clearances need tobe excluded while computing the aggregate value of clearances in a financial year interms of para 2(vii) of SSI notification – impugned order passed by Commissioner(A)cannot be faulted – Revenue appeal rejected: CESTAT [para 6, 7]



Global Diamond Pvt Ltd Vs CCE (Dated: March 27, 2017)

Central Excise – Gems & Jewellery - on specific information, a car was intercepted byNEPZ Customs while exiting from the outer gate of NEPZ, Noida; carrying four persons- On scrutiny of the vehicle, 7 packets containing stranded jewellery, diamonds,precious/semi-precious stones, gold in primary form, loose papers and two note books(written) were seized – The department viewed that the Appellant misused the NEPZfacilities and evaded the excise duty; adjudicated confiscation with RF, duty demand,and penalty under Rule 25 of the Central Excise Rules, 2002; now agitated herein.

Held: Miscellaneous application contesting jurisdiction of the Commissioner inadjudicating the confiscation, dismissed in view of the Board Circular No.72/2000-Cusdated 31.08.2000 - the demand is based on the documents recovered from ShriSubhash Sharma, on the detailed examination of which it emerged that the assessee-Appellants' Mumbai Branch used to despatch diamonds from Mumbai on the challansaddressed to their Branch located at New Friends Colony - These diamonds wereactually received at assessee-Appellants' manufacturing unit at NEPZ (now NSEZ),Noida without making any entry at NSEZ Gate; that after manufacturing of thediamond jewellery at the zone, the same were clandestinely removed in domestic areafrom the zone without payment of applicable duty - Hence, the duty demand is upheld- while computing duty, the adjudicating authority has not examined on merit theaspect of the benefit pertaining to the Special Additional Duty of Customs (SAD) andAdditional Duty of Customs [Countervailing Duty (CVD)] - The authority has also notexamined in detail the Work in Progress (WIP) Register where no deficiency was found- the impugned order is modified and the matter remanded for the limited purpose toexamine the benefit in computation as well as the amount mentioned in the Work inProgress (WIP) Register and providing a reasonable opportunity to the assessee-Appellants to present their case with liberty to file additional documents, if any, as perlaw [Para 4, 7, 8]


Gujarat Cypromet Ltd Vs CCE (Dated: March 21, 2017)

Central Excise – Demand - the appellants are engaged in the manufacture of CopperTubes/Brass Tubes - On the basis of Audit Report for the year 2002-2003, it is allegedthat the appellant had reduced the value of closing stock of the raw materials to theextent of Rs. 1,63,28,010/- by amortizing in their Balance Sheet (2002-03) but hadnot reversed the CENVAT credit of Rs. 26,12,481/- @ 16% of the said value - recoveryof the said credit with interest and penalties on the firm and individuals (under Rule 26of Central Excise Rules, 2002) confirmed in adjudication; upheld by Commissioner(Appeals), and agitated herein.

Held: There is no dispute that the appellant in their balance sheet, reduced the valueof closing stock amortising the amount during the financial year 2002-2003 as mentionin Schedule 8 of the balance sheet - In explaining the reduction in value during thecourse of investigation, the Chartered Accountant as well as the Executive Directorexplained that the amount has been debited to their profit and loss account whichcomprise of material value and other expenditures, namely, Salary & Wages, Power &Fuel, Factory Overheads, Depreciation, interest etc., relating to research anddevelopment charges over a period of time - It is also not indispute that the appellanthad reversed CENVAT credit on the raw material value/inputs which has been used forR & D purpose - There is no contrary evidence produced by the Revenue by which itcould be concluded that the entire value (by which closing stock is reduced) is

attributable to inputs on which credit has been availed – no merit in the orders oflower authorities insisting for reversal of credit on the entire value considering thesame as written off inputs and ignoring the specific evidences produced in the form ofstatement as well as statutory auditor's certificate - the impugned order is set-asidewith consequential relief [Para 6, 7]


Goyal Ispat Ltd Vs CCE (Dated: March 7, 2017)

Central Excise – Demand – Main appellant firm, GIL is engaged in the manufacture ofCTD Bars and MS Rounds etc. on their own account as well as on job work basis forM/s. KSL – During a departmental intervention, it was observed that (i) Actual cost ofraw materials received and consumed for conversion, i.e. the cost of entire rawmaterials used was not included in the value of the goods; only the cost of rawmaterials contained in the final products was included in the value excluding the costof burning losses etc.; (ii) Cost of transportation of raw materials from the principalsupplier (KSL) to factory premises of job worker (GIL), not included in the value of thegoods; (iii) Differential duty of Rs.1,73,40,743 arises from (i) and (ii) above; and (iv)GIL had effected undeclared excess clearances resulting in short payment of dutyduring the material period – Duty demand with interest and penalty under Sec 11ACconfirmed on the firm; apart from personal penalties under Rule 26 of the CentralExcise Rules, 2002, on the individuals; agitated herein.

Held: In respect of impugned goods manufactured on job work basis, valuation thereofis governed by Rule 11 of the Central Excise (Valuation) Rules, 2000, read with Rule 6of Central Excise Rules, 2002 read with Section 4 (1) (b) of Central Excise Act, 1944 –From a combined reading of these provisions, it is clear that the value of goodsmanufactured by GIL on job work basis will necessarily be the cost of raw materialsused in the manufacture of the item (including the cost of raw materials supplied freeof cost) for the job work plus the job charges (including the profit of the job worker, ifnot already included in the job charges) - GIL should have taken into account the costof raw materials that were received from KSL and have gone into the manufacture oftheir final products and not the quantity of raw materials as may have been present intheir end product - The reduction from such costing of higher burning loss to theextent of 11% and treating the same as assessable value for discharge of duty liabilityis then without any basis and has resulted in short payment of duty - Board's circulardt.15.01.1988 merely clarified that credit of duty on inputs cannot be denied on theground that part of the inputs is contained in the waste and scrap which may even beexempted from Central Excise duty; Appellant's reliance on this circular is thereforemisconceived - demand of differential duty on account of incorrect value of rawmaterials utilized for manufacture, along with interest liability thereof does not call forany interference. [Para 10]

As per the "Conversion Agreement" entered into between KSL and GIL, it was agreedupon that "appellants shall arrange for transport and bear all transport charges,loading charges and all other incidental charges in connection with lifting of rawmaterial from principal factory" - It is well settled that for the purpose of arriving atassessable value at the job worker's end, cost of transportation of raw materialbetween the principal and the job worker shall form a component for the purpose ofarriving at the cost of raw materials; same was reiterated by the CBEC CircularNo.643/34/2002-CX dt. 01-07-2002 - Adjudicating Authority has correctly observedthat irrespective of the fact that whichever party incurred the cost of transportation,the said cost has to be taken into account for the purpose of arriving at the cost of rawmaterials; and highlighted the fact that cost of transportation has been dealt withseparately in the agreement and that invoices issued by KSL contain only theassessable value and other taxes but do not show any transportation charges - nocause for interfering with the demand of differential duty in respect of non-inclusion oftransportation charges in the impugned order. [Para 11]

From the investigation, based on the data provided by GIL themselves, it has emergedthat the appellants have cleared goods in excess of that reported by them in their ER-1

returns, resulting in undischarged duty liability - GIL have not disputed the veracity ofthe documents based on which the demand has been quantified, they only contendedthat department has not brought on record any evidence to corroborate the detailssubmitted by their own Excise Manager and that statement towards that end has notbeen recorded from him or any other person - Since the discrepancy emerged, asdiscussed above, based on the declarations/information made/provided by GILthemselves to department, there is no need of further corroborating the same - nocause for interfering with the demand of differential duty [Para 12]

Appellants have suppressed the crucial information, wilfully misstated the value of rawmaterials used by them which resulted in depression of assessable value andconsequently duty evasion - Clandestine removal/unaccounted removal of job-workedproduct has also been effected in secrecy and by doctoring their periodical returns anddeclarations made to the department - In the circumstances, the plea of appellants onlimitation does not hold merit - there has been intentional undervaluation of the goodsand also unaccounted/clandestine removal of job-worked goods by GIL by subterfuge,suppression and wilful misstatement with the sole intention of evading legitimate dutypayable to the exchequer - investigation has successfully unearthed the questionablemodus operandi of the racket who has caused prejudice to Revenue with intent toevade excise duty, proving that clandestine removal of goods was made following apre-meditated design - invocation of extended period of limitation in the notice underproviso to Section 11A of the Central Excise Act and its affirmation in the impugnedorder, are very much in order and does not require interference. [Para 14]

A plain reading of Rule 26 indicates that imposition of the penalty therein is not tied toa conditionality that excisable goods have to be placed under confiscation under theAct/Rules - Only, the person implicated/concerned should have the knowledge of"possible confiscation" of the impugned goods - From the facts on record, Shri GhisulalKothari has emerged as the mastermind of the entire modus operandi designed toevade payment of Central Excise duty liability, inasmuch as he has planned/monitoredand executed such duty evasion not only by undervaluation of their end product butalso by unaccounted/clandestine removals of their job worked goods - his acts andomissions surely fall within the ambit of Rule 26 and will get exposed to penaltytherein - Considering that the appellant was the fulcrum of the Actio illicita in causa byGIL, resulting in short payment of differential duty, the penalty imposed on him is verymuch proportionate to his acts and role and justified, hence there shall be nointerference in the matter - Shri J. Balaji, Excise Manager of GIL, raised the samecontentions with regard to non-imposability of penalty under Rule 26 and as ExciseManager, cannot claim that he was unaware of the modus operandi and affairs of GILwhich resulted in such large scale evasion of duty - relatively low penalty imposed onhim by the adjudicating authority cannot be faulted with [Para 15, 16]


Hindustan Coca Cola Beverages Pvt Ltd Vs CCE (Dated: March 24, 2017)

CX - Both sides are on controversy on nature of input used for manufacture of MaazaOrange and Maaza Pineapple softdrinks - Assessee had imported pure and authenticaseptic pineapple concentrate and pure authentic aseptic orange concentrate and samewas not disclosed to department - Assessee failed to show purchase of fruit pulp orfruit juice to use the same in manufacture of drinks - Had the appellant brought out aclear test report subjecting the goods to chemical test to rule out the allegation ofRevenue that same falls under Tariff Heading 2202.99, it could have a case to fallunder tariff heading 2202.40 - There was no fruit pulp or fruit juice used inmanufacture of drinks in absence of any purchase record produced before any ofAuthority for that purpose - Accordingly, assessee is disentitled to benefit of exemptionnotfn having subscribed its goods to Tariff Heading 2202.99 - It was a case ofsuppression of material fact deliberately causing evasion - When Revenue dischargedits onus of proof bringing out the evidence discussed aforesaid and assessee failed todischarge its burden of proof to prove that base of drink manufactured was fruit pulpor fruit juice, possible inference that can be drawn is that claim of assessee wasbaseless without any evidence: CESTAT


International Paper Appm Ltd Vs CCE, C & ST (Dated: April 13, 2017)

CX - Assessee engaged in manufacture of paper & paper boards which are thenexported upon payment of duty - Assessee then claimed rebate which was delayed &interest on such rebate was denied - Held - Section 11A of the Act applies to adjust therefund amount to the alleged arrears - Many decisions have held that an assessee isentitled to interest for delay in payment of sanctioned rebate on account of thesanctioned rebate being adjusted to pending arrears which have not reached finality -Therefore, assessee eligible to receive interest after three months from the date offiling the rebate claim: CESTAT (Para 1,2,4,9,10,11)


Triveni Movers Pvt Ltd Vs CCE, C & ST (Dated: April 3, 2017)

CX - Assessee engaged in manufacture of plates of various thickness and are availingCENVAT Credit on inputs and capital goods - Assessee were found to have clearedexcisable goods to SEZ developer without payment of duty - Whether assessee wererequired to pay 10% of total price of exempted goods - Issue is no more resintegraand is squarely covered in favour of assessee by High court of Karnataka in case ofFosrock Chemicals (India) Pvt Ltd 2014-TIOL-1609-HC-KAR-CX wherein Court afterconsidering various decisions of Supreme Court and other High Courts has held thatamendment to CCR, 2004 by substituting clause 1 of sub-rule 6 of Rule 6 of CCR, 2004by way of notfn 50/2008 CE has to be construed as retrospective in nature and benefitof Rule 6(6)(1) as amended in 2008 has to be extended to goods cleared to adeveloper of Special Economic Zone for their authorized operations: CESTAT


Sarvaraya Sugars Ltd Vs CCE, ST & C (Dated: February 14, 2017)

Central Excise – CENVAT Credit - appellants are engaged in the manufacture ofdutiable goods namely cane sugar, molasses, CO2, denatured spirit and de-naturedEthanol, apart from exempted goods namely rectified spirit - They use the electricitygenerated in their captive power plant for manufacture of finished products – Revenueviewed that they have availed irregular CENVAT Credit of service tax paid on inputservices [coal transportation, telephone service, certification, service charges, legalservice, audit service, cost auditing and courier service] which were used commonly inmanufacture of both dutiable and exempted goods without maintaining separateaccounts; adjudicated demand of proportionate credit availed on common inputservices used for manufacture of exempted goods like rectified spirit and excisablegood namely electricity; same upheld by Commissioner (Appeals), and agitated herein.

Held: Admittedly the appellants have not maintained separate accounts for the inputservices used in manufacture of dutiable and exempted products – The noticeproceeded to quantify the credit availed on common input services used for rectifiedspirit and electricity for the material period and arrived at the demand - The issuewhether electricity which is shown as no rate of duty in the tariff is an exemptedproduct or not, has been subject of debate in many cases - The appellant uses inputssuch as molasses and coal for generation of electricity which is used for production ofsteam, further used for manufacture of rectified spirit which is exempted - Themolasses arise as by product in the process of manufacture of sugar, and theappellants pay central excise duty on molasses and remove for use in Power Plantwithout availing credit – The Apex Court, in the case of Solaris Chemtech Ltd held thatelectricity is a not an excisable item and that credit is admissible on inputs used forgeneration of electricity which is capitively consumed; therefore the demand in respectof electricity cannot be sustained – in the instant case, though appellants may beeligible for the credit of input services used for manufacture of electricity consumedcaptively they are not eligible for credit of electricity sold outside and the proportionatecredit has to be reversed - there is no discussion in the orders in regard to whether

appellant is using the entire electricity captively and whether electricity is sold byappellant - for the limited purpose of verifying whether appellant is selling electricityoutside and therefore required to reverse the proportionate credit, the matter requiresto be remanded. [Para 7, 8]

Insofar as limitation is concerned, periodical Show Cause Notices have been issued tothe appellant alleging irregular availment of credit on capital goods installed in thecaptive power plant, covering almost the very same period - Further, audits have beenconducted for the very same period; the appellant has filed regular ER-1 returns andhave disclosed the credit availed by them - it cannot be alleged that the appellant isguilty of willful suppression of facts - the Show Cause Notice issued by invokingextending period of limitation cannot sustain; however the demand raised for thenormal period in respect of rectified spirit as well as electricity sold outside (if any), willhave to be sustained - the demand beyond the normal period being time barred is setaside and the impugned order is modified to the extent of setting aside the demandinterest and penalty beyond the normal period - The demand in respect of rectifiedSpirit for the normal period is upheld along with interest, while the penalty for normalperiod is set aside - For the limited purpose of verifying if electricity is sold outside andfor reversal of proportionate credit availed on electricity sold outside, the matter isremanded to the original authority. [Para 9, 10]


CCE Vs IKE Electric Pvt Ltd (Dated: April 19, 2017)

CX – Notfn. 6/2002-CE – Non-conventional energy devices - Exemption available onlywhen parts are consumed within the factory of production – plea that intention of thegovernment is to explore the activity of generation of non-conventional energy and ifthe benefit is not given purpose of such exemption is defeated, is untenable –Impugned order extending the benefit of notification is set aside and Revenue appealallowed: CESTAT [para 8 to 11]



Mahle Filters Systems India Ltd Vs CCE (Dated: February 1, 2017)

CX - Assessee were issued SCN demand alongwith interest and imposition ofequivalent penalty on the ground that they have taken inadmissible credit in respect ofservice tax paid on canteen service - Adjudicating authority has given the finding thatthey had engaged caterer from outside who supplied the food items from outside, costof which was ultimately borne by workers as is evident from salary slips of workers inwhich deduction made towards canteen charges was reflected - However, assessee hasclaimed that they have not availed Cenvat credit of said portion which is recoveredfrom employees - Matter remanded to verify this vital fact: CESTAT


Man Trucks India Pvt Ltd Vs CCE (Dated: February 8, 2017)

CX - Assessee engaged in manufacture of Heavy Commercial Vehicle and Chassis ofVehicles - Clearance of vehicles under FTP without payment of duty was objected to byDepartment on the ground that supplies were not effected against InternationalCompetitive Bidding (ICB) - According to Department, assessee ought to have firstdischarged Terminal Excise Duty (TED) and should have claimed the refund - Onpointing out the mistake by Department, assessee deposited the duty liabilityalongwith interest - SCN issued resulted in confirmation of demand alongwith interestand penalty - Since assessee had categorically informed the department regardingsupply of goods under EPCG licence and filed the re-warehousing certificate, allegationof suppression and fraud, cannot be leveled against assessee justifying the issuance ofSCN by invoking extended period of limitation - Demand confined to normal period -However, since there is no suppression with intent to evade payment of duty, penalty

cannot be imposed: CESTAT


Intex Infosolutions Ltd Vs CCE (Dated: July 27, 2016)

Central Excise – Penalty - as per Section 11AC of the Central Excise Act, 1944 theAdjudicating Authority has to give an option to pay 25% of reduced penalty within 30days from the date of the communication of the order - While the AdjudicatingAuthority has not given such option, the Commissioner (Appeals) for the first time, hasgiven an option to the assessee to deposit the reduced amount of penalty within 30days from the date of communication of such order - grievance of the Revenue is thatreduction in the quantum of penalty from 100% to 25% in the impugned order (passedby Appellate Commissioner) is not in conformity with the statutory provisions.

Held: Delhi High Court in the Case of K. P. Pouches held that adjudicating authorityshould explicitly state the option available to the assessee under Section 11AC; sameclarified by CBEC in Circular dated 22.05.2008 - issue also decided in the case ofKrishnaram Dyeing & Finishing Works, G.P. Prestress Concrete Works, and K. P.Pouches (P) Ltd. - Appeals filed by Revenue against the judgment of Gujarat HighCourt in the case of Santosh Textile Mills and Shaikh Paper Mills were dismissed by theSupreme Court - In view of the settled position of law, option given by theCommissioner (Appeals) for payment of reduced amount of penalty under Section11AC ibid is in conformity with the statutory provisions; no infirmity in the impugnedorder - the appeals filed by the Revenue are dismissed; and the appeals of assesseeare dismissed as withdrawn. [Para 5, 6, 7]


Narendra Polyprints Ltd Vs CCE & C (Dated: May 2, 2017)

CX - Applications are filed seeking restoration of appeals dismissed earlier on theground of non-supply of relevant documents namely, statements and Panchnamarelying which allegation of clandestine removal was made and later confirmed byadjudicating authority, analyzing these documents/evidence - Authorities below eventhough imposed penalty under Section 11AC of CEA, 1944, however, not extended thebenefit of discharging 25% of penalty imposed on fulfillment of conditions laid downunder said provision - In view of judgment of Gujarat High Court in case of KrishnaramDyeing & Finishing Works , assessee are eligible to discharge 25% of penalty imposedunder Section 11AC of Act subject to fulfillment of conditions laid down therein -Director was the mastermind in clearance of goods without payment of duty andtransporter has consciously participated in said removal of goods; therefore, penaltyimposed on Director and on transporter does not require any interference: CESTAT


Hawkins Cookers Ltd Vs CCE (Dated: March 21, 2017)

CX - Refund claim of assessee was rejected on the ground that they had not passedthe bar of unjust enrichment in absence of documentary evidence - Assessee hasproduced final invoices showing discounts given by them to their buyers - They havenot recovered any duty on discount from their buyers, therefore, assessee is able topass the bar of unjust of enrichment: CESTAT


CCE & ST Vs Hasanpur Sugar Mills Ltd (Dated: November 9, 2016)

CX - Assessees engaged in manufacturing of excisable goods such as sugar, molasses,anhydrous ethanol and denatured spirit - Revenue alleged that waste produced such asbagasse during the manufacturing of final product was dutiable - Held - Since, similarissue was settled in the case of DSCL Sugar Ltd 2015-TIOL-240-SC-CX and mentioned

in Circular No. 1027/15/2016-CX that bagasse was only an agricultural waste andresidue, which itself was not the result of any process and would not amount tomanufacture of finished good and not even marketable - Therefore not dutiable :CESTAT (Para 1, 5, 6)


Hero Honda Motors Ltd Vs CCE (Dated: February 15, 2017)

CX - Assessee engaged in manufacturing of two-wheelers and its spare parts -Assessee challenged the order of Commr. wherein advertisement expenses incurred bythe assessee should not be included in the assessable value to that extent, as it wasrecovered from the dealers - Demand for duty was raised with interest & imposedpenalty -Held- By considering the ratio decided in the case of Racold Applianceswherein advertisement organized by assessee on the request of dealer which directlybenefited dealer in their sales and where the amount spent was later recovered by theassessee from the dealer then the amount though recovered cannot be considered asamount received by assessee was in connection with the sale of goods and not dutiable: CESTAT (Para 3, 7,9 )


Havells India Ltd Vs CCE (Dated: March 8, 2017)

CX - Assessee engaged in manufacture of PVC insulated wires and cables and powercables - Dispute relates to their entitlement to exemption from duty in respect of wiresand cables cleared by them in terms of Notfn 10/97-CE and 3/2004 - As regards toNotfn 10/97-CE , except for recognition of in-house R&D Unit of consignee, there isnothing on record that required certificate from competent officer of Department ofScientific and Industrial Research, Government of India, has been obtained for suchsupplies of duty free excisable items - This is an essential condition which has not beenfulfilled by assessee and as such, they are not eligible for exemption under said notfn -Such wires and cables supplied to sub-contractors in connection with setting up ofwater supply plant is eligible for exemption under notfn 3/04-CE - It is apparent thatsaid notfn applies to all kinds of excisable products in a broad category as listed innotification - In such situation, denial of exemption to assessee is not justifiable - SCNitself did not invoke proviso of Clause of Section 11A (1), neither any reason has beenalleged in notice for invoking Section 11 AC - As such, there is no justification toimpose penalty of equivalent amount on assessee: CESTAT


Hindustan Zinc Ltd Vs CCE (Dated: April 27, 2017)

CX –Cenvat credit on the ST paid for consultancy service with respect to laying ofpipelines for supply of water from dams to the Dariba Mines of the appellant has beendenied : HELD – By following the ratio of the CESTAT's decision in the appellant's owncase - 2016-TIOL-2040-CESTAT-DEL , consultancy service is to be held as being inrelation to manufacturing activities of the appellant – therefore, ST paid under the saidservice is eligible for cenvat credit by the appellant – impugned order set aside, appealallowed : CESTAT [para 4, 5]


Jindal Steel And Power Ltd Vs CCE (Dated: April 18, 2017)

CX - Assessee engaged in manufacture of pig iron and other products of steel and soldtheir products to independent buyers in market as well as to their sister concern M/sNalwa Steel & Power Limited on payment of appropriate excise duty calculated as perRule of CEVR, 1944 - Assessee raised invoices for supplies made to sister concern andcharged consideration amount and also paid excise duty on cost basis in accordance

with Section 4 of CEA, 1944 - Department views that since M/s Nalwa Steel Pvt. Ltd.falls within definition of related party as defined under Section 4(3)(b)(i), assesseeought to have assessed excise duty payable as per Rule 8 of Valuation Rules - Rule 8comes into play in cases of transfer of goods to a sister/ related concern withoutconsideration which is not the case here - Impugned order set aside: CESTAT


CCE Vs Shakti Zarda Factory India Pvt Ltd (Dated: January 17, 2017)

CX - Chewing tobacco sold in pouches with MRP is covered by provisions of Section 4Ain terms of Notfn 10/2003-CE (NT) which amended Notfn 13/2002-CE (NT) - However,dispute is with reference to chewing tobacco contained in pouches of below 10 gms.net weight - Assessee cleared such pouches and discharged duty on transaction valuein terms of Section 4 - Revenue contended that assessment should be based on MRPvalue - Crux of issue is when these chewing tobacco pouches containing less than 10gms. of net weight were put together in polythene bag, whether to consider suchpolythene bag as a multi piece pack or a wholesale pack - Clarification was sought byindustry from Legal Metrology Department - In response to letter dated 28/07/2003 ofAll India Tobacco Manufacturers Association, GOI vide his letter dated 22/08/2003clarified the legal position to the effect that all packages below 10 gms. are totallyexempt from purview of rules - Further, in accordance with Rule 2 (x) and Rule 29,package containing 10 or more retail packages, common wholesale package, need notcarry " retail sale price " declaration thereon.

Considering legal provision of Section 4A of CEA, 1944 and applicable provisions ofSWM Act and Rules made thereunder and on close scrutiny of impugned order andgrounds of appeal, it is found that impugned goods cannot be subjected to as MRPbased assessment under Section 4A - Findings of lower authority in impugned ordersare legally sustainable - Refund involved in one of appeals allowed by Commissioner(A) shall be granted after due scrutiny of documents as per the requirement ofapplicable provisions: CESTAT


Hical Ltd Vs CCE, C & ST (Dated: January 23, 2017)

CX - Assessee engaged in manufacturing of pharmaceutical ingredients - Revenuealleged that assessee wrongly availed CENVAT credit of ST on these services such ascatering, outward freight, event management, house keeping, cab hiring andconsultancy on construction services by considering them as input services whichassessee challenged - Demand for reversal of ST was raised on assessee with interest& imposed penalty -Held- Services such as outdoor catering, housekeeping and eventmanagement service for annual day were considered as input services by consideringthe cases of Business Process Outsourcing (I) Pvt Ltd, Delphi Automotive System P Ltdand Semco Electric Pvt Ltd - Further services such as cab hiring, consultancy servicerelating to construction were not considered as input services after the amendment ofthe input services definition therefore credit availed on these services was denied -Regarding the credit availed on outward freight assessee not produced sufficient proofby way of documents that this was an input service too so matter remanded to theauthority to re-examine the admissibility for CENVAT credit on outward freight:CESTAT (Para 2 )


ITC Ltd Vs CCE, ST & C (Dated: March 06, 2017)

CX - Appeal filed against impugned order wherein cenvat credit was denied to assesseein respect of Air Travel Agents Service, Tour Operator Service and Membership of Clubor Association Service - Assessee submitted that these services are integrallyconnected with business of company - Since these services have been held to be 'inputservice' by various decisions of Tribunal and Courts - Issue is squarely covered in

favour of assessee - Impugned order set aside: CESTAT


Power Plastech Pvt Ltd Vs CCE (Dated: February 20, 2017)

CX - Assessee engaged in manufacture of plastic chairs and articles thereof andprocured four capital goods vide invoice/bills and also availed benefit of CENVAT creditof eligible duty under CCR - During course of audit of records of assessee, transactionswere noticed by department and issued a SCN alleging contravention of provisions ofRule 3(5) of CCR, 2005 and also proposed interest and penalty on assessee - Capitalgoods were imported on 14.03.2006 and was used for a year and then cleared on10.04.2007 without payment of duty under the belief that there was no provision inCCR, 2004 to pay cenvat either in full or depreciated amount of cenvat during relevantperiod - Prior to amendment effected on 13.11.2007, the assessee is not liable to payduty on removal of used capital goods: CESTAT


Parvenu Industries Ltd Vs CCE (Dated: March 7, 2017)

CX - Whether intermediate PP strips manufactured by SSI assessee falling underChapter 38 of CETA, 75 ultimately used in manufacture of woven sacks which werefinished goods is exempted in terms of Notfn 67/95-CE - Revenue contends that finalgoods manufactured being exempt, hence intermediate manufactured by assesseeshall not be exempted in terms of said Notfn - The input was thereby an intermediatemanufactured in factory of assessee and was not at all covered by barring clausescontained in (i), (ii) and (iii) and (iv) of Col.2 of Table appended to said Notfn - It ismandate of notfn that when conditions attached to column 2 and 3 of Table appendedto Notfn are satisfied, grant of notfn is undeniable - Revenue says that assessee shouldbe denied under proviso to notfn - Such contention fails to get appreciation for thereason that goods are neither exempt nor subject to nil rate of duty by virtue ofassessee's status as SSI whose clearances were otherwise dutiable: CESTAT


Resham Polymers Ltd Vs CCE (Dated: February 15, 2017)

CX - Assessee engaged in manufacture of polyethylene sheathing compound - Basedon investigation carried out by Revenue, SCN inter alia alleging that Cenvat Credit wastaken against Polyethylene Granules purchased from GAIL Pata, which was sold inopen market and also Cenvat credit was taken against raw material, which waspurchased from different manufactures such as IPCL, GAIL, RIL, which was sold inopen market - Assessee has not given sufficient evidence that this material quantifying6,70,000 Kgs of raw material, polyethylene granules was received by them and usedfor manufacture in their factory, therefore, this demand of cenvat credit on account ofnon-receipt of raw material along with interest and imposition of correspondingequivalent penalties hereby sustained - In case of remaining demand of Rs61,79,502/-, assessee has inter alia argued that there has been repetition of certainquantity and the invoices leading to over-lapping of certain cenvat credit amounts, andtherefore these are certain errors in confirmation of demand, therefore, the matterdeserves to be remanded - Individual penalties imposed on other assessees namelyShri Pradeep Lohia, Managing Director and on Shri Harish Arora, Partner, M/s BombayGolden (India) Regd. are set aside and same are to be adjudicated afresh: CESTAT


Satya Enterprises Vs CC, CE & ST (Dated: April 11, 2017)

Central Excise – Rectification of Mistake – SCN was issued by the Department statingthat the villages Thummaluru (Appeal No. E/2609/2010) and Maheswaram (Appeal No.E/2614/2010) are included in the GO No. 274 dated 20.04.2007 where by these

villages are added to the jurisdiction of HUDA - Therefore, these villages ceased to berural area and that therefore appellants cannot claim the benefit of Notification No.8/2003.

Held: The Schedule produced by the appellant/assessee has serial Nos. 1 to 184 andthereafter serial No. 561 to 600. The pages in between have conveniently not beenproduced by the appellant/assessee - The Tribunal relied upon incomplete documents -there is an error apparent on the face of record which needs rectification - Furtherwithout producing the relevant pages the appellant ought not to have put forward theargument that they are not included in the Schedule to HUDA - there is an error in theimpugned Final Order which needs rectification - On perusal of the Schedule to theG.O. 274 dated 20.04.2007 the villages Thummaluru and Maheswaram are included inthe Schedule - Therefore, the villages Thummaluru and Maheswaram cannot beconsidered as a rural area - The impugned orders in Appeal Nos. E/2609/2010 andE/2614/2010 are sustained - The Final Order in these appeals are recalled, therebydismissing the appeals - The ROM application is allowed accordingly – (Para 4, 5, & 6).


Karthik Alloys Ltd Vs CCE (Dated: April 28, 2017)

CX – Section 2(d) of the CEA, 1944 - A solitary sale cannot be said to be a normal salein the normal market – Slag not an outcome of manufacture as principal goods – no CEduty leviable – Appeal allowed: CESTAT [para 4]



Tricolite Electrical Industries Ltd Vs CCE (Dated: January 13, 2017)

CX - Assessee is a manufacturer of Custom Built Switchgear Panels and clearing themanufactured goods in domestic market on payment of duty as well as to SEZ underRule 19 of CER, 2002 - They are also clearing goods to EOUs without payment of dutyunder category of CT-3/ARE-3 procedure - Assessee filed various refund claims underRule 5 of CCR, 2004 r/w Notfn 05/2006-CE (NT) on the ground that they are not in aposition to adjust/utilize accumulated Cenvat Credit - Finding of Commissioner (A) isthat assessee failed to fulfill requirement under Rule 5 because their average exportclearance of final products/output services in value terms is much less than 50% oftotal clearance - On a careful reading of the Notification, it is seen that condition ofmore than 50% of clearance of final product/output service has been provided as anexception only for those applicants who would be eligible to file refund claim eachmonth instead of each quarter as in the instant case - Refund of accumulated CenvatCredit cannot be denied to assessee: CESTAT


Steel Authority of India Ltd Vs CCE (Dated: April 3, 2017)

Central Excise - CENVAT Credit on various items denied by the lower authority –Appeal against the same.

Held: Credit is admissible on Railway Track Material, Lighting equipment, fittings andfixtures and Welding Electrodes under Chapter 8311 in the light of precedent orders –(Para 6,9, & 15)

Credit on Refractory cement blocks, plates; Steel Items beam falling under Chapter 72and Misc. other items – Matter remanded as no detailed reasons were given for denialof credit. ( para 12 & 17)


Toyota Kirloskar Motors Pvt Ltd Vs CCE, C & ST (Dated: March 13, 2017)

CX - Assessee cleared certain manufactured auto parts to their sister concern forfurther manufacture and return - Assessments were made provisionally as certainoverheads would be available only on finalization of balance sheet - They worked outdifferential duty and discharged through their cenvat account but they declined to payinterest on such differential duty - Further they stated duty rate of 14% was wronglyadopted instead of 16% and short paid duty which has been debited in cenvat account- To finalize the provisional assessments, personal hearings were held and Assistantcommissioner finalized the assessment and demanded differential duty of Rs.1,84,860/- and appropriated, interest of Rs. 25,729/- was demanded - In case of CEATLtd 2015-TIOL-397-HC-MUM-CX , High Court of Bombay has held in favour of assesseeby holding that it was not possible to read in CER, 2002, liability to pay interest forperiod between provisional assessment and finalization of assessments - Sincedifferential duty was voluntarily paid before finalization of assessments which did notresult in any dues and payable to Govt, interest was not leviable - Impugned order isnot sustainable and same is set aside: CESTAT


Tetra Pak India Pvt Ltd Vs CCE (Dated: March 20, 2017)

CX - Appellant imported raw material under advance licence, however, subsequently itwas observed that the material could not be consumed due to quality problems,therefore, appellant discharged appropriate customs duty, countervailing duty andavailed CENVAT credit - on pointing out, appellant reversed credit availed - SCN issuedand the amount reversed was appropriated; penalty imposed u/r 15 of CCR r/w s.11ACand interest was held recoverable - appellant contesting only the penalty butCommissioner(A) upheld the same - appeal to CESTAT. Held: It is undisputed that theappellant sold the imported materials as scrap on payment of appropriate duty - in theabsence of any finding that the imported goods has not been utilized by the appellantwith intent to evade payment of duty, provisions of s.11AC read with rule 15 of CCR,2004 do not apply in this case - apex court decision in ECE Industries Ltd - 2003-TIOL-89-SC-CX applies - consequently penalty set aside - however, interest liability ariseseven if CENVAT credit is not utilized as held by apex court in the case of Ind-SwiftLaboratories - 2011-TIOL-21-SC-CX - appeal is disposed of by upholding interestliability confirmed by lower authorities, but penalties imposed are set aside: CESTAT[para 4]


CCE Vs Executive Engineer (Dated: March 23, 2017)

CX - ROM filed by Revenue for rectification in Final order wherein in the last sentenceof the order it is mentioned that - "It is also noticed that the Govt. of Maharashtra hasdischarged the interest liability on such refund claims" and which is factually incorrectin view of letter dated 01.07.2017 received from Dy. Commr., Division I, Satara,informing that the Executive Engineer, Regional Workshop, Water ResourceDepartment has not paid any interest till date. Held: Tribunal seems to have made atypographical error inasmuch as there is nothing on record to show that therespondent has discharged interest liability on the refund claims - as refund is not dueto the Govt. of Maharashtra, interest liability for retaining the amount arises -rectification carried out accordingly - Application disposed of: CESTAT [para 5, 6]


CCE Vs Benzo Chem Industries Pvt Ltd (Dated: March 15, 2017)

CX – Refund – Rule 5 of CCR, 2004 – Adjudicating authority observed that goodsvalued at Rs.9.67 crores cleared to Suven Life Science Ltd. located in the domesticmarket were against advance authorization and hence rejected refund of proportionate

CENVAT credit; that refund of rule 5 is available only for the goods exported out ofIndia – Commissioner(A) held that supplies made against advance authorization is inthe nature of ‘deemed export' and exports include ‘deemed exports' also, therefore,refund is admissible – Revenue in appeal before CESTAT. Held: Commissioner(A) hasrightly held that supplies made under deemed exports is also covered under exports -rule 5 provides for refund of unutilized accumulated Cenvat Credit against export ofgoods - Rule 5 does not discriminate between physical exports out of India anddeemed exports supplies made within Indian territory, therefore, in absence of suchdiscrimination, it cannot be said that Rule 5 refund is applicable only for exports ofgoods out of India and not for deemed exports supplies in India – issue is also nolonger res integra in view of Tribunal decision in Super Packs - 2017-TIOL-709-CESTAT-MUM according to which rule 5 refund is admissible on deemed exports – Noinfirmity in the order of the Commissioner(A), hence upheld – Revenue appeals aredismissed: CESTAT [para 4]


DSM Sugar Asmoli Vs CCE (Dated: March 16, 2017)

CX - Assessee is a manufacturer of V.P. sugar and molasses - Whether assessee isentitled to Cenvat credit on various items like Plates, Shape & Section, MS Angles, GPSheet, HR Coil, CR step, MS Channels, Paints and Welding Electrodes procured andused by them as inputs or in manufacture of capital goods, which have been furtherused in their factory for manufacture of excisable goods - Assessee had lead evidencebefore lower Courts that items in question have been utilised for fabrication of mostlyCapital Goods - In view of specific provision in Rule-2 (k) r/w Explanation-2 forallowing Cenvat credit on inputs either used as inputs directly or indirectly inmanufacture of final products or used in factory of production for manufacture offurther capital goods which are further used in factory of manufacturer, Cenvat creditis allowable: CESTAT


Kisan Sahkari Chini Mills Ltd Vs CCE (Dated: March 31, 2017)

CX - Assessee is manufacturer of sugar and molasses and availed Cenvat credit duringperiod from September, 2004 to February, 2005 on items like Asbestos jointing Sheetsand Welding Electrodes - According to Revenue these items are neither capital goodsas per Rule 2(a)(A)(i) nor Rule 2(a)(A)(iii) of CCR, 2004 and Cenvat credit on thesame is not admissible to assessee - Appeal is allowed holding that assessee is entitledto Cenvat credit on Asbestos jointing Sheets and Welding Electrodes used in factory ofproduction for manufacture of excisable goods, as inputs as defined in Section 2(g) ofCCR, 2004: CESTAT


Moongipa Roadways Pvt Ltd Vs CCE (Dated: February 27, 2017)

Central Excise – Penalty on transporter under Rule 26 of the Central Excise Rules,1994 - the appellant had not booked the consignment by the time the officers reachedthe premises and seized the consignment. Various packages were unopened packagesand there is nothing on record to show that the appellant was aware of the contents ofthe said packages and their non-duty paid character. No documents were prepared bythe transporter for the transportation of the said goods - Revenue failed to produceevidence on record to show that the appellant was aware of the contents of the bagsrecovered from their premises or non-duty paid character of the same - No justifiablereasons to impose penalties upon the appellants. Accordingly, same are set aside andappeals allowed with consequential relief to the appellants. ( para 7 & 10)


CCE Vs Frontier (Elec) Press (Dated: May 19, 2017)

CX - No distinct, identifiable commodity emerges out of the process of printingundertaken by the respondent - classification of the Chromo Art paper Rolls afterprinting will remain within the same CSH 4810 13 30 - no justification to chargeCentral excise duty on the printed paper Rolls - Revenue appeal rejected: CESTAT[para 5, 6]



Rewa Fan Industries Vs CCE (Dated: May 1, 2017)

CX - Assessee is in appeal against impugned order whereunder claim of interest onrefund of pre-deposit made pursuant to stay Order dated 27.8.1992 has been denied -In the light of contents of CBEC circulars referred and decisions of Delhi High Court andBombay High Court, it is held that assessee is entitled to interest from the day whenthree-month period expires from day of Tribunal's order dated 27.3.1998 - Revenue'ssubmission that no proof regarding application for refund submitted by assessee is notrelevant for present facts when CBEC in their circular makes a mention that refund incase of pre-deposit is to be made without insisting upon refund applications underSection 11B(1) of CEA, 1944 within period of three months from the disposal ofappeal: CESTAT


S S Organics Ltd Vs CCE, C & ST (Dated: March 16, 2017)

CX - Assessee engaged in manufacture of bulk drugs and drug intermediaries - Theyhave an associated company by name M/s Coral Drugs Ltd., (CDL) which engaged inpellatisation of different bulk drugs - A SCN was issued against assessee allegingclandestine removal of goods and fraudulent availment of CENVAT Credit - Demandconfirmed alongwith interest and penalty - There is no evidence of receipt of anyexcess quantity of raw materials for alleged excess production which departmentalleges to have been clandestinely removed by assessee - Being bulkdrugs/intermediaries department has to establish receipt of raw materials forproduction of goods - There is no evidence of extra usage of electricity or any evidencefor transportation of such clandestinely removed goods - There is no evidence forpayment/receipt of money for excess inputs, extra labour and also payments madefrom buyers end - Allegation of clandestine production and clearance is to be madeonly when department has concrete evidence of un-accounted receipt of raw materials,its consumption and un-accounted production - Clandestine clearance has to besupported by evidence of transportation of material and also flow back of cash -Impugned order set aside: CESTAT


CCE Vs Novaa Paints (Dated: March 7, 2017)

CX - Assessee engaged in manufacturing of paints and varnishes - Revenue allegedthat assessee was liable to pay excise duty u/s 4 of CEA, 1944 as MRP price was notavailable on the containers of paint supplied by the assessee to its buyer - SCN wasissued demanding excise duty with interest & imposed penalty -Held- Goods suppliedby assessee such as paint was considered as input for its buyer as it was applied onthe product manufactured by the buyer to avoid rust or erosion now without doing thisgoods would not be marketed by its buyer - Goods were sold by assessee to the buyerunder the contract / tender price and MRP was not mentioned on the containers ofpaint as per the exemption provided under Rule 34(a) of Standards of Weights andMeasures Act, 1976 - Therefore, goods supplied to the buyer in this case was liable toexcise duty on the total transactional price as per section 4 of the CEA, 1944 - Demandfor excise duty with interest was upheld and since there some genuine confusionregarding the liability of excise duty payable or not payable penalty imposed set-aside:CESTAT (Para 2,3,14,15)


Shree Uma Iron Foundary Vs CCE (Dated: March 7, 20167)

CX - The assessee engaged in manufacture of C.I. Cast - After conducting stockverification of inputs and finished goods, a SCN was issued proposing the demand ofCentral Excise duty along with interest and to impose penalty alleging shortage ofMODVAT inputs in respect of which credit was taken, but not utilized and having beendisposed off by them without payment of CE Duty - The assessee in their reply to theSCN pointed out that stock taking was done without proper weighment - However, theassessee requested to supply the records but did so after about 9 years andsubmission after 10 years of stock verification that weightment was not done correctlywas not accepted - Demand duty along with interest is justified and penalty is setaside : CESTAT


Yerik International Vs CCE (Dated: February 2, 2017)

Central Excise - CENVAT Credit - the appellants are manufacturer and exporter oftractor parts and availed Cenvat Credit against the service tax paid on CHA Agency,DEPB Registration, Port Shipping, Customs Clearing Services, inland Haulage Services,Technical. Handling Charges, Courier Services and Insurance Charges etc paid inrelation to clearances of export consignments - Revenue viewed the same inadmissibleas the services rendered were beyond the place of removal i.e. factory gate; deniedthe credit in adjudication and confirmed demand for recovery with interest andpenalties - In the appeal proceedings both the demands and interest were confirmed;however the first appellate authority gave the option of paying 25% reduced penalty, ifpaid within 30 days from the receipt of the order - The appellant firm is aggrieved bythe demand, interest and penalty, while Revenue is aggrieved that the Commissioner(Appeals) has no power to reduce the penalty to 25%.

Held: Commissioner (Appeals), in the impugned order has referred to the CBECCircular dated 23.08.2007, extracted the same and simply concluded that the place ofremoval is factory gate without giving any reason for his conclusion or analysis of thecircular - He has further observed that the appellants have not brought anything onrecord to show that the clearance of exempted goods was on FOB basis - withoutexamining the relevant documents, Commissioner (Appeals) could not have come to aconclusion as to the place of removal - Admittedly, these documents which have beenproduced before the Tribunal were not before the Commissioner (Appeals) - It will,therefore, be in interest of justice that the documents, which the appellants have nowproduced to substantiate their plea, are submitted before and examined by theCommissioner (Appeals) to record proper findings giving the basis for arriving at thesame - The matter is therefore remanded back to Commissioner (Appeals) to examinethe documentary evidence submitted by the appellants in support of their claim thatthe export was on the FOB basis and to pass a fresh order in accordance with law.[Para 5, 7].

cestat ruling (central excise) · 2018-10-02 · cestat ruling (central excise)...

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