cestat ruling (central excise) -...

CESTAT RULING (CENTRAL EXCISE)

2016-TIOL-1743-CESTAT-MUM

Trinity Agencies Vs CCE (Dated: June 27, 2016) CX - Supplies made to SEZ are treated at par with physical exports made out of India and all benefits and incentives are available even before issue of Notfn. 50/2008-CE(NT) - balance lying in CENVAT account on closure of unit entitled for refund u/r 5 of CCR, 2004: CESTAT [para 6]

Also see analysis of the order 2016-TIOL-1742-CESTAT-DEL

CCE Vs Ujala Electricals Ltd (Dated: January 21, 2016) CX - Appeal filed by revenue against order of Commissioner (A), wherein it is held that refund should be granted to assessee and appropriation of said amount against dues of Shri V.K. Madan and others is not legally sustainable - Assessee is a Limited Company and Shri V.K. Madan is purportedly Chief Advisor of assessee's company - Various allegations have been made against assessee and also against Shri V.K. Madan, which are not directly relevant to decide the issue in hand - There is absolutely nothing which will throw light upon legality of such appropriation done by Original Authority - Appeal itself is devoid of merit without any factual or legal ground, hence, dismissed: CESTAT

2016-TIOL-1741-CESTAT-DEL

Taj Sats Air Catering Ltd Vs CCE (Dated: January 11, 2016) CX - Manufacture - Assessee entered into catering agreement with various airlines for supply of meal and food items in accordance with menu given by respective airlines - They prepare roti, rice and curry and put it in bowl or tray, wrap them with aluminium foil and supply in a trolley separately to airline - In another set of tray they supplied various bought out items like cut fruits which do not require pre-heating before service - Logo and name of assessee in a label is placed inside cutlery pouch again supplied separately not with prepared food items like dal, rotti - Food items prepared and supplied by them never had brand-name when they were cleared from premises of assessee - Revenue has not established liability on assessee for their activity of manufacturing branded food preparations - As such demand is not sustainable on this ground.

Limitation - SCN was issued on 23.02.2010 for period covering 01.02.2005 to 03.05.2006 - Notice has been issued after many years invoking extended period of time on ground that assessee suppressed the fact about illicit removal of impugned goods with intend to evade payment of CE duty - There is no supporting evidence to allege fraud, suppression with intend to evade payment of duty on part of assessee - Demand after many years of impugned period is not sustainable: CESTAT

2016-TIOL-1740-CESTAT-KOL

CCE & ST Vs Tata Pigments Ltd (Dated: April 29, 2016) CX - Whether Cenvat credit is admissible to assessee for GTA service tax paid by them when goods are manufactured by job worker and cleared on payment of duty from factory premises of job worker - As per definition of 'Input service' given in Rule 2 (l) of CCR, premises of job worker is 'place of removal' and not the depot of principal manufacturer, therefore, Cenvat credit of ST paid by assessee upto place of removal will be admissible - At the same time, ST paid by assessee for transportation of goods from job workers premises (place of removal) to Depots of assessee has to be treated

as services availed beyond place of removal as there cannot be two manufacturers and two 'place of removals' for same goods - Matter is of interpretation of provisions of CCR, when a part of ST credit has been held to be admissible to assessee, therefore, extended period of 5 years cannot be invoked under Rule -14 of CCR, 2004 r/w proviso to section 11A(1) of CEA, 1944 and demand has to be restricted to normal period of limitation with respect to CENVAT Credit availed by assessee for transportation services availed from factory premises of job worker to depot of assessee - Matter remanded: CESTAT


Teracom Ltd Vs CCE & ST (Dated: June 27, 2016) CX - Main assessee is located in Pant Nagar, Uttrakhand and availed area based exemption under Notfn 50/2003-CE - It is alleged that they were not manufacturing goods in their unit at Uttrakhand - SCN has been issued by Assistant Commissioner, Sikar, Rajasthan - In terms of jurisdiction of various officers as notified by Ministry of Finance in terms of power conferred by sub-Rule (2) of Rule 3 of CER, 2002, assessee fall under jurisdiction of Meerut-I Commissioner - Assis tant Commissioner Sikar who is falling under jurisdiction of Commissioner at Jaipur in Rajasthan has no jurisdiction or power to initiate action against assessee unit - If seized goods were not manufactured by assessee in their Pant Nagar unit, question of claiming or denying area based exemption on such goods does not arise - SCN and proceedings consequent upon said notice are without jurisdiction and, hence, impugned order is not sustainable: CESTAT

2016-TIOL-1738-CESTAT-HYD

Indian Hume Pipes Co Ltd Vs CC, CE & ST (Dated: January 4, 2016) Central Excise - Valuation - Freight Charges - Appellant is a manufacturer of pipes - Revenue took view that since appellant's contract for sale of pipes and their laying at site is a composite contract, sale is complete at site and so cost of transportation charges should be included in the assessable value - Original authority set aside the demand by observing that the point of sale/place of removal is factory gate and the work of laying pipelines result in immovable property and is nothing but the activity of erection and commissioning, charges for which are not includable in the assessable value of excisable goods - However, on appeal by Revenue, Commissioner (A) passed the impugned order holding that deduction of freight cost is not available as the same is not shown separately in sale invoice - It is seen that the Revenue filed the appeal against OIO on the ground that the abatement of transportation cost from the place of removal to the place of delivery is available during the demand period, but it is only when the same is shown separately in the invoice and since assessee had not shown it separately, deduction in terms of Rule 5 of Valuation Rules is not available to assessee - Tribunal in appellant's own case has held that freight charges are permissible for deductions from assessable value even when the freight amount has not been shown separately in the sale invoice - Hence considering the findings of original authority and the precedent, impugned order is not sustainable and is set aside - Appeal allowed. [paras 1, 3, 4, 5, 7]

2016-TIOL-1737-CESTAT-MAD

Varadhalakshmi Mills Ltd Vs CCE (Dated: September 22, 2015) Central Excise - Demand - appellants are manufacturers of Cotton yarnand man made staple fibre yarn, and are required to pay excise duty on fortnightly basis in accordance with Rule 173-G(1) of CER, 1944 - duty demand [under Rule 8(3A) of CER 2001] with interest and penalty adjudicated, upheld by Commissioner (Appeals) who granted part relief on penalty to second appellant; and agitated herein.

Held: the issue in all these appeals relates to whether appellants have not paid central excise duty on consignment basis during default period and also utilized cenvat credit for payment of duty against the provisions of Rule 8 (3A) of CER - Adjudicating

authority invoked the provisions of Rule 8 (3A) of CER 2002 and confirmed the demands and also appropriated the amount already paid in P.L.A. towards payment of duty - The High Court of Madras in the case of Malladi Drugs & Pharmaceuitcals Ltd. Vs UOI and A.R. Metallurgicals Pvt. Ltd., in a batch of writ petitions; concurred the Gujarat High Court judgement in the cases of Indusur Global Ltd. and Precision Fasteners Ltd; and struck down Rule 8(3A) as ultra vires. [Para 6]

The Gujarat HC ruling in the precision Fasteners case is squarely applicable to the instant appeal - Both Gujarat and Madras High Courts have held that condition contained in Rule 8 (3A) of Central Excise Rules 2002 for payment of duty "without utilisation of cenvat credit" is contrary to the scheme of availment of cenvat credit under CCR; that the said Rule 8(3A) is arbitrary and violative of Article 14 of the Constitution; and struck down the Rule 8(3A) as unconstitutional - several pronouncements were subsequently made, following the ratio of the HC rulings - following the same, the demand of duty under Rule 8(3A) and penalty imposed in the impugned orders is found to be unsustainable and liable to be set aside. [Para 7, 8, 9, 10]


Heg Ltd Vs CCE (Dated: June 2, 2016)

CX - Penalty - Assessee was availing Cenvat Credit on ST paid on common input services, which were being utilized by them for generation of electricity - As a part of said electricity was being wheeled out by them, Revenue views that they have to reverse proportionate credit - Supreme Court's decision in case of Maruti Suzuki Ltd. 2009-TIOL-94-SC-CX which held against the assessee itself set aside the penalty imposed upon them - Thus, penalty is set aside: CESTAT

2016-TIOL-1733-CESTAT-ALL

CCE Vs Kanohar Electricals Ltd (Dated: May 16, 2016)

CX - COD of 1318 days - As per ruling of Supreme Court, Tribunal has authority to condone the delay in filing appeal - Principle Bench of Tribunal has held that for condonation of delay there should be sufficient cause - When Commissioner of Central Excise, Meerut in his application for condonation of delay has not given any explanation to establish that there was sufficient cause for delay in filling appeal beyond the normal period, application for condonation of delay is dismissed: CESTAT


Bharat Pumps And Compressors Ltd Vs CCE (Dated: November 19, 2015) CX - Issue is regarding disallowance of credit of Rs. 29,184/- taken on basis of carbon copy of bill of entry - First appellate authority refers to copy of bill of entry in which entries are found to have been imprinted using carbon interleaves that was the practice in customs during relevant period - Original and duplicate copies of bill of entry are retained in Customs House for its own closure transactions and importer is in custody of triplicate and quadruplicate copies - Since these were, by nature, carbon imprints and original remains with Customs House, there is no reason to deny credit taken on a triplicate copy of bill of entry when connected provision in MODVAT rules refers merely to 'bill of entry' - Thus, disallowance is without any basis and is set aside: CESTAT


CCE & ST Vs Sarda Energy And Minerals Ltd (Dated: May 25, 2016) CX - Appeal filed by revenue on the ground that Cenvat credit on various MS items shall not be allowed to assessee as they are used only as supporting structures to

support boilers, its components and accessories - Commissioner (A) has recorded a finding that they are not supporting structures of plant and machinery or for laying foundation - Tribunal have also perused various invoices issued by supplier and photographs of actual nature of disputed structures - Boiler and its components are huge capital goods wh ich require lot of interconnected fabrication for their operation as well as their upkeep - Partwise segregation of such a capital goods like a boiler is not technically tenable for separate identity - There is no reason to interfere with impugned order on merits.

Goods like cement and steel items used for laying foundation and for building support structure cannot be treated either as inputs for capital goods or as inputs - It is not tenable to hold that assessee suppressed material facts and intended to e vade payment of duty - Further, assessee have been filing statutory returns with full particulars which also included disputed credits - As such, demand is also hit by time bar: CESTAT


Tata Steel Ltd Vs CCE (Dated: May 11, 2016) CX - Whether assessee has correctly calculated duty liability of Rs. 6,35,26,796/- based on remittances made to JPC or duty liability should be Rs. 11,17,74,702/- as calculated by Adjudicating authority - As per Minutes of Emergency meeting held by J.S. GOI on 16/1/92, r/w Notfn dt 16/1/1992, procedure prescribed all member Steel Plants, including assessee were required to remit JPC levies to Joint Plant Committee - Department was not right in asking assessee to provide certain information on production & clearances made or to calculate JPC levies from figures available in periodical RT-12 returns filed with department - Department had ample powers under statute to Summon & Call for necessary documents and that in absence of any documentary evidence, higher demand is prima facie not sustainable - Assessee should have produced either a certificate from JPC to effect as to how much JPC levies was remitted by assessee during relevant period or produce a chartered / cost accountant certificate indicating basis of calculating duty liability of Rs. 6,35,26,796/- - Matter remanded back to adjudicating authority as demand of Rs. 11, 17, 74,702/- calculated by department is not sustainable: CESTAT


Apk Steel Re-Rolling Mills Vs CCE (Dated: June 17, 2016) CX - Rule 96 ZP (3) of CER, 1944 - As the Apex Court in Shri Bhagavathy Steel Rolling Mills 2015-TIOL-283-SC-CX has struck down the provisions of rule 96ZP of CER, 1944 which empower the revenue to collect interest and propose penalty, question of recovering the same from the assessee does not arise - Interest and penalty set aside but duty liability upheld - Appeal disposed of: CESTAT [para 4]


Fedders Lloyd Corporation Ltd Vs CCE (Dated: May 18, 2016) CX - Whether value of ECP to be added in value of RMPU for discharging duty liability - Assessee engaged in manufacture of Roof Mounted Package units (RMPU) and Electric Control Panels (ECP) for supply to Indian Railways for air-conditioning the railway coaches - RMPU is an air-conditioning machine falling under heading 8415 and ECP is an Electric Control Panel falling under Heading 8537 - Merely because, these two items were designed for a combined working after installing them on railway coaches does not automatically mean that value of one should be added in other for Central Excise purpose - No merit found in impugned order and accordingly, same is set aside: CESTAT


Jindal Stainless Steelway Ltd Vs CCE (Dated: January 6, 2016) CX - section 2(f) of CEA, 1944 - Manufacture - whether process of cutting/slitting of cold rolled or hot rolled stainless steel coils/plates of various length, width and thickness into coils of specific width as also de-coiling of such cold rolled or hot rolled stainless steel coils/plates and cutting them into sheets of specific dimensions is manufacture and if not whether appellant is entitled to take CENVAT credit on various inputs. Held: In appellants own case it was held by Tribunal - 2014-TIOL-1677-CESTAT -MUM that the activity is manufacture and credit was allowed - also, in another case of the appellant, relying upon this order of Tribunal, proceedings were dropped - Even if it is held that the activities of the appellant is not amounting to manufacture, CENVAT credit availed on the inputs and utilized for payment of duty on the processed goods cannot be disputed in terms of Rule 16 of Central Excise Rules, 2002 - impugned order set aside and appeal allowed: C ESTAT [para 5]


CCE Vs New Color Screens Pvt Ltd (Dated: May 13, 2016) CX - Issue is regarding classification of Light Boxes/glow signs being manufactured by assessee - Commissioner (A) rejected the appeal filed by Revenue on the ground that same was not maintainable inasmuch as same was required to be filed by Addl. Commissioner only, who adjudicated the case - There are two streams of views on said disputed legal issue but Tribunal would like to make reference to two decisions, one in case of Blue Star Spinning Mills Ltd. - 2005-TIOL-52-CESTAT-DEL where Supreme Court's decision in case of M.M. Rubber Co. 2002-TIOL-111-SC-CX was referred to and was distinguished - On the other hand, Tribunal in case of Metro Steel Rollins Mills referred to same decision of Supreme Court in case of M.M. Rubber Co. 2002-TIOL-111-SC-CX and held in favour of assessee - As interpreted and applicability of Supreme Court's decision in case of M.M. Rubber Co. is diffe rent, matter needs to be resolved by Larger Bench: CESTAT


CC & CE Vs Jaiswal Steels Enterprises Pvt Ltd (Dated: June 02, 2016) CX - Assessee engaged in manufacture of excisable goods for supply to various Circles of Department of Telecommunications (DoT) and its successor BSNL - Revenue seeks to disallow deduction for freight on the ground that freight indicated was equalised freight and hence not actual transportation charges - Since the delivery is FOR destination, case will fall under Section 4(1)(b) of CEA, 1944 - As per Rule 5 of CEVR, 2000, when goods are sold for delivery at a place other than place of removal, transaction value of excisable goods shall not include actual cost of transportation from place of removal up to place of delivery of such excisable goods - Held: place of removal is factory gate, howe ver goods were delivered at customer place - Therefore goods were sold for delivery not at place of removal but at other place i.e. customer door step - It is clear from terms of bid documents also that basic price and other components have to be indicated separately - Thus, there is no dispute that basic price and freight components are clearly indicated separately in invoices - No valid reason found for disallowing the deduction for freight paid inasmuch as goods are FOR destination: CESTAT


Tilaknagar Industries Ltd Vs CCE (Dated: May 16, 2016) CX - Appellant engaged in the manufacture of dutiable as well as exempted products - On exempted product they were reversing the Cenvat Credit attributable to the inputs on a proportional basis, though they had not exercised this option in writing in terms of 6(3A)(a) of CCR - SCN issued alleging that the appellant were not entitled to follow the procedure of Rule 6(3)(ii) and were therefore required to pay @ 10% of the value of exempted goods - demand confirmed & upheld by Commissioner (A) - appeal to CESTAT. Held: As per amended Rule 6(3)(i) & (ii) read with sub-rule (3A), option is

available to the assessee whether to pay 10% of the value of the exempted goods or to pay equivalent Cenvat Credit attributable to the input used in the exempted goods - Department has no say which option has to be availed by the assessee - option exercised by appellant is not incorrect - At the most, if any lapse is there, that is, appellant have not given written option to the department - this is only a procedural lapse and for such procedural lapse, appellant cannot be fastened with demand of 10% of the exempted goods - as payment made by appellant is in order, no further demand could have been made - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 6]


Vishnu Dyeing And Printing Works Vs CCE (Dated: June 3, 2016) CX - SCN seeking recovery of erroneous refund was decided by order dated 23.8.2013 by the Dy. Commissioner confirming recovery of the refund of Rs. 3 lakhs - On an appeal by the appellants, the Commissioner (Appeals) upheld by the order of the original adjudicating authority - Appeal to CESTAT. Held: Against pre -deposit of Rs.3 lakhs made during investigation as there is no confirmed demand, therefore, the same has been rightly refunded - Appeal allowed: CESTAT [para 4]


Forace Polymer Pvt Ltd Vs CCE & ST (Dated: May 24, 2016) CX - Assessee was availing cenvat credit of duty paid on capital goods and input services - Revenue views that assessee availed cenvat credit of ST paid on GTA services on outward transport and same is not permissible as sale was on ex-factory basis - In respect of assessee's own case, for subsequent period, Commissioner (A) held that delivery was FOR destination basis and insurance was to be done at vendor's cost and as such, evidencing that property in goods passed on from assessee to buyer at buyer's end - Considering the large number of decisions holding in favour of assessee regarding entitlement of cenvat credit on outward transportation and also considering that in assessee's own case, matter was decided in their favour, it is found that impugned order cannot be sustained - Impugned order is set aside and appeal allowed: CESTAT


Mitc Rolling Mills Pvt Ltd Vs CCE & C (Dated: June 21, 2016) CX - CENVAT - Evidences unearthed by the department in investigation are several and overwhelming and each piece of evidence corroborated the other - once the department by way of evidence has shown that the transactions are not genuine, the onus of proving that the transactions are genuine lay on the appellants which they had failed to do miserably - credits taken on duplicate/parallel invoices/vehicles shown in invoices as per RTO report were non-transport vehicles viz. scooter, motor cycle etc./invoices issued by dealers based on ship breakers' invoices who had shut shop long ago - payment through banking channel in such manipulated transactions is a part of the manipulation only and it does not prove genuineness of the transaction - it is established that appellant has availed cenvat credit fraudulently without receipt of goods - credit rightly denied - Appeals dismissed: CESTAT [para 6, 7]


New Bombay Ispat Udyog Pvt Ltd Vs CCE & C (Dated: June 16, 2016) CX - CENVAT - Appellant engaged in manufacture of M S Ingots - allegation that two dealers Simandhar Enterprises & Simandhar Steelmovers (I) Pvt. Ltd. were passing on fraudulent CENVAT credit to various manufacturers including appellant without supply of MS Scrap - credit denied, penalties imposed etc. - appeals to CESTAT. Held: On identical facts and under same investigation in many other cases, demands were

confirmed - in the case of Mahindra Ugine Steel Co. Ltd. vs. CCE, Raigad & M/s Vipras Castings Ltd - 2015-TIOl-1454-CESTAT -MUM, the facts, investigation and modus operandi of the appellants as well as the so called dealer M/s Simandhar Enterprises & M/s. Simandhar Steelmovers (I) Pvt. Ltd. are same, therefore, the most of the material evidences are common - In the above decisions, important fact has been established that all the invoices issued by M/s. Simandhar Enterprises & M/s. Simandhar Steelmover(I) Pvt. Ltd. are fake and without receipt and supply of the material - impugned order denying credit sustains - regarding non-observance of principles of natural justice, it is found that all the common evidences have been tested by Tribunal in other cases and arrived at a conclusion that all invoices issued by the said dealers are fake and without receipt and supply of goods, therefore, plea of appellant has no meaning - Impugned order upheld and appeals dismissed: CESTAT [para 8, 9]


Patliputra Industries Ltd Vs CCE (Dated: January 21, 2016) CX - Assessee is in appeal against three issues one of which is confirmation of demand and penalty on quantity of goods shown in respective small chits/papers - Merely because entries mentioned in rough chits did not tally with production/clearance register would not by itself lead to a conclusion that quantity of goods mentioned in those private chits were cleared without payment of duty - In absence of cogent and corroborative evidences showing production and removal of goods without payment of duty, entries reflected in private chits cannot itself be a ground for confirmation of demand - Therefore, confirmation of demand on this count is set aside

2016-TIOL-1708-CESTAT-CHD

CCE Vs Jayhshin Ltd (Dated: May 19, 2016) CX - Allegation against assessee is that they engaged in large scale of clandestine removal of goods and suppression of production - During course of investigation, nothing incriminating was found at premises of assessee and accounts of stock was found in order - M/s SVTC being sole selling agent or distributor of assessee was presumed by Revenue that M/s SVTC is dealing only and only with goods manufactured by assessee - M/s SVTC is not exclusively dealer of appellant and exclusively selling goods manufactured by assessee but purchasing of goods from local market and selling thereof and therefore, it cannot be said that all clearances made by M/s SVTC are of goods manufactured by assessee - There is no other evidence produced by Revenue to allege that assessee is engaged in activity of clearance of clandestine removal of goods - Duty cannot be demanded merely on basis of turnover of their dealer - No infirmity in impugned order, same is upheld: CESTAT


Ellenbarrie Industrial Gases Ltd Vs CCE (Dated: April 6, 2016) CX - Penalty - Assessee has furnished C.A. certificates as ditrected with respect to CENVAT Credit required to be reversed under provisions of Rule 6 (3A) of CCR, 2004 - Amounts calculated by assessee have not been verified by adjudicating authority as same were not produced before lower authorities, thus, in interest of justice, order passed by first appellate authority is set aside and matter is remanded to adjudicating authority for verifying CENVAT Credit reversed by assessee under provisions of Rule 6 (3A) of CCR, 2004 - No malafide can be attributed on part of assessee as reversal of CENVAT Credit is only a calculation exercise for which penalties are not imposable - Accordingly, penalties set aside: CESTAT


Kiran Foundry Works Vs CCE (Dated: April 21, 2016)

CX - Assessee was manufacturing dutiable casting as well as exempted agricultural machinery parts - During period 2006-07 and 2007-08, assessee has not availed any credit on inputs which has gone into manufacture of final exempted goods - Such intimation was also sent by assessee to department and this fact is evident from SCN itself - Question of proportionate reversal of credit during period 2006-07 to 2007-08 does not arise as assessee has not availed any credit attributable to inputs gone into manufacture of final exempted goods - Provisions of Rule 6(3) have no application to facts of case - Assessee cannot be asked to pay an amount equal to 10% of value of exempted goods - Impugned order set aside and appeal allowed: CESTAT 2016-TIOL-1702-CESTAT-CHD

Sohana Woollen Mills Pvt Ltd Vs CCE (Dated: May 11, 2016) CX - Clandestine removal - It is the case where one Shri Anil Kumar, proprietor of M/s Jagan Nath Chanan Ram stated that he is purchasing goods against katcha slips/challans from assessee - He has produced certain katcha slips/challans to Revenue during course of recording of statement against summon - When name of receiver or to whom these have been issued has not been mentioned anywhere in said challans/katcha slips, then it cannot be said that assessee has issued these katcha slips/challans unless and until genuineness of these katcha slips/challans is verified - Merely making some deposit during course of investigation on persuasion of departmental officers does not corroborate that assessee has cleared goods clandestinely - Entire demand of duty alongwith interest and penalty are set aside - No penalty is warranted on Shri Rajender Singh, managing director of assessee: CESTAT 2016-TIOL-1701-CESTAT-DEL

Super Threading India Pvt Ltd Vs CCE & ST (Dated: August 11, 2015) CX - Allegation against assessee availing excess rebate claim by over valuation of export goods - Main stress of adjudicating authority is that assessee is issuing parallel set of invoices, one to ICC and one to Customs - Assessee has admitted said fact and he has explained that invoices issued to ICC for purpose of issue of certificate of country of origin only - They also produced CAS4 to arrive at value of export goods but credence of said certificate has not been given by Adjudicating Authority in impugned order - Impugned order does not reveal whether any market survey has been done to arrive at correct value of export goods - Assessee has made out a case of waiver of pre deposit: CESTAT

Clearance of inputs clandestinely without reversing Cenvat Credit thereon - It is an admission of Managing Director himself, that certain inputs have gone in pilferage and certain amount of input have not been received back from job worker and job worker were not doing job work under notfn 214/86 - Assessee is directed to make a pre deposit of 7.5% of duty confirmed: CESTAT


CCE Vs Sarthek Enterprises Ltd (Dated: February 25, 2016) CX - Whether freight element or cost of transportation incurred after point of removal of goods from factory gate is to be included in value of goods or not - There are two separate contracts, one is for sale and another is for transportation, packing, forwarding and insurance purposes - One cannot say that sale of goods was not completed at factory gate - Another contract for transportation, packing, forwarding and insurance is only for purposes of those activities, which are mentioned in said

contract and in respective invoices as there are separate invoices in this regard - As per Chandra Metals Pvt.Ltd. 2014-TIOL-797-CESTAT -DEL , cost of transportation from place of removal to place of delivery, is not to be included in assessable value, even there cost of transportation has been calculated on average basis - When there are separate contract for sale of goods and for transportation, it is held that said transportation charges can not be included in assessable value of goods for purposes of computation of Central Excise duty: CESTAT


Rallis (India) Ltd Vs CCE (Dated: June 10, 2016) CX - Valuation - While clearing chemicals to independent buyers, appellant discharging the duty liability based on the transaction value/normal price and the same price is adopted while clearing goods to sister concern - Revenue contending that since clearance to sister concern is not a sale, hence appellant is required to discharge the duty liability on the value arrived at by considering the cost of production and profit margin - appeal to CESTAT. Held: The entire co ntroversy and the demand can be decided by only one question as to whether the demand raised is of revenue neutral nature and accordingly, the extended period for demand of the duty liability can be invoked or otherwise - since duty payable on the products at serial number 1 to 5 is conceded, the same is upheld with interest - balance demand is on product Ethion Technical for the period April 1999 to March 2002 & SCN issued in March 2004 - It is undisputed that the product in question is cleared to their own sister concern and the sister concern is eligible to avail the cenvat credit of the duty paid by the appellant - If that be so, there cannot be any mens rea attached to the clearances made by the appellants to the sister concern and discharge of duty by adopting a particular assessable value - in view of revenue neutral situation, demand and interest liability is unsustainable - since issue is of interpretation, no necessity to visit appellant with penalty - Appeal disposed of: CESTAT [para 7, 8, 9]


CCE Vs Relief Laboratories Pvt Ltd (Dated: June 7, 2016) CX - Valuation - respondent is a manufacturer of various pharmaceutical products and has also undertaken to produce medicaments on behalf of Maharashtra Antibiotics & Pharmaceuticals Ltd. (MAPL) under loan licence agreements - respondent procuring raw materials himself and discharging duty liability based upon the cost of production and profit margin - Revenue alleging that CE duty needs to be discharged on the prices at which MAPL sells the goods to their dealers - Commissioner(A) setting aside demand, therefore, Revenue in appeal to CESTAT. Held: There is no merit in the appeal filed by Revenue as it is undisputed that the respondent is functioning under loan licence agreement from MAPL - findings recorded by first appellate authority are not controverted effectively by Revenue - similar issue came up in the case of Group Pharmaceuticals - 2010-TIOL-33-CESTAT -BANG & Cosme Remedies - 2005-TIOL-262-CESTAT -MUM wherein the Tribunal held in favour of assessee holding that the loan licence is a manufacturer and the value as per the contract entered into needs to be considered as a normal value/transaction value - no merit in appeal filed by Revenue, hence rejected: CESTAT [para 6, 7]


Asian Paints Ltd Vs CCE (Dated: June 7, 2016) CX - Appellant had during the period 01/04/2000 to 21/02/2003 cleared Cenvatted inputs to their sister unit on reversal of credit availed and to independent buyers in a

similar manner - Case of the department is that the inputs cleared as such to their sister unit needs to be valued at the prices at which sale was made to independent buyers and duty is to be discharged accordingly - adjudicating and lower appellate authority upholding demand, hence appeal. Held: Supreme Court in the case of Ispat Metallics - 2016-TIOL-59-SC-CX has held that when the inputs are transferred to a sister unit, it is reasonable to adopt the value shown in the invoice on the basis of which CENVAT credit was taken by the assessee - ratio squarely covers the issue in favour of the appellant herein - Impugned order are unsustainable and hence set aside - appeal is allowed with consequential relief: CESTAT [para 8, 9]


CCE Vs Ojaswi Marble And Granite Pvt Ltd (Dated: May 4, 2016) CX - Manufacture - Assessee engaged into cutting and sowing of marble blocks into slabs / tiles of various sizes - Issue is squarely covered by decision of Supreme Court in Aman Marble Industries Pvt Ltd. 2003-TIOL-18-SC-CX , wherein it was held that process of cutting and polishing stone into slabs is not a process of manufacture for obvious and simple reason that no new and distinct commercial product came into existence - Revenue's case is that assessee was actually converting stone into slabs and tiles, in which case same would amount to manufacture - There is no evidence on record to show that slabs cleared by assessee were actually tiles - No merits in Revenue's stand, therefore, appeal is rejected: CESTAT

2016-TIOL-1691-CESTAT-MUM ALF Engineering Company Vs CCE (Dated: June 27, 2016)

CX - CENVAT/MODVAT - Since invoice received from dealer showed description of goods as HR/CR coils whereas appellant had received HR/CR sheets, credit denied - Appellant directed to produce correlation between HR/CR coils received by the dealer and HR/CR sheets supplied to the appellant after cutting of the coils - Matter remanded: CESTAT [para 6] Also see analysis of the order


CCE Vs Niranjan Decoflocks Pvt Ltd (Dated: May 19, 2016) CX - Reversal of credit - Assessee opted to avail of exemption under Notfn 30/2004-CE which provided exemption to product manufactured by them - Prior to opting this exemption, they were availing Cenvat credit - Revenue was asked to produced if there was any ru le at material time which requires reversal of credit - Rule 9(2) of CCR, 2002 prescribed reversal of credit only in case where exemption based on value or quantity of clearances in a financial year - Decision of larger bench of Tribunal in case of Ashok Iron and Steel Fabricators 2002-TIOL-274-CESTAT -DEL-LB is squarely applicable to instant case - Grounds of appeal do not contradict this averment - If assessee have used inputs on which credit was taken only on dutiable finished goods, question of invoking Rule 6(1) does not arise: CESTAT


Perfetti Van Meele India Ltd Vs CCE (Dated: May 5, 2016)

CX - Input service credit has been denied to assessee for Courier services and record

keeping charges service - Assessee has explained uses of courier services for procurement for small engineering items, raw material and testing equipment - As usage has not been contravened by tangible evidence by revenue, courier services availed by assessee are related to manufacturing activity, therefore assessee has rightly availed cenvat credit on courier services charges.

As regards to record keeping charges, it is found that these records are part of accounting and auditing to assessee and accounting or auditing service forms part of Rule 2(l) of CCR, 2004 - Therefore, record keeping charges are entitled as input service - Impugned order denying cenvat credit on record keeping is set aside: CESTAT


Lifelong Meditech Ltd Vs CCE & ST (Dated: May 11, 2016) CX - Warehouse has been used by assessee for storage of raw material and finished goods which is a registered place for removal goods, thus storage of goods is an integral part of manufacturing - As regard to Project for Modification/ Modernisation Services, these services are none other than a renovation of factory premises which is covered by Rule 2(l) of CCR, 2004 - Assessee is compulsory required to maintain a garden in their factory to pollution control norms, therefore, horticulture services are directly related to manufacturing activity.

Courier service has been used by assessee for various correspondences made with suppliers of goods, without these correspondences, assessee cannot do their business - Therefore, courier service is an integral part of their activity - Transportation service has been used by assessee for marketing/ sales, which is directly related to manufacturing activity.

In view of above observations, it is hold that assessee is entitled to avail cenvat credit on all services which are in dispute - Therefore, impugned order deserves no merit and same is set aside: CESTAT


Ashoka Spancers Pvt Ltd Vs CCE (Dated: March 10, 2016) CX - Credit on Light Diesel Oil availed by assessee during period 1996-97 to 2002-03 denied on premise that as per Rule 57G(5) of erstwhile CER, 1944, assessee was required to take credit within a period of six months on inputs in factory - Assessee is entitled to take credit within six months of receipt of goods in their factory under cover of invoices during period 1996-96 till 1.4.2000 and also under cover of invoices no credit has been taken within six months, therefore, assessee is barred to avail credit on inputs namely LDO received during said period - Rules were amended in 2003 wherein 57A(c) was introduced as per said rule credit may be taken immediately on receipt of inputs admittedly there was no bar to avail credit nor time period in that circumstance , if assessee has taken the credit after 1.3.2003, assessee is entitled to avail credit - This fact has to be verified from records of assessee whether during period 1.4.2000 till 1.3.2003 whether assessee has availed credit on LDO or not - Therefore, impugned order is set aside and matter is remanded: CESTAT


Shakti Organic Chemical Industries Pvt Ltd Vs CCE (Dated: May 18, 2016) CX - Assessee engaged in manufacture of Glycol - In some cases, their customers

bring packing materials themselves, in which case assessee is charging only cost of Glycol - In such cases, duty is being paid by assessee only on price of Glycol - Revenue views that even in such cases, where their customers bring their own plastic containers, amortized cost has to be added in assessable value of Glycol - Amendment to Section 4 of CEA, 1944 w.e.f. 1.4.2000 has been held to be irrelevant for purpose of deciding the issue involved, which stands decided in precedent decisions of Supreme Court and applicability of the same for period subsequent to 1.4.2000 has been upheld - No merits in observation made by Commissioner (A), accordingly impugned order set aside: CESTAT


Pithampur Tools Pvt Ltd Vs CCE (Dated: August 17, 2015) CX - Cenvat credit was disallowed on ground that invoices basing on which credit has been taken pertains to period prior to obtaining CE registration and since no transitional provisions have been provided in respect of input services in Rule 3(2) of CCR, 2004, taking of cenvat credit is not in conformity with law - Rule 3(1) of Rules is enabling provision, which entitles a manufacturer to take cenvat credit of duties and taxes paid on input, capital goods and input services received by manufacturer - On perusal of CCR, 2004, it reveals that no restrictions have been imposed providing for not taking cenvat credit prior to obtaining CE registration - In absence of any specific prohibitions contained in Cenvat Statue to that effect, cenvat credit cannot be denied to assessee: CESTAT


Hindustan Petroleum Corporation Ltd Vs CCE (Dated: May 3, 2016) CX - Application filed by assessee seeking rectification of what it termed as a typographical error that crept in preamble of CESTAT Order No. A/352-364/2012-EX(BR) dated 12.3.2012 - Said correction has been sought by assessee because Appeal No. 1093/2008 arose out of order in original No. 10/2008 dated 28.2.2008 which did not find mention in preamble of aforesaid CESTAT order - It is a fact that Appeal No. E/2988/2007 arose out of order in original No. 21/10/Comm/RP/07-CE dated 13.8.2007 passed by Commissioner, Central Excise, Rohtak and Appeal No. E/1093/2008 arose out of order-in-original No. 10/2008 dated 28.2.2008 passed by Commissioner of Central Excise, Delhi-I - It cannot be disputed that preamble recorded in CESTAT order suffers from obvious mistake inasmuch as it in effect states that both these appeals (E/2988/2007 and E/1093/2008) arose out of order-in-original No. 21/10/Comm/RP/07-CE dated 13.8.2007 passed by Commissioner of Central Excise Rohtak - Assessee is not seeking any amendment to "order" or rectification of any mistake in "order", mistake is as recorded in preamble part of order, therefore, it does not tantamount to amending "order": CESTAT


CCE Vs Excellent Gravure Industries Pvt Ltd (Dated: April 5, 2016) CX - Assessee has short paid duty on certain goods due to clandestine removal of finished goods - Same was admitted by assessee and paid in August, 2009 - Same amount was included in a total refund of Rs.3,56,516/- filed by assessee for month of August, 2009 under Notfn 32/99-CE which was rejected by adjudicating authority - As no appeal against said order was filed by assessee, it has to be interpreted that they have accepted clandestine removal of goods - While allowing appeal of assessee, First Appellate Authority also went beyond scope of proceedings and directed payment of interest under section 11BB of CEA, 1944 when same was not the subject matter of

proceedings - Impugned order set aside: CESTAT


Shivam Steel Corporation Vs CCE & C (Dated: April 29, 2016) CX - Cases of clandestine manufacture and clearances were made against Appellant Nos. 1 and 2 - SCNs were predominantly based on certain documents recovered from residential premises of one Shri Sanatan Maity who was working as Accountant of Appellant No.1 - It is not coming out from SCN and O -I-O as to from where raw materials were procured by Appellant No.2 for manufacture of M.S.Ingots for which duty is demanded - It is also not coming out as to how much quantity of M.S.Ingots were manufactured by Appellant No.2 - No shortages/excess in raw materials/finished goods of Appellant No.2 were noticed by department - No confessional statement recorded during investigation that Appellants have indulged in any clandestine manufacture and clearance of goods based on documents recovered from residential premises of Shri Sanatan Maity - Alternately there is weight in argument of Appellants that M.S.Ingots alleged to be clandestinely cleared by Appellant No.2 are not sufficient to manufacture quantities alleged to have been manufactured and cleared by Appellant No.1.


CCE Vs Shree Ispat (Dated: March 10, 2016) CX - Assessee engaged in manufacture of Hot Rolled Products of Non-Alloy Steel falling under Chapter 72 of First Schedule to CETA, 1985 - Assessee had opted for scheme under Rule 96ZP(3) and therefore, it had to form ally opt out of that scheme to be eligible for provisions of Rule 96ZP(1) - They had given notice about closure to factory but in that notice dated 01.06.1998 intimating about closure of mill from 30.05.1998, there was no mention about opting out of provis ion of Rule 96ZP(3) - Manufacturer cannot opt twice during one financial year and opting out of Rule 96ZP(3) would be applicable from beginning of next financial year - Commissioner was not right in extending provisions of Rule 96ZP(1) for period 1999-2000 when there was no such request from assessee to opt out of scheme under Rule 96ZP(3) - Notice of closure cannot be read to be an option to opt out of Rule 96ZP(3) - Revenue's appeal allowed in as much as impugned order is modified to extent that duty liability for period 1999-2000 is ordered to be fixed under said Rule 96ZP(3): CESTAT

2016-TIOL-1671-CESTAT-MUM-LB

Rakhoh Enterprises Vs CCE (Dated: June 21, 2016) CX - Anchor rings and Load spreading plates, though the same are fixed to the foundation first and later attached to the tower are parts of the tower specially designed for wind operated electricity generators - Tower, Windmill doors are also parts of WOEG & are entitled to exemption Notification No. 6/2006-CE dated 01/03/2006: Larger Bench CESTAT [para 4, 5.3, 5.4, 5.5]

Also see analysis of the order


Elantas Beck India Ltd Vs CCE & ST (Dated: June 27, 2016)

CX - Refund - s.11B of CEA, 1944 - Unjust enrichment - Treatment of duty paid amount in the books of account is not conclusive proof that the incidence has been passed on to some other person - merely because the Excise duty is booked as expenditure in Profit & Loss account, it cannot be said the incidence of duty has been passed on - Matter remanded: CESTAT [para 5]



Steadman Pharmaceuticals Pvt Ltd Vs CCE (Dated: May 2, 2016) Central Excise - CENVAT credit availed on air travel and rail travel agent services - three SCN issued denying the credit availed - adjudicating authority dropped the proceedings - department preferred an appeal; before the commissioner (appeals) and the appeal was allowed - Hence, the present appeal.

Held: Services availed were for the sales promotion activities and hence are directly covered by the definition under Rule 2(l) of the CCR 2004 - clear from the definition that sales promotion is included in the inclusive part of the definition - no proof that the services were availed for personal activity - hence, credit availed is admissible

2016-TIOL-1665-CESTAT-AHM

United Phosphorous Ltd Vs CCE & ST (Dated: May 24, 2016) CX - Extension of stay - Department has no objection for extending Stay Order - In view of decision of Larger Bench of Tribunal in case of M/s. Haldiram India Pvt. Ltd.2014-TIOL-1965-CESTAT-DEL-LB stay Order dated 04.06.2012, be in force, till disposal of appeal: CESTAT


Vinayak Steels Ltd Vs CC & CE (Dated: February 3, 2016)

Central Excise - CENVAT Credit - HR Coils - Welding electrodes - Appellant is manufacturer of sponge iron & MS ingots - Demand raised by denying credit availed on HR Coils/plates, welding electrodes as inputs and penalty was also imposed - As regards HR Coils/plates which were used to fabricate ‘Former Sheet (FS)' used in induction furnace, it is seen that the CBEC Circular No. 690/6/03 dt. 21.1.2003, clarifies that FS is an integral part of induction furnace and FS captively consumed in induction furnace is in the nature of ‘input' - FS melts and is captively consumed in manufacturing the final goods - Even in the impugned order, Commissioner (A) observed that it is an integral part of induction furnace, but denied credit on the ground that appellant did not adduce any evidence to show the use of HR coils/plates to make FS and did not maintain proper records showing captive consumption of FS - Since it is clear that FS is essential one without which final goods cannot be manufactured, even though appellant failed to maintain records, it can safely be inferred that HR coils/plates were used to make FS - Moreover, in view of the decision in appellant's own case where credit was allowed on HR coils/plates while for the procedural lapse of not maintaining the records, penalty was imposed, in the case also credit is allowed while the penalty of Rs. 50,000/- is sustained - As regards welding electrodes, in the impugned order it was observed that they can be used for repairing or fabrication of any item and without documentary evidence to establish appellant's claim that they were used in fabrication of capital goods or maintenance and repair of capital goods/plant/machinery credit cannot be allowed - This view is acceptable and so credit disallowed on them is sustained - Hence, impugned order is set aside to the extent that it disallows the credit on HR Coils as such credit is admissible while denial

of credit on welding electrodes and penalty imposed is upheld - Appeal disposed of. [paras 1, 2, 4, 5]


CCE Vs Audi Automobiles (Dated: May 6, 2016) CX - Assessee engaged in manufacture of body building on procured chassis and they received chassis from chassis manufacturer, availed input credit in respect of various other inputs to be used by them and cleared their final product on payment of full rate of duty of 15% on said vehicles - Chassis was also supplied to them by persons other than chassis manufacturer - After doing the job of body building of said chassis, same were being cleared by assessee by availing exemption in terms of notfn 4/97 and subsequent notfn 5/98 - Revenue is denying exemption notfn itself on ground that assessee have availed Cenvat Credit of duty paid on inputs used by them - Even though Revenue, in their memo of appeal have taken the stand that assessee should have paid 8% on total assessable value of motor vehicle including value of chassis, but Tribunal views that in as much as provisions of Rule 57CC are itself not applicable on account of fact that exemption notfn was not available to assessee, said issue becomes irrelevant.

Core issue is as to whether assessee was entitled to exemption or not - Though legal issue held in favour of assessee by Commissioner (A) is correct but the fact as to whether reversal of 8% amounted to full reversal of cenvat credit availed by assessee or not is still required to be examined - Both sides submits that it may not be possible for them to exactly find out as to which input has gone into manufacture of which vehicle that is whether excisable or dutiable - Said exercise of finding out quantum of input used in manufacture of inputs and contested quantum of credit availed can be done on proportionate basis for which purpose impugned order is set aside and matter remanded to original Adjudicating Authority: CESTAT


Shri Kei Industries Ltd Vs CCE (Dated: May 4, 2016) CX - Availability of notfn 6/2002-CE as amended by notfn 29/2003-CE - As per condition attached to said notfn, assessee was required to produce a certificate before clearance of goods, from Chairman or Manager of DMRC to effect that such goods are being procured for and on behalf of DMRC - Only objection of Revenue is that original certificate issued by DMRC was not produced before clearance of goods and only a photo copy was sent to them - There is nothing in said condition to suggest that original copy should be sent to Revenue - In absence of any direction in said condition, requiring assessee to send original copy to Revenue, technical and procedural objection raised by Revenue, cannot be upheld - Impugned order set aside and appeal allowed: CESTAT


Deb Paints Pvt Ltd Vs CCE (Dated: May 4, 2016) CX - Penalty - Assessee had availed value based SSI exemption under Notfn 8/2003-CE - As value of clearances exceeded Rs.4.00 Crore during financial year 2008-2009, assessee was not eligible to SSI exemption under said Notfn - Differential amount alongwith inte rest was paid by assessee on being pointed out by Department - Only the assessee was aware that value of clearances during relevant period have crossed Rs.4.00 crores and that they are not eligible to SSI exemption - By not discharging appropriate CE duty, Central Excise Rules have been violated as per penal provisions

contained in Rule 25 (1) (a) & (d) of CER, 1944 - It is observed that penalty imposed by lower authorities is not equivalent to 100% of duty sought to be evaded by assessee - Penalty imposed is roughly 25% of duty sought to be evaded and is justified - Appeal dismissed: CESTAT


Duckbill Drugs Pvt Ltd Vs CCE (Dated: April 18, 2016) CX - On merit assessee is not agitating the issue regarding taking of Cenvat Credit on capital goods and also claiming depreciation under Income Tax Law - Assessee relied upon CA's Certificate to argue that calculation made in SCN and confirmed has been wrongly arrived at - As issue of miscalculation/wrong calculation was not raised before lower authorities, therefore, case is remanded.

Penalty - When provisions contained in Rule 4(4) of CCR, 2004 were abundantly clear, then assessee cannot claim ignorance of law for not imposing penalty - As quantification of correct demand is required to be worked out by Adjudicating Authority, amount of penalty on such re worked amount will be required to be calculated and assessee will be entitled to option to pay 25% of such reduced penalty on redetermined amount, along with interest, and 25% reduced penalty under Section 11 AC, if these amounts are paid within one month: CESTAT


Rajalakshmi Industries Ltd Vs CCE (Dated: May 13, 2016)

CX - s.4 of CEA, 1944 - Undervaluation of grey fabrics - there is nothing to show that the main appellant was aware of the fact that the merchant manufacturers have not stated the correct value of grey fabrics - for wrong declaration of the value by the supplier, extended period is not available for recovery of the duty from the job workers - Appeals allowed with consequential relief: CESTAT [para 5.1, 6]



Jindal Steel And Power Ltd Vs CCE (Dated: May 13, 2016) CX - Dispute arose regarding classification of Ladle Transfer Car (LTC) cleared by assessee - Revenue intended to classify the product under CETH 8603 as self-Propelled Rolling Stock whereas assessee classified said product under Heading 8454 which covers parts of converters; ladles, ingot moulds and casting machines of a kind used in a metallurgy or metal foundaries - Merely because under-carriage has been attached to Ladles, same would not take it out of category of Ladles which are specifically mentioned against Heading 84.54 - Ladles are meant for receiving molten metals from a furnace and puring in converters or moulds - As long as goods in question perform said function, they have to be necessarily held as Ladles - Following the ratio laid down in Larsen & Toubro Ltd., impugned order set aside and appeal allowed: CESTAT


The Simbhaoli Sugar Mills Ltd Vs CCE (Dated: February 23, 2016) CX - Recovery of interest for Cenvat credit wrongly taken, but not utilized - Assessee

is a manufacturer of sugar and had taken wrong Cenvat credit on various goods, which were later on found not entitled to said Cenvat credit - When it was pointed out so by Audit, assessee immediately reversed wrongly taken Cenvat credit - There was no malafide intention in this regard on part of assessee - Mere wrong availament of Cenvat credit does not attract interest liability - Consequently, appeal is allowed: CESTAT


CCE Vs Nhk Springs Ltd (Dated: May 3, 2016) CX - Whether refund claim filed by assessee was barred by limitation and as to whether same was hit by unjust enrichment - Assessee debited duty in their PLA on 22.03.2004 and claim was filed on 29.07.2004 - Such refund application was not accepted by Revenue and was returned after completion of investigation - Same was re-filed by assessee on 28.10.2005 - When an assessee deposits amount by making a debit entry in their PLA account during course of investigation, when some dispute on valuation is going on, such debit has to be held as deposit and not as duty - Inasmuch as same was within period of limitation, Tribunal agree with views of Commissioner (A).

As regards unjust enrichment, said deposit was made by assessee as a lumpsum amount by making debit entry in their PLA account without raising any supplementary invoice or any other document - Admittedly, if no invoice was ever raised by assessee, question of recovery of said amount from any other person does not arise - In such a scenario, appellate authority was right that refund claim was not hit by unjust enrichment.

Having filed the refund application on 29.07.2004, assessee would be entitled to interest in terms of provisions of Section 11BB of the Act - No reason to interfere in order of Commissioner (A) - Revenue's appeal is accordingly rejected: CESTAT


Maruti Suzuki India Ltd Vs CCE (Dated: December 16, 2015)

CX - Assessee engaged in manufacture of motor vehicles and parts thereof - Demand confirmed alongwith interest and equivalent amount of penalty on account of various types of scrap/waste of packing material remaining after removal of inputs therefrom and scrap of grinding sludge and used/mixed oil and effluent water - As per description of scrap, scrap of packing material is nothing but scrap/waste of packing material in which assessee have received various inputs required for manufacture of final products - These scrap/waste have not been manufactured by assessee and have not been arisen during course of manufacturing of their final products - Said scrap/waste have not passed test of manufacture - Duty is not payable by assessee as held by apex court in case of West Coast Industrial Gases Ltd. 2003-TIOL-03-SC-CX.

As regards to demand of duty on account of emergence of scrap of grinding sludge and used/mixed scrap of effluent water, entire quantity of duty paid inputs have been used in relation to manufacture of dutiable final product - It is not possible for assessee to manufacture desired dutiable final product by using a lesser quantity of inputs, so as to avoid generation of waste - When entire quantity of duty paid inputs was used in manufacture of final products and not in relation to manufacture of waste/scrap, therefore, emergence cannot be waste part of goods have been used to manufacture such waste - As this waste is not on account of manufacture, therefore, assessee is not liable to pay duty: CESTAT


Lifelong Meditech Ltd Vs CCE (Dated: May 11, 2016) CX - Refund on CHA service and courier service under Notfn 17/2009-ST - As assessee has been able to establish correlation between service provider's invoice and exporter from invoices and shipping bills, assessee becomes entitled for refund claim - Therefore, refund claim on CHA service is allowed to assessee - As regard to courier service, main reason for denial of refund is that courier agency has not mentioned IEC code number of exporter on invoices - Said issue was dealt with in case of Amar International and on said basis assessee is entitled for refund claim on courier service - Impugned order set aside: CESTAT

2016-TIOL-1644-CESTAT-AHM

CC Vs T And T Overseas Impex (Dated: April 7, 2016) Cus - Appeal filed by revenue on the ground that adjudicating authority in impugned order has not imposed penalty on assessee under Section 114A of Customs Act, 1962 - Adjudicating authority has imposed penalty of Rs. One Crore on assessee under Section 112 of Customs Act, 1962 vide impugned O-I-O - Duty liability for entire quantity of goods totalling 606MT amounted to Rs. 94,50,292/- only - Therefore, equivalent penalty under Section 114A, even if imposed, would have been lower than penalty of one Crore imposed under Section 112 - It is also not open to Revenue to agitate at present juncture that penalty should be imposed under Section 114A of Customs Act, 1962, when SCN itself proposed imposition of penalty under provisions of section 112/114A of Customs Act, 1962: CESTAT


CCE & ST Vs Manishreni Ferro Alloys Pvt Ltd (Dated: May 5, 2016) Central Excise - respondent is a manufacturer of Ferro silicon and availed CENVAT credit on inputs and capital goods - Commissioner (Appeals) allowed credit based on the certificate issued by the chartered Engineer to establish how the subject items were used in factory - Revenue is in appeal.

Held: The department has no case that the MS items/subject items received in the factory were diverted in any manner - no merit in the contention of the revenue that though the factum of availment of credit on steel items and welding electrodes was stated to be reported to the department by way of submission of copies of the invoices along with returns, the purpose/place of use of the said items was never intimated to the department - no provision/column in the ER -1 return to mention the purpose/place of use of inputs/capital goods - When returns are filed, it is for the proper officer to conduct scrutiny of the returns and inform the assessee about defects - In the present case Revenue has not stated what prevented the proper officer from conducting scrutiny of returns and issuing show cause within normal period - The Commissioner (Appeals) has rightly applied the judgment rendered by Hon'ble Apex Court in the case of Continental Foundation Jt Venture Vs CCE, Chandigarh-1 - 2007-TIOL-152-SC-CX - The Hon'ble court in the said case held that mere omission to give correct information is not suppression of facts - Revenue has miserably failed to establish the allegation of suppression of facts - demand raised invoking extended period is unsustainable. (para 5)


Vinayak Exim Vs CCE (Dated: June 27, 2016) CX - Merchant manufacturer taking CENVAT credit on bogus invoices without receipt of the inputs and showing themselves as manufacturer supplier of goods and issuing invoices - appellant, merchant exporters, exporting the goods and claiming rebate - on the fraud being brought to their notice, appellants forgoing the rebate claims - in adjudication, penalties imposed on appellants on ground of collusion. Held: It is necessary to establish beyond doubt that the buyer is knowingly involved in the fraud committed by the supplier - Buyers forgoing their claim of rebate - Penalty not imposable u/r 26, 27 of CER, 2002 - Appeals allowed: CESTAT [para] Also see analysis of the order


Orient Cement Ltd Vs CC, CE & ST (Dated: April 7, 2016)

Central Excise - whether credit availed on MS Angles, MS Plates, MS Channels, HR sheets/coils etc used for repair and maintenance of Plant and machinery is admissible or not - appellants availed credit on the said items - SCN issued proposing to disallow credit - original authority and Commissioner (Appeals) confirmed and upheld the demand along with interest and imposed equal amount of penalty - Hence the present appeal.

Held: The Hon'ble High Court in the case of CCE & Cus. Visakhapatnam Vs Rashtriya Ispat Nigam Ltd 2011 (271) ELT 338(AP) has held that credit on steel sheets and coal used in repair and maintenance of capital goods in the factory of manufacturer is admissible - In Ramala Sahkari Chini Mills Ltd Vs CCE -2010-TIOL-102-SC-CX, the Hon'ble Apex Court while considering the issue whether credit is admissible on welding electrodes used for repair and maintenance doubted the interpretation of "inputs" rendered in the case of Maruthi Suzuki Ltd and referred the matter to the Larger Bench - The Hon'ble Larger bench of Apex Court in Ramala Sahkari Chini Mills Ltd case - 2016-TIOL-20-SC-CX-LB answered the reference observing that the word "includes" used in the definition does not have a restrictive meaning - Following the dictum laid in these judgments credit availed on MS items used for repair and maintenance of plant and machinery is admissible. (Para 6, & 7)


Kamini Metalliks Pvt Ltd Vs CC, CE & ST (Dated: March 16, 2016)

Central Excise - alleged availment of irregular credit on MS items and availment of 100% credit on certain capital goods in the same year. - SCN issued alleging that appellant contravened Rule 4(2)(a) of Cenvat credit rules, 2004 and proposed to recover credit vailed along with interest and penalty - also to appropriate the excess credit along with interest and penalty under rule 15(1) of CCR, 2004 - original authority and confirmed the demand along with interest and imposed equal amount of penalty on the irregular credit on MS items - excess credit to be appropriated along with the demand of interest and imposed penalty - on appeal, Commissioner (Appeals) observed that the credit availed on MS items used for fabrication of capital goods/parts/components/accessories/spares is admissible and that used for building and shed is not admissible - directed the jurisdictional officer to work out the quantum of items used for building and shed - Excess credit availed on capital goods and the demand of interest and penalty imposed on this count was upheld - Hence the present appeal.

Held: first issue that poses for consideration is the credit availed on MS items - the appellant has not used the subject items on which credit was taken for construction of shed or buildings - verification report establishes that the subject items were used for

manufacture of capital goods - no evidence to establish that appellants used it for civil construction works - In India cements Ltd Vs CESTAT, Chennai 2015 - 2015-TIOL-650-HC-MAD-CX the Hon'ble High Court has categorically held that credit is admissible on MS items used for fabrication of structural support which are integral part of the machinery without which they can neither be erected nor be functioned - Hence, the credit availed on MS items is admissible - with regard to 100% credit, appellant erroneously availed the credit and on knowledge of the mistake reversed the credit even before utilization - as the appellants are entitled to avail the credit next year, appropriation of the 50% credit is not legal and proper - however, they are liable to pay interest until the date of reversal as they contravened the provisions of Cenvat Credit Rules, 2004 - no ground for penalty as they are eligible for the credit in subsequent year - the credit availed on MS items is admissible - impugned order to the extent of disallowing credit on MS items and ordering recovery of credit, interest and imposing penalty is set aside - appropriation of excess credit availed on capital goods is set aside - penalty imposed under Rule 15(1) of Cenvat Credit Rules, 2004 is also set aside - interest liability till the date of reversal of credit is sustained. (Para 5, 6, 7, & 8)


CC & CE Vs Madras Cements Ltd (Dated: February 19, 2016) Central Excise - respondent engaged in repacking of cement - availed CENVAT credit on service tax paid on civil construction works, prior to the period 01-04-2011- issuance of SCN as the credit was availed credit on construction works for non-plant structure - original authority confirmed the demand along with interest and imposed penalty - Commissioner (Appeals) allowed the appeal by the respondents - Hence, the present appeal.

Held - it is clear that the constructions were carried out for the purpose of starting production - these services are very much included in services necessary for setting up, modernization of factory - no infirmity in the impugned order. (Para 4)


CC & CE Vs India Cements Ltd (Dated: February 19, 2016) Central Excise - Disallowance of CENVAT credit - manufacturer of cement and availed credit of service tax paid on input services like insurance, colony maintenance etc - Issuance of SCN proposing to deny credit on services - the original authority disallowed the credit and confirmed the demand along with interest and imposed equal amount of penalty - on appeal, Commissioner (Appeals) allowed the credit for the services availed prior to the period 01-04-2011 and disallowed credit on services availed after 01-04-2011 and reduced penalty to an extent of 5000/- revenue filed an appeal challenging the credit allowed.

Held - the period involved is after01-04-2011 - In a catena of judgments the Tribunal as well as Court have held that these services used in activities relating to business of the assessee, would be eligible for credit - hence, the impugned order calls for no interference - (Para 5)


J K Sugar Ltd Vs CCE (Dated: April 8, 2016) CX - Whether assessee is entitled for remission of duties on molasses lost due to auto combustion, or accident - Loss have occurred due to unavoidable accident - Similar

question was considered by Tribunal in RBNS Sugar Mills Ltd., wherein it is noticed that Auto Construction of molasses stored in tanks is a recurrent natural phenomenon - National Sugar Institute, Kanpur, have also accepted this, stating that these accidents usually take place at high temperature during summer months, when ambient temperature is high - No negligence found on part of assessee in taking reasonal care - As per un-controverted test reports, burnt molasses were no longer fit for consumption - Accordingly, assessee is entitled to remission of duty under Rule 21 of CER: CESTAT


Hyderabad Industries Ltd Vs CCE (Dated: May 19, 2016) Central Excise - appellants are engaged in manufacture of asbestos cement product - department alleges irregular availment of CENVAT credit of duty by appellants on MS items - Plates, chequered plates, channels under the category of capital goods used in construction of new plant - asked to furnish details of capital goods on wh ich credit was availed - appellant submits that credit was availed on capital goods used in the plant and machinery - Issued SCN alleging irregular availmet of credit - original authority and Commissioner (Appeals) confirmed and upheld the demand along with interest and penalty - Hence, the present appeal.

Appellants submitted that plant was undergoing expansion and subject items were used for machineries and some for construction of sheds - use was such that these goods became components, parts and accessories - Board's Circular No.276/110/96-TRU clarifies that all parts, components and accessories to be used with capital goods of clauses (a) to (c) of Explanation 1 of Rule 57Q and classifiable under any chapter heading are eligible for availment of Modvat credit.

Held: Necessary to analyze whether the subject goods will fall under parts, components and accessories - In CCE, Salem Vs Chemplast Sanmar Ltd - 2014-TIOL-1492-HC-MAD-CX, the Hon'ble High Court of Madras held that credit is admissible on Iron & Steel products falling under chapter 73 which are used as structural support to plant and machinery - by applying the user test, these items become component of machineries and credit could not be denied on the ground that these items were not covered under definition of capital goods, under erstwhile Rule 57Q of Central Excise Rules, 1944 - The Hon'ble Apex Court, in the case of CCE Coimbatore Vs Jawahar Mills Ltd - 2002-TIOL-87-SC-CX evolved the user test and held credit is admissible on capital goods, if they satisfy the test - court referred to the erstwhile definition of capital goods (explanation to Rule 57Q), and observed that the definition of capital goods is very wide - as per rule 2(a) goods falling under clause A (i) to A (viii) would come within the definition of capital goods if used in the factory of manufacturer of final goods - activities carried out by machines/equipments listed by the appellant being essential part for completing manufacture of final product, the MS items used for erection/fabrication of such machines/equipments would also fall into the category of components/spares/accessories of capital goods - reliance made by authorities on the case of Vandana Global Ltd., to disallow the credit on MS items used for machines/equipment is misplaced - accordingly the credit availed on MS items used for machinery and equipments is allowed - items used for plant shed, generator shed, fibre/cement storage shed, is not admissible - issue being an interpretational issue and as the matter was referred to Larger Bench of Tribunal during the material time, it is not fit to impose penalty for the credit availed on MS items used for shed - the impugned orders are set aside to the extent of demand of credit availed on MS items used for machinery and equipments - demand of credit availed on MS items used for shed is sustained along with interest - The penalties imposed are set aside. (Para 10, 11, 13, 16, & 17)


Ess Dee Aluminium Ltd Vs CCE (Dated: April 12, 2016)

CX - Issue is regarding Cenvat Credit wrongly taken by Head Office of assessee with respect to services availed by branch offices of Headquarters situated all over country - Headquarter of assessee has not been registered as an input service distributor and even service recipients (branch offices) are also not registered with service tax authority - It is observed from case law relied upon by revenue that similar issue has been decided by CESTAT, Ahmedabad in case of Market Creators Ltd 2014-TIOL-2021-CESTAT-AHM - Accordingly, appeal filed by assessee is dismissed: CESTAT 2016-TIOL-1628-CESTAT-DEL

Federal Mogul Automotive Products India Pvt Ltd Vs CCE (Dated: May 24, 2016) CX - Refund - Limitation - Assessee filed a claim seeking refund of debits made by them on 19.02.2005 - Allegation in SCN by way of corrigendum to the effect that re-credit taken on 17.05.2003 and 5.3.2004 is improper and without valid documents is an additional development, which is virtually a demand of re-credited amount on 17.05.2003 and 5.3.2004 - Lower authorities did not examine eligibility of assessee for refund on merit - Refund claim is with reference to debits made on 19.02.2005 and first claim filed on 7.12.2005 is well within the time - Thus, rejection of claim only on ground of time bar is not sustainable - Accordingly, orders by lower authorities on this ground are set aside and matter is remanded: CESTAT


Kinjin Food Pvt Ltd Vs CCE (Dated: June 16, 2016)

CX - Refund - If it is established that the appellant was issued debit note by the principal towards the excise duty initially paid by the appellant and same has been accounted for in the books of accounts of both the parties, it is clear that the incidence of duty paid by the appellant does not stand passed on to the principal - Matter remanded for verification: CESTAT [para 6]


CCE Vs Urisan Cosmetics Ltd (Dated: June 10, 2016)

CX - Whether the provisions of Section 4A of the CEA, 1944 is applicable for discharge of central excise duty on the product "hair dye pack" weighing less than 10 gm or otherwise.

Held: Larger Bench of Tribunal in the appellant's own case - 2006-TIOL-354-CESTAT -MUM-LB has held that in view of specific legal requirements under the SWMR that cosmetics are to be sold by weig ht or volume, quantities of cosmetics weighing less than 10 gms, even though contained in multi-pack sachets, will be exempt under Rule 34 of SWMR and consequently Section 4A of the CEA will not have any application to such multipacks - Since the very same issue is decided in favour of the respondent, nothing survives in the appeal filed by the revenue – Revenue Appeal rejected: CESTAT [para 4, 5]


Kinjin Food Pvt Ltd Vs CCE (Dated: June 16, 2016) CX - Refund - If it is established that the appellant was issued debit note by the principal towards the excise duty initially paid by the appellant and same has been

accounted for in the books of accounts of both the parties, it is clear that the incidence of duty paid by the appellant does not stand passed on to the principal - Matter remanded for verification: CESTAT [para 6] Also see analysis of the order

2016-TIOL-1619-CESTAT-MUM Emco Ltd Vs CCE (Dated: June 14, 2016) CX - s.4 of CEA, 1944 - Valuation - Concept of transfer of ownership based definition of 'sale' is alien to the Central Excise Act - meaning of 'sale' in Central Excise Act has been linked to 'transfer of Possession' and not to 'transfer of property in goods' as in Sale of Goods Act - concept of sale in the Central Excise Law involves 'transfer of possession of goods' even without 'transfer of property' in goods - relying on the provisions of Sale of Goods Act to interpret the provisions of the Central Excise Act in general and Section 4 thereof in particular, does not appear to be correct - buyer's premises cannot, in law, be "a place of removal" - Freight and transit insurance from factory gate to customers premises not includible in AV both before 01.07.2000 and after - Assessee appeal allowed & Revenue appeal rejected: CESTAT [para 4, 4.1 to 4.6, 5, 7]



Aar Kay Industries Vs CCE (Dated: March 22, 2016) CX - In a short span of time physical stock taking of such a huge stock of 4762.485 NIT of ingots is not possible - Stock taking was done on average basis and if such method of weighment has been adopted there are certainly, variation will take place - Shortage of only 74 MT in a stock of around 5000 MT which is a meagre one - Due to such variation, without corroborative evidence, allegation of clandestine removal of goods cannot be proved - No evidence on record to show that shortage found has been cleared clandestinely - Allegation of clandestine removal of goods is not sustainable - This is a classical case where assessee paid duty along with interest and 25% duty as penalty to buy peace but departmental officers in enthusiasm, issued SCN to assessee - Impugned order deserves no merits, hence set aside: CESTAT


Ellenbarrie Industrial Gases Ltd Vs CCE (Dated: March 29, 2016) CX - Penalty - Issue involved is demand of an amount @8% under Rule 6 of CCR, 2004 with respect to liquid nitrogen used in manufacture of dutiable and exempted finished products - Issue is not contested vy assessee on merits but argued that equivalent penalty cannot be imposed upon them - Period during which Cenvat Credit was taken by assessee is from April, 2003 to July, 2004 when CCR, 2002 and 2004 were in operation - As per Rule 12 of Rules, 2002, recovery machinery for taking improper credit existed in CCR, 2002 - Assessee was well aware of paying 8% of amount under Rule 6 of Rules when common inputs are used in manufacture of dutiable and exempted finished products and where no separate accounts are maintained - All relevant details with respect to dutiable and exempted goods were mentioned in periodical returns filed with department - In interest of justice, Bench views that a penalty of Rs.20,000/- under Rule 13(1) of CCR, 2002 will meet ends of justice - Accordingly, penalty imposed upon assessee by Adjudicating Authority and upheld by appellate authority is reduced to Rs.20,000/-: CESTAT


Nicholas Piramal Ltd Vs CCE (Dated: May 26, 2016)

CX - Valuation of Physician samples - as the appellant has valued the physician sample based upon pro rata basis with the comparable goods available, the comparable goods being sale pack of the physician sample, the cost of ‘catch cover' is not required to be again added in AV - Appeal allowed with consequential relief: CESTAT [para 7, 8, 10]



Nalco Vs CCE (Dated: March 29, 2016) CX - Whether CENVAT Credit with respect to motor vehicle chassis (Tractor) falling under Chapter 87 of CETA, 1985, is admissible to assessee under Rule 2 (b) of CCR, 2002 - Goods of Chapter 87 are not covered within definition of capital goods for purpose of taking CENVAT Credit as capital goods - Nothing on record to suggest as to how said goods are directly used in or in relation to manufacture of metals, end product of assessee - It is categorically held by first appellate authority that motor vehicle chassis on which CENVAT Credit is taken has not been used directly in or in relation to manufacture of finished goods manufactured by assessee - Appeal filed by assessee with respect to admissibility of CENVAT Credit is rejected - As assessee is a GOI undertaking and cannot be said to have any malafide intention to take CENVAT Credit by fraud and willful misstatement - Accordingly, penalty imposed upon assessee is set aside: CESTAT


CC & CE Vs Bharat Petroleum Corpn Ltd (Dated: May 19, 2016)

Central Excise - Government of India Undertaking - refining and marketing of Petroleum products -demand of duty on operational losses - respondent has warehouse storage tanks -petroleum products are prone to evaporation while in storage, in transit and while handling - Hence, difference between physical stock and the book stock is called operational loss - CBEC by its circular No.6/36/70-CX has fixed the permissible storage loss as 0.5% - verification of daily stock account and ER-1 return - physical stock less than book stock, more than 0.5% - issuance of three SCN for different periods -SCN clearly states the respondents filed returns, therefore alleging suppression of facts invoking extended period is not sustainable.

Held - No upper limit fixed for operational losses - In case it is higher than 0.5% or 1% the Board has to closely scrutinize the case and satisfy themselves - the department has not conducted any such scrutiny with regard to the operational losses - no case that products were removed clandestinely - ought to have conducted periodical verification and satisfied themselves before raising a demand - respondents disclosed their operational losses in RT-12 returns - it cannot be said that respondent is guilty of commission of any deliberate act/omission to evade payment of duty - being a Government of India undertaking, there cannot be any malafide intention to evade payment of duty -loss in storage is bound to take place for petroleum products is well accepted - no case for department that apart from natural causes, there was any willful act - failed to establish that the operational loss claimed by respondent is not due to natural causes - No error in the impugned order. (Para 7, & 8.)


Adhikasri Electromech Ltd Vs CCE & ST (Dated: April 01, 2016) Central Excise - Department alleged that appellant (AEPL) was indulging in fraudulent availment of CENVAT credit on invoices obtained from a registered dealer, without actual receipt of goods - investigation was conducted - AEPL availed credit mainly on three items i.e. Aluminum - wire rods, rolled products of various types and ingots - Allegation is confined to certain consignments of aluminum wire rods and rolled products - supplier of input was Karnataka Metal Company(KMC) who is a registered dealer - Investigation showed that KMC sold the goods in local market without issuing sale bills - KMC then issued Cenvatable invoices to AEPL and other manufacturers without actual supply of goods - APEL availed credit on such invoices without receipt of goods - Some private records were resumed from the manager of KMC - Basing upon the entries found in note books, Katcha slips etc. in the residence of manager and also his statement, investigations were initiated against several manufacturers including AEPL - KMC, being a co -notice


Agarwal Steel Structures India Pvt Ltd Vs CC, CE & ST (Dated: May 5, 2016) Central Excise - whether the credit is admissible on MS items used for fabrication of parts/components/spares/accessories of capital goods and whether the SCN is hit by time bar - appellant engaged in the manufacture of structures and parts of structures - availed CENVAT credit facility of inputs and capital goods-department alleged irregular availment of Cenvat credit on MS angles, HR Plates, MS channels etc. as capital goods - appellants raised the ground of limitation as well as on merits - the original authority confirmed the demand along with interest and imposed equal amount of penalty. On appeal, Commissioner (Appeals) upheld the demand and penalty - Hence, the present appeal.

Appellants submitted that the MS items were used for manufacture of various parts/components/accessories/spares of capital goods within the factory or for repairs and maintenance of capital good - produced photographs and certificate issued by a Chartered engineer, certifying that the subject items were used in fabrication /maintenance of capital equipments - demand is hit by limitation as there is no evidence to prove suppression of facts or wilful misstatement.

Held : The appellant has disclosed the availment of credit in the ER -1 returns and also in the Cenvat credit statements - the show cause notice itself relies upon ER-1 returns and the information furnished by appellant - produced photographs and certificate issued by chartered engineer as to the use of MS items in fabrication of capital goods, and these in turn are used for manufacturing finished product - In CCE Noida Vs Accurate Chemical Industries the High Court was of the view that the jurisdictional Range Officer is required to carry out scrutiny of the returns - If this had been done, the short payment would have come to light - extended period cannot be invoked as there is no willful suppression or collusion with intent to evade payment of duty - When facts are known to both parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression - It is settled law that mere failure to declare does not amount to willful suppression - SCN is time barred - appellant succeeds on the ground of limitation - Therefore, not necessary to delve into the merits of the case - impugned order set aside. (Para 7, 9, 10, & 11)


Andhra Sugars Ltd Vs CC & CE (Dated: May 17, 2016) Central Excise - eligibility for CENVAT credit on excise duty paid on cement-appellant is a manufacturer of sugar and molasses - during expansion of factory, the appellant procured various capital goods which were heavy plant and machinery and for the purpose of installation and erection used "cement" - - credit was availed on excise duty paid on cement used for installation, and erection of capital goods used for manufacture of final products - SCN issued alleging that credit is not admissible on cement, as it does not fall under the category of capital goods and that credit is not admissible as input because cement is not used directly or indirectly in the process of manufacture of final product - original authority confirmed the demands along with interest and imposed penalties - on appeal,the Commissioner (Appeals) allowed the appeal filed by the appellant, and set aside the order relying on CCE, vs India Cements - 2005-TIOL-668-CESTAT-MAD, where in it was held that cement and steel used for structural support /foundation of plant and machinery was held eligible for credit-Revenue appealed the tribunal - the Tribunal disposed the pending appeals by remanding all matters to the Commissioner (Appeals) - In the remand proceedings, the Commissioner (Appeals) vide order impugned herein upheld the earlier order of original authority which had confirmed the demand along with interest besides imposing penalty - Aggrieved by this order, the appellants are before the Tribunal.

Held: Issue is whether credit on cement used for foundation (Installation and erection) of plant and machinery is admissible or not - the appellant had raised a contention before the Commissioner (Appeals ) in the remand proceedings that if credit is not admissible under the category of capital goods, the appellant was eligible for credit of duty paid on cement as "inputs" - Before the amendment made to Explanation 2 of the Rule 2(k) - definition of input - the claim of credit on cement and steel as inputs was being allowed - Cement was used indirectly in relation to manufacture of finished goods and whatever is used in the manufacture of final product, is eligible for credit - The contention of the appellant that they raised this alternative plea before the Commissioner (Appeals) in remand proceedings is correct - Commissioner (Appeals) has not considered or recorded any finding with regard to this plea - Be that as it may, the plea of the appellant that credit is admissible as input should have been analyzed as the matter was remanded and appellant was given a further opportunity to refute the Larger Bench decision - It is the case of the appellant that cement was used for foundation and installation of plant and machinery - The interpretation of 'input' rendered by Hon'ble Apex Court in Maruthi Suzuki Ltd was doubted and the issue was referred to Larger Bench in the case of Ramala Sahakari Chini Mills Ltd- The Larger Bench of Supreme Court by the judgment reported in - 2016-TIOL-20-SC-CX-LBheld that the word 'include' in the definition of 'input' in Cenvat Credit Rules 2002/2004 is generally used to enlarge the meaning of the preceding words and it is by way of extension and not with restriction - the appellants used the cement for erecting and installing machinery (capital goods) within the factory of production - definition of capital goods does not require that capital goods should be used in the process of manufacturing, but used in the factory premises - cannot be disputed that cement is necessary for laying foundation to fix machinery, and for support structures of capital goods - They have availed credit only on that quantity of cement used for essential and technical foundation without which the machinery cannot operate or function and the manufacture of excisable goods will not take place - Following the decision laid by Larger Bench of Apex court in the case of Ramala Sahkari Chini Mills Ltd appellants are eligible for credit of excise duty paid on cement, under the category of inputs - (Para 10, 11, 13, & 14).


CCE Vs Advance Auto Concepts Pvt Ltd (Dated: June 21, 2016)

CX - Classification - Go-kart is correctly classifiable under CSH 87.03 - Revenue appeal allowed - CE duty upheld but penalties imposed on assessee and Director set aside as issue is of interpretation and classification of goods: CESTAT [para 6.2 to 6.5]



Ksb Pumps Ltd Vs CCE (Dated: May 30, 2016) CX - Classification - Base frame is not an integral part of pump but only an accessory and is rightly classifiable under CH 8485 and not CH 8413 - entire issue has been considered in its proper perspective by Tribunal, hence there is no error, leave alone error apparent on the face of record - ROM application dismissed: CESTAT [para 4, 5]



Insucon Cables And Conductors Pvt Ltd Vs CCE (Dated: May 20, 2016) CX - Issue involved is correctness of claim made by assessee regarding correct quantum of exclusion towards sales tax from transaction value for Central Excise purpose - Central excise valuation is being done for final product and sales tax actually payable or paid on such final product only can be given exclusion - If assessee charged and collected amount towards sales tax but not paid the said full amount to State, amount retained under whatever name shall not be eligible for exclusion in terms of Section 4 (3) (d) of CEA, 1944 - No reasoning found to support allegation of suppression of facts - Invocation of extended period is not legally sustainable - Accordingly, demand of differential duty is to be restricted to normal period which shall be payable with applicable interest by assessee - Imposition of penalty equal to duty amount is not sustainable - Since, excise duty applicable on retained sales tax amount has not been collected by assessee from buyers, they are eligible for calculation of duty liability taking differential value as cum duty value: CESTAT


CCE & ST Vs Godawari Power And Ispat Ltd (Dated: May 4, 2016) CX - Appeal filed against impugned order on ground that it was passed in violation of Rule 5 of Central Excise (Appeals) Rules, 2001 - Grounds of appeal founds rather vague, without mentioning, which are all additional evidences, which will be barred under said rule - Certain discrepancies between drawings/chart as presented before Original Authority which were also produced before Appellate Authority were mentioned as reason for alleging said violation of Rule 5 - Seeking additional information or clarification on evidences on record to facilitate proper finding cannot be barred by said rule - There is no allegation that new set of evidences have been submitted by assessee which came into existence after said case was decided by Original Authority - No merits in appeals, hence, dismissed: CESTAT


Vinayak Steels Ltd Vs CCE (Dated: March 16, 2016) Central Excise- suo moto taking of Credit reversed under protest after favorable decision - Appellant supplied goods to SEZ without payment of duty - Demand of 10% set aside by the Tribunal - Consequently, appellant suo moto re-credited the CENVAT credit reversed under protest - Demand on the ground that there is no provision in

CENVAT Credit Rules to take back credit suo moto.


CCE Vs Hindoostan Spinning And Weaving Mills Ltd (Dated: June 15, 2016) CX - Respondent assessee claiming refund of Credit of AED (TTA) lying in account after they opted for exemption under notification 30/2004-CE - Respondents are not entitled to re fund of accumulated credit lying in their accounts unless they are able to show that they are fulfilling the conditions prescribed under Rule 5 of the CCR and the notification issued thereunder - Revenue appeal allowed: CESTAT [para 4 to 7]



Aplab Ltd Vs CCE (Dated: June 14, 2016)

CX - Whether the appellant is required to discharge differential Central Excise duty with interest on the value of batteries supplied along with UPS to their customers - Revenue view is that the value of the batteries should be included for discharge of CE duty while the appellant's case is that it need not.


A N Gandhinglaj SSK Ltd Vs CCE (Dated: June 10, 2016) CX - CENVAT - Appellants are manufacturing sugar and during the said processing bagasse/press-mud are generated which are sold by the appellant - Since the appellants are availing CENVAT Credit, a demand was raised seeking to recover the amount equivalent to 5% of the value of such goods in terms of Rule 6(3) of the CCR, 2004 - Appeal to CESTAT.


NCL Industries Ltd Vs CCE & ST (Dated: March 15, 2016) Central Excise - Rule 16 - availment of CENVAT credit on finished product received from another unit - appellant has two plants in cement located at different places - one plant has manufacture setup and the other is a grinding unit, with a railway sliding facility - grinding unit received an order for supply of 43 grade Cement which was received from the other factory - took credit for the duty paid on cement under rule 16 of the CE rules - department said that as it was removed from the other unit, cannot take credit as these are finished goods and not inputs - issuance of SCN - confirmed the demand on the credit along with interest - approached the Commissioner (Appeals) - appellants contend that manufacturer can receive duty paid goods for remaking, refining and reconditioning or for any other reason - entitle to avail credit of duty -Commissioner held that situation is revenue neutral and credit is admissible - procedural infraction and violation of CENVAT rules, hence liable to pay interest on the irregular credit - Thus, the present appeal.


Fine Industries Vs CC & CE (Dated: May17, 2016)

Central Excise - Manufacture - Demand of duty on Roofing bolts and nuts supplied to M/s Singareni Collieries - Demand upheld in view of the precedent order against the appellant in identical case - Duty to be re-computed after extending the CENVAT Credit on inputs and excluding bought-out items - Penalties on the firm, partner are set aside as there was no intention to evade payment of duty - Redemption fine is also set aside.


CCE Vs Sri Sai Sindhu Industries Ltd (Dated: February 25, 2016) Central Excise - Rule 15 (2) of CENVAT r.w. Section 11AC of the Central Excise Act - Manufacture of sponge irons - Credit availed on inputs and capital goods - SCN issued on the ground of availment of irregular credit on MS items - demand confirmed along with interest and penalty - on appeal, Commissioner (Appeals) set aside the demand both on merits and limitation - Hence, present appeal by department.


KSB Pumps Ltd Vs CCE (Dated: May 17, 2016) Central Excise - Notification No.6/2002-CE – manufacture of industrial valves – contention that valve is a non-conventional energy device – appellant claimed duty exemption.


Orient Bell Ltd Vs CCE & ST (Dated: February 10, 2016) CX - Assessee engaged in manufacture of ceramic tiles and verified tiles - They also traded in tiles manufactured by other manufactures and also import tiles (for trading) on payment of Customs duty - SCN was issued for period January 2011 to March 2012 as it appeared to Revenue that under provisions of Rule 6 of CCR, 2004, Cenvat credit of ST is available only in respect of dutiable goods/taxable services - As per explanation 1 (C) in Sub Rule 6 (3) of CCR, 2004, for period beginning 1/4/2011, assessee will be required to reverse amount of Rs. 5,16,308/- being the proportionate Cenvat credit availed on 10 % of trading turnover - So far the Cenvat credit on repair and maintenance under head civil construction, it is found that under sub clause (ii) of Rule 2 (I) and renovation or repair service of premises for manufacture or of service provider have been specifically included as an input service - As such, amount of Rs. 1,06,468/- allowed as Cenvat credit - Penalty imposed is also set aside - Assessee will be entitled to consequential benefit: CESTAT


Gemini Edibles And Fats India Pvt Ltd Vs CCE & ST (Dated: May 27, 2016)

Central Excise - Excisability of the byproduct 'Spent Earth' arising as a residue in the process of refining of crude palm oil -adjudicating authority confirmed demand of duty on the byproduct and interest and imposed equal penalty - On appeal, Commissioner (Appeals) rejected the appeal holding that definition of excisable goods in 2(d) of the CE Act, 1944 was amended adding an explanation that for the purposes of this clause, 'goods' includes any article, material or substance which is capable of being bought or sold for consideration and that such goods shall be deemed to be marketable.

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