2018-TIOL-192-CESTAT-MUM

Jaya Hind Industries Ltd Vs CCE

CX - Section 4 of the CEA, 1944 - Valuation of goods manufactured and cleared to own unit - Department alleging undervaluation and confirming demand of differential duty along with imposition of penalty - appeal to CESTAT. Held: It is a fact that the goods have been cleared by the appellant on payment of duty, therefore, no malafide intention is proved - Whatever duty is discharged by the appellant unit is taken as cenvat credit by their sister concern who is recipient of the goods - Therefore, any differential duty that arises in this case was also available as cenvat credit to their recipient unit - On going through the details of duty payment particulars, it is found that the consignee unit of the appellant has paid excise duty not only from CENVAT but also from PLA which is more than the excise duty demand involved in the present case - On this fact, revenue neutrality is established - no demand can, therefore, sustain - aspect of valuation not gone into - impugned order is set aside and appeal is allowed: CESTAT [para 5, 7] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-191-CESTAT-MUM

Kare Labs Pvt Ltd Vs CCE

CX - Valuation of Physician samples sold to pharmaceutical company who are the trade mark owners; physician samples manufactured on job work basis - Appellant valued physician samples which was sold on principal to principal basis u/s 4(1)(a) of CEA, 1944 and in respect of samples manufactured and cleared on job work basis valuation done on the basis of cost of manufacture plus 10% notional profit - Revenue contention is that value should have been done on the basis of Rule 4 of the Valuation Rules, 2000 by taking pro rata value of the trade pack of the same medicines. Held: Issue is squarely covered by the Tribunal judgment in the case of Medispray Laboratories 2017-TIOL-916-CESTAT-MUM wherein it is held that in case of job worked goods, value should be in terms of the principles laid down by the Supreme Court in the case of Ujagar Prints 2002-TIOL-03-SC-CX-CB viz. on the basis of cost of raw materials + job charges including the profit of the job worker and that it was not the case of the department that the value determined by the appellant is less than the value to be arrived at based on the principles laid down by the apex court - that in respect of physician samples sold to principal, as the transaction is on principal to principal basis, transaction value would apply - Impugned order is set aside and appeal is allowed: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-190-CESTAT-MUM

Galaxy Surfactants Ltd Vs CCE

CX - Whether the appellant is entitled for the cenvat credit on angles, channels, beams, nut-bolts, guides etc. used by them for fabrication of vertical storage structure, racks for storage of raw material and finished goods. Held: Issue is no longer res integra - Rack is used for storage of raw material and finished goods - The storage of goods in a manufacturing unit is very vital part for manufacture - Without storage system, material management is impossible and consequently it will adversely affect the entire manufacturing chain in the factory - Therefore, since the steel items viz, angles, channels, beams etc used for making storage rack are used in or in relation to manufacture of final product, hence are clearly eligible for cenvat credit – Appeal allowed: CESTAT [para 5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-189-CESTAT-MUM

Harita Seating Systems Ltd Vs CCE

CX - CENVAT - In January, 2010 new joint venture was created with 51% share of the appellant and 49% share of the F. S Ferhrer Automotive GmbH and this new Joint venture namely M/s. Harita Fehrer was created - Under this JV company, foam division continued to manufacture foam - Before creating JV the appellant had availed Cenvat credit in respect of certain capital goods which were installed in their factory and used for manufacturing foam - The case of the department is that since a new joint venture was created and foam division was transferred to such joint venture, it tantamount to removal of capital goods from the appellant to joint venture - Therefore such capital goods and inputs lying in the JV premises is liable for payment of duty in accordance with Rule 3(5) CCR, 2004 - demand of Rs.1,24,06,867/- was confirmed by adjudicating authority and in first round of appeal, Tribunal remanded the matter for correct quantification of demand - in denovo, original authority confirmed demand of Rs.25,42,117/- and against this demand assessee in appeal before CESTAT. Held: There is no dispute that the capital goods and input on which credit was availed by the appellant and subsequently on the creation of joint venture it was used by the joint venture but such goods were not removed from existing premises - The payment of duty is required to be made under Rule 3(5) of CCR, 2004 only in such case whether the goods are removed from the factory - In the present case, admittedly the goods were lying in the same premises and was not removed, therefore, provision of Rule 3(5) of CCR, 2004 shall not apply - Issue is no longer res integra in view of Tribunal decision in L.G. Balakrishnan & Bros., Ltd - 2015-TIOL-966-CESTAT-MUM - impugned order is not sustainable, hence set aside - Appeal is allowed: CESTAT [para 5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-188-CESTAT-BANG

Kerala Electrical And Allied Engineering Co Ltd Vs CCE, C & ST

CX - Assessee engaged in manufacture and clearance of their product transformers to certain customers under a clause for variations of price from contract price on the basis of monthly indices published by Indian Electronics and Electrical Manufacturers Association (IEEMA) - According to the assessee, there was a price variation clause in contract with KSEB and though duty was paid as per the rate fixed in contract, due to price variation formula there was a reduction in price and therefore, KSEB has paid only lesser amount than actually paid by them which resulted in an excess payment and for which they filed the refund claim - Same was rejected by lower authority on the ground that it was filed beyond the period of one year from the date of payment of duty - Issue involved in the present case is no more res integra and has been settled in favour of Revenue by various Courts in cases of MRF Ltd. 2002-TIOL-257-SC-CX-LB , Hindustan National Glass & Indus. Ltd. 2005-TIOL-52-SC-CX-LB and Maharashtra Cylinders Pvt. Ltd. 2010-TIOL-934-HC-MUM-CX and therefore, by following the ratios of decisions cited, there is no infirmity in impugned order and therefore, same is upheld by dismissing the appeal of assessee: CESTAT - Appeal dismissed: BANGALORE CESTAT

2018-TIOL-187-CESTAT-MUM

Intervalve Poonawalla India Ltd Vs CCE

CX - CENVAT credit taken on value or wrong amount in respect of 42 invoices rather than the duty paid thereon - appellant has not disputed the wrong availment and has claimed the same to be an inadvertent mistake and when it was pointed out paid the entire amount along with interest before issuance of SCN - appellant claiming that in such circumstances, case is covered by section 11A(1)(b)(ii) of CEA, 1944 and no SCN was warranted; that penalty u/s 11AC should not have been imposed. Held: Such mistake can occur only in respect of one or two invoices, however, in the instant case mistake has occurred in 42 invoices and this clearly shows gross negligence of the appellant, therefore, it cannot be said that there is no malafide intention on the part of the appellant - merely by making payment alongwith interest before issuance of show cause notice appellant cannot be absolved from penalty - no reason to interfere in the impugned order - same is upheld and appeal is dismissed: CESTAT [para 5] - Appeal dismissed: MUMBAI CESTAT