CENTRAL EXCISE SECTION

CCE Vs ACC Ltd

CX – CESTAT while allowing appeals held that Cement sold to the following genre of buyers viz. either to manufacturers, users, asbestos and cement/pipe manufacturers, ready-mix concrete manufacturers or otherwise to builders, as infrastructure/buildings/ government projects construction, educational institutions, hospitals and societies would fall under the category of Institutional Consumer or Industrial Consumer and the provisions applicable to packages intended for retail sale in Chapter II of the said Standards of Weights & Measures Rules, will not apply – so also clearances of 945.05 MTs of Cement for  "self-consumption"  inside the factory and 632.30 MTs unsold quantity at warehouses, by no stretch of imagination would these clearances can be considered as  "retail sales" and the benefit of Notification 4/2006-CE of payment of CE duty @Rs.400/- per tonne cannot be denied to assessee; duty demand in its entirety set aside – Revenue in appeal before Supreme Court.

Held: Issue notice and Tag with SLP(C) Nos. 15416-15417 of 2011: Supreme Court [para 2, 3] - Issue notice : SUPREME COURT OF INDIA

2018-TIOL-471-CESTAT-DEL

CX - Assessee engaged in manufacture of pesticide, fungicides and herbicides and micronutrients/ fertilizers - Based on an intelligence collected, the factory and office premises of M/s. GSCPL were searched by DGCEI - Investigations revealed that assessee have engaged themselves in evasion of CX duty by way of suppression of production of excisable goods and illicit/ clandestine clearance of same on parallel invoices, gate passes and challan without payment of duty - The DGCEI's case was fortified with various corroborative evidences and confessional statements made under Section 14 of CEA, 1944 by Shri Akash Dubey, MD of assessee and Shri Lachchhe Kurmi Patel, the accountant and authorised signatory of assessee - More than 80% of clearances made by assessee are to Govt. agencies such as Markfed and MP Agro - As per the procedure adopted by assessee, goods are transferred on consignment basis, under challan indicating value of goods to Govt. marketing agencies - Thereafter, goods are sold to farmers and details of sales are intimated back to assessee who subsequently issued the commercial invoices as well as central excise invoices for recovery of amount by them and payment of Central Excise duty on goods ultimately sold - After considering the procedure adopted, excise duty is required to be paid at the time of clearance of goods from the factory - Even if sales is on consignment basis, there is no exemption to payment of excise duty - Such excise duty liability cannot be deferred until and after the goods are ultimate sold and payment realized - To this extent, procedure adopted is irregular and amounts to evasion of central excise duty.

The investigating agency, in addition to highlighting irregularities have also gathered other evidences like cash receipts and parallel invoices - It is further on record that for such cash receipts, provisional payment receipts were issued but no Central Excise duty paid was on such goods - These facts also have been admitted by Shri Lachchhe Kurmi Patel, Accountant as well Shri Akash Dubey MD of assessee - None of the statements have been retracted at any time.

After considering the full facts of the case and evidence on record, impugned order is not sustainable inasmuch as it has not considered all the evidences in proper contexts - Adjudicating authority has also completely ignored the irregularity in non payment of duty on goods cleared on consignment basis to Govt. Marketing Agencies - Consequently, matter is required to be sent back to the adjudicating authority for deciding the matter afresh after proper appreciation of evidence: CESTAT  - Matter remanded : DELHI CESTAT

CX - Assessee engaged in manufacture of cement clinker and ordinary Portland cement and availed concessional rate of duty in respect of cement cleared by them during period 01.10.2006 to 03.09.2008 under Notfn 4/2006 - Dispute relates to liability of main assessee to pay duty on cement cleared by them - Revenue held a view that main assessee availed the concessional rate of duty when they have cleared cement with brand name of another person - Charge of clandestinely unaccounted clearance of branded cement was also made against main assessee - Admittedly, assessee did manufacture cement with brand name "Kamdhenu" - Main assessee is claiming that part of goods were cleared with their own brand names - It is necessary for them to support their claim with sustainable documentary evidence - It is the main assessee who claims the concenssional rate of duty available to cement cleared without using another person's brand name - Hence, it is imperative for them to establish the existence of such fact - Assessee have failed to establish such fact categorically - Reasons recorded by original authority are based on material as well as oral evidences gathered during investigation - Accordingly, no merit found in appeal fined by assessee and two of its Directors against confirmation of demand and imposition of penalties - However, penalties imposed on paid employees namely Sh. Ram Kishor, Authorised Signatory and Sh. Bhawani Singh Sekhawat, Munim/ Supervisor of the main assessee are not justifiable - They acted as per the direction of Directors, as paid employees - They did not gain personally in these transactions - Accordingly, penalties imposed on these two persons set aside.

Regarding penalties imposed on M/s Kamdhenu Cement and Sh. Satish Kumar Kabu, Director of M/s Kamdhenu Cement, only allegation in proceedings against them is that they were part of alleged document in form of letter dated 31.12.2007 to claim termination of agreement for use of "Kamdhenu" brand - Termination per se by itself will not help the main assessee to claim concession under said notfn - This was quoted as corroboration by main assessee for their claim - This situation is not covered by provisions of Rule 26(2) (ii) of CER, 2002 - No other action or role on the part of these two assessees have been discussed to justify penalty on them under Rule 26 of CER, 2002 - Accordingly, penalties imposed on them are set aside: CESTAT - Appeals partly allowed : DELHI CESTAT

CX - Assessee engaged in manufacture of Molasses & Special Denatured Spirit - During audit, on scrutiny of their records, it was noticed that assessee during the period the period 7.2.2006 to 14.4.2009 cleared iron waste & scrap without payment of duty - Alleging that the said Iron and scrap is generated out of the capital goods installed in the factory, SCN was issued for recovery of the duty along with interest and penalty - A plain reading of Rule 3(5A) of CCR, 2004 makes it clear that waste and scrap of capital goods on which CENVAT credit has been availed, if cleared from factory then the manufacturer shall pay an amount equal to the duty leviable on the transaction value of the waste and scrap - Said rule would come into play only when capital goods credit had been availed by assessee and later waste and scrap arose out of said capital goods - Though assessee has been vehemently arguing that they had received capital goods priot 1994 and the worn machines/parts were removed as waste and scrap, the said facts had not been verified - No doubt the onus lies on the department to establish that waste and scrap did arise out of capital goods on which credit availed, but, in the present case, evidences adduced by the assessee in establishing the fact no CENVAT credit had been availed on plant and machinery, cleared as waste and scrap, needs to be verified, before confirming the duty on transaction value of waste and scrap under Rule 3(5A) of CCR,2004: CESTAT - Matter remanded : AHMEDABAD CESTAT

CX - the assessee-company manufactured corrugated boxes, corrugated sheets & rolls, and on which the assessee availed Cenvat credit - The Department observed that for two months, the assessee defaulted in payment of duty, since it was not paid within 30 days of the respective dates for payment of duty - Thus, duty demand was imposed on consignment basis & the assessee was barred from availing credit during such time - The Department further alleged that the assessee had not paid duty for another period - SCN was issued raising duty demand with interest & penalty was imposed - Held - On the date of issue of SCN, there was no default by the assessee - Further, the SCN was admittedly issued invoking extended limitation, without there being any grounds for the same - Hence the SCN is unsustainable: CESTAT (Para 2,8) - Appeal Dismissed : ALLAHABAD CESTAT

Cus - Assessee filed Bill of Entry for clearance of imported Hot Rolled Steel Coils Non Alloy - On examination it was found that goods were having width more than 600 MM - With effect from 02.09.2015 Safeguard Duty was imposed on Hot Rolled Steel Coils having width more than 600 MM - Original Authority ordered confiscation of said goods - The value of goods imported was enhanced and option to redeem was given on payment of fine - Further, assessee was imposed with a penalty of Rs. 2 lakhs - On appeal, Commissioner (A) modified the original order by imposition of penalty under Section 114 A of Customs Act, 1962 in place of penalty imposed under Section 112 of said Act by Original Authority - Assessee has complied with requirements of first and second proviso of said Section 114A - Therefore, assessee is entitled for imposition of penalty equivalent to 25% of duty under first proviso to Section 114 A of Customs Act, 1962 - Therefore, impugned O-I-A modified and penalty reduced under Section 114 A ibid in impugned O-I-A to 25% of penalty imposed in said order: CESTAT  - Appeal allowed : ALLAHABAD CESTAT