2018-TIOL-1362-CESTAT-DEL

CX - Information was received by department that M/s MRTPL, Sameypur Badli, Delhi were indulging in clandestine manufacture and removal of "Gutka" with brand "Pan King" - During investigation, department found at the premises at Libaspur, Delhi, two gutka packing machines which were installed and working in packing and sealing of "Pan King" brand gutka - The evidence of such clandestine manufacturing activity was found in the form of storage of packing materials, raw material mix and even packed gutka - At the factory of M/s MRTPL, at the time of search, the packing machines were found sealed - Sufficient material has been brought on record by Revenue to establish the fact that S/Shri Chander Kumar Gupta and Himanshu Gupta have master-minded the evasion of excise duty by procuring packing machines illegally and installing the same at the premises at Libaspur and getting gutka manufactured and packed in said premises - It has been clearly established that raw material mix for such gutka was prepared in M/s MRTPL factory and transferred to Libaspur - The entire activity has been carried-out and financed by S/Shri Chander Kumar Gupta and Himanshu Gupta. Consequently, their role in the evasion of excise duty stands fully established - It has been argued on behalf of assessee that cross examination was not permitted of the various witnesses whose statements have been relied upon by the adjudicating authority - The witnesses, whose cross examination have been sought, have voluntarily given the statements - Since all the witnesses were under the control of assessee, offering them for cross-examination will not serve any purpose since the witnesses can be easily manipulated to deny their earlier statements - No infirmity found in impugned order - Penalties imposed on these two persons upheld: CESTAT - Appeals dismissed : DELHI CESTAT

2018-TIOL-1361-CESTAT-DEL

CX - the assessee is a leading manufacturer of Cement - Its factories in Rajasthan operate under the Rajasthan Investment Promotion Scheme, wherein it received subsidies - It had to deposit VAT, CST or SGST at the applicable rate with the Govt upon which it would be entitled to disbursement of subsidy - Such subsidy is sanctioned & disbursed in Form 37B & such challan in Form VAT 37B can be utilized to pay VAT liability for subsequent periods - The Revenue opined that the VAT liability discharged by using the investment subsidy granted in Form 37B could not be considered as VAT actually paid u/s 4 of the CEA, 1944 - Thus it included subsidy amount in value of goods cleared & raised demand for differential duty, with interest & penalty -

Held - Considering that an identical issue was settled in the assessee's own case, following relevant findings of the Tribunal therein, the demands are set aside: CESTAT (Para 2, 5) - Appeal allowed : DELHI CESTAT

2018-TIOL-1360-CESTAT-CHD

CX - the assessee company manufactures pipes, which are then cleared to independent buyers as well as to one M/s Subhash Project & Marketing Ltd (SMPL) - M/s SMPL would further clear the pipes to the UP Jal Nigam & would avail exemption under Notfn No 06/2002 - Hence, the assessee reversed the credit availed on the goods cleared to M/s SMPL - However the assessee did not pay duty on these pipes so cleared - Later the Department alleged that the assessee supplied goods to a related entity, whose valuation would be done under Rule 8 r/w Rule 9 of the Valuation Rules, 2002 - Thereby, the Department demanded payment of 8% of the value of the exempted goods cleared - The Department also alleged that the Bearing/Wearing Plates cleared by the assessee without payment of duty is not covered under Notfn No 06/2002, for availing exemption for clearing these goos without payment of duty - Demand for differential duty was raised with interest & penalty - The reversal of Cenvat credit on goods attributable to exempted goods was also denied -

Held - If two directors of the assessee are also directors in M/s SMPL, that cannot be the ground to hold that both are related person - On investigation, the assessee and M/s SPML has clearly explained certain funds transfer entries in their accounts, which is not part of the SCN - Therefore, it cannot be alleged that they are related persons - Merely being group company cannot be the ground to allege that assessee and M/s SPML are related person - There should be a test of mutuality of interest in the activities by each other in their respective firms - From the SCN therefore the assessee and M/s SPML are not related persons - Regarding reversal of credit, the assessee does not maintain separate inventory for exempted & dutiable final products - Thus, it was required to reverse Cenvat Credit equivalent to 8% of the value of the exempted goods under Rule 6(3)(b) of the CCR, 2004 - Such reversal is neither @ 8% of the sale value of exempted pipes nor on actual basis, as all the inputs consumed in the manufacture of exempted goods were not taken into consideration while calculating actual reversal - Moreover, reversal on actual basis at the time of clearance is not permissible under the Rules - Thus the assessee defaulted in proper reversal of credit - Besides, it is also on record that the assessee cleared goods to M/s SPML as well to independent buyers - In that case, the provisions of Rule 9 r/w Rule 8 are inapplicable to the present facts - Therefore the duty demand is unsustainable - Consequently, without Bearing & Wearing Plate pipe cannot be laid down and the same is in the case of pipe fittings - Without pipe fittings also pipe cannot be laid down - Therefore, the assessee is entitled for exemption under Notfn. No. 06/2002 for clearance of Bearing & Wearing Plate: CESTAT (Para 2, 10-15,18) - Appeal allowed : CHANDIGARH CESTAT

2018-TIOL-1359-CESTAT-BANG

CX - Assessee engaged in manufacture of sugar - During course of manufacture of sugar, molasses emerges, which is further utilized by process of fermentation and distillation to produce alcohol - Crux of dispute is regarding duty liability on molasses which is captively consumed, to the extent used in manufacture of alcohol for human consumption - Such alcohol is not levied to Central Excise duty but are cleared on payment of State Excise duty - The Notfn 67/95 is not available in respect of inputs used in manufacture of final products which are exempted from whole of duty or chargeable to 'nil' rate of duty - The question is answered in favour of assessee in case of Manakpur Chini Mills Ltd. 2017-TIOL-2083-CESTAT-ALL - Impugned order set aside: CESTAT - Appeal allowed : BANGALORE CESTAT

 

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