Jubilant Life Sciences Ltd Vs CCE

CX - Assessee were a 100% EOU and they were manufacturing chemicals which were generally used by manufacturers of pharmaceutical preparations or by pesticides manufacturers - They sought to exit from EOU Scheme and got in-principle approval for the same - On the basis of audit report, a SCN was issued to assessee where there was allegation that assessee was not eligible for Notfn 23/2003-Central Excise and that was under-valuation of Pyridine Residue and differential Central Excise duty of Rs.3,37,48,484/- was demanded in respect of duty paid on 12/04/2011 & 14/04/2011 on the work in progress, intermediate goods and finished goods lying in stock in EOU or lying at the premises of job workers - Further, differential Central Excise duty of Rs.8,12,05,337/- was also demanded on clearance of Remnants which was also called Pyridine Residue from EOU to DTA Unit for period from 01/04/2007 to 31/03/2011 and under-valuation for period from 01/02/2010 to 31/03/2011 - They were also called upon to show cause as to why Customs duty of Rs.9,64,168/- should not be demanded on imported capital goods by denying the benefit of depreciation - Differential duty of Rs.3,37,48,484/- is not sustainable for reasons that differential duty was demanded on goods which had not came into existence and on the goods which were not removed from factory of manufacture of assessee or their job workers - Therefore, confirmation of demand of Rs.3,37,48,484/-, interest thereon and equal penalty are not sustainable - Further, in respect of issue relating to rate of duty and value in respect of Remnants, the rate of duty was decided through proceedings initiated by SCN and therefore, demand on the issue of rate of duty is hit by limitation - Confirmation of demand of under valuation on Remnants is not sustainable because the same was confirmed by relying on CBEC Circular dated 29/09/1994, which is rescinded through Circular dated 16/08/2010 - Therefore, demand of differential duty of Rs.8,12,05,337/-, interest thereon and equal penalty are not sustainable- Further, confirmation of demand of Rs.9,64,168/- was on the ground that they were not capital goods since they were not put to use is not sustainable because catalyst on first charge were treated as capital goods and that there was no such allegation in SCN and therefore, adjudication proceedings travelled beyond the SCN and therefore confirmation of demand is not sustainable: CESTAT - Appeal allowed : ALLAHABAD CESTAT

Medley Pharmaceuticals Ltd Vs CCE & ST

CX- The assessee is engaged in the manufacture of medicines in its factory at J&K - The assessee imported raw materials and paid additional duty of customs - They did not avail the Cenvat credit of the duty paid by them leading to falling short in cash of the Cenvat credit which was paid in cash by debiting the personal ledger account - The assessee claimed refund of the duty so paid in cash by way of self-crediting the same into their accounts - However, the assessee corrected their error by availing credit the second time which would be utilized for furture payment of duty on the final product - A mandatory condition in Notification No. 56/2002-CE for the manufacturer was to first utilise the whole of the cenvat credit available to them on the last day of month - The Revenue opined that the action of payment of duty by cash and subsequently claiming the refund has resulted in excess and SCN was issued for intiation of recovery proceedings.

Held - There was difference of opinion between the members on whether due to non-compliance with the mandatory condition of Notification No. 56/2002-CE, the demand of wrongly availed refund by way of self-credit should be upheld but no interest and penalty be imposed - The Third Member in consonance with the Member (T) noted that the assessee followed the correct procedure on the second time though on the first instance they have wrongly taken direct self-credit - Therefore, the demand as also the interest and penalty imposition are set aside: CESTAT ( Para 2, 3, 4) - Appeal allowed : CHANDIGARH CESTAT

Smr Cotton Mills Pvt Ltd Vs CCE

CX - Assessee is manufacturer of viscose staple fibre yarn - The allegation against assessee is that they have received price higher than that mentioned in Central Excise invoice while clearing the yarn and thus have evaded payment of excise duty - The main evidence relied by department is the Roker Ledger recovered from M/s. KTC and the statement of Shri R. Pari - The said Roker Ledger was maintained by M/s. KTC only - Further, the said M/s. KTC was acting as broker for several other yarn manufacturer - In this ledger M/s. KTC is said to have noted that the yarn was sold at higher price to various buyers - They have received commission from buyers - Needless to say that these are third party documents and have to be corroborated by independent evidence - The finding of adjudicating authority has been blanketly accepted by first appellate authority to uphold the demand - Interestingly M/s. KTC is not a co-noticee to the proceedings - There is no independent evidence forthcoming to connect the assessee with the entries in Roker Ledger - Again, the statement of Director has been relied by authorities below by picking and choosing the sentence - The deposition as a whole has to be considered - Even though M/s. KTC who is a yarn broker might have received extra consideration or commission, there is no cogent evidence to establish that the assessee have received consideration over and above the invoice value - Material placed before Tribunal is insufficient to hold that assessees have received higher consideration as alleged by department - Courts in several decisions have held that the demand cannot be based merely on third party documents or statements recorded - In the result, impugned order cannot sustain and same is set aside: CESTAT - Appeal allowed : CHENNAI CESTAT