CX - Appellant had removed machinery to its Bhosari godown on payment of appropriate Central Excise duty - later, due to some reason, the godown returned the goods and on return the appellant availed the entire CENVAT credit of the duty initially paid - goods were subsequently removed to the buyer's premises on payment of CE duty on the transaction value - Audit officers observed that the duty so paid was less than the amount re-credited at the time of receipt of these goods from its godown - Revenue contended that the appellant was liable to pay/reverse the CENVAT credit in terms of rule 16(2) of the CER, 2002 - SCN was issued and the duty demand was confirmed by the lower authorities - appeal to CESTAT - Appellant contending that out of 13 numbers of such consignments, in respect of eight consignments, they had paid excess Central Excise duty and in rest of the five cases, lesser amount of duty had been paid and that the overall effect is that they paid excess CE duty of Rs.15,94,434/-.

Held: Case of the appellant falls under the provisions of rule 16(2) of the CER inasmuch as the goods removed from its godown were not subjected to any manufacturing process and the goods were removed to the buyers in as it is condition - since on receipt of goods in the factory, the appellant had availed CENVAT credit of the duty amount indicated in the original invoices issued to the godown, the appellant was required to pay/reverse the equal amount of CENVAT credit so availed at the time of removal of the same goods from the factory to the buyer's premises - contention of the appellant that that they paid excess duty in respect of some consignments and the same can be adjusted against the disputed consignments is not in agreement with the statutory provisions which recognizes removal of each consignment of excisable goods from the factory for the purpose of determination of the CE duty liability - there is no specific mandate in the statute that in case of short payment of duty, the same can be automatically adjusted from the clearances made at the higher prices previously - separate provisions have been made for claim of refund of such excess duty paid - no infirmity in the order insofar as confirmation of duty liability is concerned - however, considering the fact that during the relevant period appellant had paid excess duty of about Rs.15 lakhs, it cannot be said that the short payment was attributable to reason of fraud, collusion, suppression etc. with intent to defraud the government revenue - penalty provisions u/r 25 of CER, 2002 r/w s.11AC cannot be invoked in the circumstances of the case - penalty set aside and Appeal partly allowed: CESTAT [para 5, 6]

- Appeal partly allowed: MUMBAI CESTAT

CX - The assessee is engaged in manufacture and clearance of Spray Nozzles - During course of its activity, assessee during the period under dispute had undertaken E-1 sales; had supplied goods from manufacturing premises directly to the customer's site - This prompted the Revenue to consider this activity as a trading activity consequent to which, a SCN was issued calling upon the assessee as to why amount payable on value of exempted service in terms of Rule 6(3)(i) of CCR, 2004 for the year 2010-11 to 2014-15 should not be demanded and recovered, apart from interest and penalty as applicable - The question to be decided is whether the trading activity undertook by assessee for the period July 2010 to March 2015 is an exempted service - For the sake of convenience, the period July 2010 to March 2015 is divided into three parts i.e. (i) July 2010 to March 2011 (ii) April 2011 to June 2012 and (iii) July 2012 to March 2015 - Rule 6 casted an obligation on the manufacturer or purchaser to reverse such of the cenvat credit if the input on which the cenvat credit availed is used in or in relation to the manufacture of exempted goods and its clearance upto the place of removal or for provision of exempted services which was introduced w.e.f. 01.04.2011 - This being prospective in nature, the amended provision cannot be held to be applicable for the first period, i.e., July 2010 to March 2011 - Therefore, when there is no liability at all in terms of the very provisions of the Rule, the authority erred in confirming the demand for the first period.

For the second period i.e. April 2011 to June 2012, the definition of 'exempted service' was amended by including trading activity, but however, in terms of Rule 6, the value of non-excisable goods shall be the invoice/agreement/contract value and where such value is not available, the same to be determined by using reasonable means consistent with the principles of valuation - This was further cleared by introduction of Rule 6(3)(a) and Rule 6(3A) but with a condition to be exercised at the option of the assessee/manufacturer - Adjudicating authority is directed to permit the assessee to exercise option in terms of Rule 6(3)(a) who shall also consider the ratio decidendi of the cases and arrive at an appropriate exempted value.

In the third period i.e. July 2012 to March 2015, assessee has submitted that it had followed Rule 6(3A) and reversed an amount which again has neither been countered nor disbelieved by the adjudicating authority - For the third period the situation prevailing during first period applies and therefore, as there was no mechanism in statute to evaluate an exempted service, there is no question of any liability or obligation: CESTAT

- Appeal partly allowed: BANGALORE CESTAT

CX - The assessee company manufactures tea processing machinery - It availed Cenvat credit on inputs & cleared the goods for home consumption on payment of duty - It also manufactures CTC machinery used to cut & roll tea - Such machinery is exempted under Notfn No 06/2006-CE - While such exemption was not available for a particular period, the assessee availed such exemption - Duty demand was raised with interest for recovery of the same - Penalty was also imposed u/r 25 of CER 2002 - Such demands were sustained by the Appellate authority.

Held - The exemption could not have been availed for the period in question - The assessee claimed to have not manufactured any goods & that those goods had been sold as second sales - However, such claims of the assessee were rejected by the adjudicating authority for want of supporting material or evidence - Considering the passage of time, it is futile to remand the matter - Hence the demands are sustained - Nonetheless, considering the facts at hand, the penalty is unwarranted & merits being set aside: CESTAT (Para 1,5)

- Assessee's appeal partly allowed: CHENNAI CESTAT