CENTRAL EXCISE

2019-TIOL-328-CESTAT-MUM + Case Story

Chaitanya Ropes Pvt Ltd Vs CCE

CX - Definition of 'Place of removal' in section 4 of the CEA, 1944 is relevant only for determination of value for assessment of duty and cannot be applied for determining rate of duty which is governed by rule 5 of CER, 2002 in pursuance of section 3 of the CEA, 1944 - enhanced rate of duty cannot be applied to goods already lying in stock with the consignment agent - impugned order is patently beyond the scope of law, hence set aside - appeal allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-312-CESTAT-AHM

CX - The assessee is Proprietor of M/s. Lakshmi Scaff and M/s. Vel Scaff - Based on the information received, the Preventive Unit of Central Excise visited the factory premises of both M/s. Lakshmi Scaff and M/s. Vel Scaff - During visit, the officers noticed that in addition to sale of scaffoldings/propping equipments, these firms had also undertaken manufacture and supply of scaffoldings/propping equipments to some of construction companies on job work basis - The foremost contention put forward by assessee is that they have not undertaken any manufacture of goods and in fact the goods are manufactured by the job workers - There is no mahazar drawn up to show that there were any machinery at the premises at the time of inspection - There is nothing to show that there were machines in the premises or raw materials and finished products - There is no evidence put forth by department to show whether the assessee had engaged any labourers in premises for carrying out the manufacturing activity - For manufacturing these goods, activities such as cutting and bending of sheets and rods, cutting and drilling of flats and angles, cutting, drilling and threading of pipes, welding, notching and welding have to be done - Various machines like sheering and cutting machine, bending machine, drilling machine, grinding machine and welding machines are needed to carry out these activities/operations - Mere fact that there was no machines in premises at the time of inspection would lead to the strong inference that the assessee has not carried out any manufacturing activity in both the premises - The department has failed to draw up panchanama during the date of visit so as to establish that assessee was manufacturing goods in the premises - Further, there is no evidence to show that he had engaged labourers for manufacture and supply of such huge quantity of goods - The assessee had procured the goods from job workers for supply to construction companies - The department has failed to establish that assessee has manufactured the goods and therefore the demand of excise duty cannot sustain: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2019-TIOL-311-CESTAT-BANG

CX - The assessee is engaged in manufacture of steel fabricated frames and stainless steel fabrication and availed cenvat credit under provisions of CCR, 2004 - During investigation, it was revealed that assessee has imported capital goods ‘laser cutting machine' from Japan and availed 50% cenvat credit on the said machine during March 2011 - On these allegations, a SCN was issued demanding being the duty short paid by assessee under Section 11A(4) & (5) of the Act and irregular credit by Unit l without the capital goods available in their Unit under Rule 14 of CCR, 2004 along with interest and penalty - It is a fact that both the Unit l and Unit ll belong to the assessee - Assessee have transferred the capital asset from their Unit l to Unit ll by issuing an invoice but both the authorities have considered that it is a sale from assessee to its another unit - Both the units belong to assessee and there was technical lapse on the part of assessee to avail cenvat credit in Unit l but same was reversed along with interest after the same was detected by Revenue - Further, Commissioner (A) has not considered the grounds taken by assessee regarding the limitation as well as revenue-neutral situation as pleaded by assessee and has merely reiterated and accepted the O-I-O - The statements recorded by Department during investigation have also not been given to the assessee in respect of grounds taken by them - Further, imposing the penalty on the firm as well as on the partner is not permissible under law as there is no difference between the firm and its partner and it amounts to double penalty on the same partner and in view of decisions relied upon by assessee, penalty on the partner as well as on the firm is not permitted - This case needs to be remanded back to the original authority for proper adjudication after considering all the grounds taken by assessee in support of their claim - Consequently, both the appeals are allowed by way of remand: CESTAT

- Matter remanded: BANGALORE CESTAT

2019-TIOL-310-CESTAT-HYD

CX - Assessee is engaged in trading of hardware items and also manufacture and sale of steel doors and also provides taxable services - They availed CENVAT credit of common input services as also input services and inputs; had not availed CENVAT credit of service tax paid on services utilised for exempted services and reversed the CENVAT credit attributable to trade activity based upon the turnover as provided under Rule 6(2) of CCR, 2004 - There is no dispute as to the fact that assessee during the period in question had reversed CENVAT credit, attributable to trading activity on a mathematical formula which was followed by him which is the turnover of trading activity of the total turnover multiplied by CENVAT credit availed on common input services, that every month they have been filing the returns with the authorities giving all the details of such reversals; that many audits have taken place in the factory premises and only in subsequent audit, had brought out this anomaly - The two decisions of Tribunal in Trans Asian Shipping Services Pvt. Ltd 2018-TIOL-3724-CESTAT-BANG and Sify Technologies Ltd. 2016-TIOL-911-CESTAT-MAD are directly on the point of Rule 6(2) which are applicable in the case in hand and applying the ratio of decisions of Tribunal, impugned order is unsustainable on merits - As regards the question of invoking extended period in a situation wherein the records of assessee were audited time and again, the Tribunal in case of Sanjay Automobile Engineering Pvt. Ltd. 2016-TIOL-1314-CESTAT-MUM following the judgment of High Court of Karnataka in case of MTR Foods 2011-TIOL-696-HC-KAR-CX held that there cannot be any allegation of mis-statement or suppression of facts when audits have been conducted at regular intervals - Audits were regularly conducted and this objection was never raised, in view of it, even on limitation also assessee succeeds - Appeal of assessee succeeds on merits as well as on limitation: CESTAT

- Appeal allowed: HYDERABAD CESTAT