2019-TIOL-NEWS-264, Dated: Saturday, November 09, 2019

ST - Directorate General of Central Excise Intelligence had issued a show cause notice, dated 08.09.2015, to the petitioner, demanding service tax - The Additional Commissioner of Central Excise, Salem, vide order, dated 27.09.2016, has confirmed the order of recovery and also imposed penalties - Against the Original Order, an appeal was filed by the Managing Director of the petitioner-firm with a delay of 272 days, due to reasons, beyond his control, like death of his mother, hospitalization and recovery of his illness - The said appeal was dismissed by the Commissioner (Appeals), Coimbatore, and the appeal before the CESTAT, Chennai was also dismissed on 16.04.2019 - Civil Miscellaneous appeal filed against this order with a request to remit the matter to the Commissioner(A).

Held: In a similar case in Falcon Types Ltd. - 2016-TIOL-1712-HC-MAD-CUS, Bench has considered the power of the appellate authority to condone the delay beyond the extendable period and concluded that when the appeal itself is time barred and when the appellate authority or the CESTAT, Chennai, cannot condone the delay, in terms of the statutory provisions, prescribing a specific period of limitation, Court is not inclined to interfere with the order of the Tribunal - Petition dismissed: High Court [para 3, 4]

2019-TIOL-3247-CESTAT-MUM

Tristar Enterprises Vs CCE

CX - Appellant had procured various indigenous raw materials falling under Chapter 32 and 39 of CETA and availed cenvat credit of the duty paid on the said raw materials - Appellant had undertaken certain process of packing, repacking, labeling, relabeling etc. on this product and discharged duty on the same on clearance of the goods from the factory - Alleging that the processes undertaken do not result into manufacture as defined under Section 2(f) of the Central Excise Act, 1944, show cause notice was issued to the appellant on 26.04.2011 for the period April 2006 to September 2009, proposing recovery of inadmissible credit of Rs.1,61,38,766/- and the amount of duty collected from the buyers' customers recoverable under Section 11D of the Central Excise Act, 1944 with interest and penalty - demand confirmed, therefore, appeal to CESTAT.

Held: Issue is no more res integra being covered by the judgment of the Bombay High Court in the case of Ajinkya Enterprises - 2012-TIOL-578-HC-MUM-CX where it is held that once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture - principle laid down has also been followed by Tribunal in a number of cases - following the aforesaid precedents, Bench does not find merit in the impugned order - same is, therefore, set aside and the appeal is allowed with consequential relief, if any: CESTAT [para 5, 5.1, 6]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-3246-CESTAT-MUM

Savita Oil Technologies Ltd Vs CCE

CX - Provisional assessments were finalized and it was held by the department that the appellant had paid excess duty in respect of goods sold from depot - accordingly, refund claims were filed and were adjudicated favourably, however, instead of paying the refund to the appellant, the Assistant Commissioner credited the same to the Consumer Welfare Fund - as these orders were upheld by Commissioner(A), the assessee is before the CESTAT.

Held: Rebuttable presumption has been made in Section 11B(2) ibid, that the refund claim amount, instead of being paid to the claimant, should be credited to the Consumer Welfare Fund - For ascertaining the fact, whether the amount in question should be credited to the Consumer Welfare Fund or should be paid to the claimant, the onus entirely lies with the claimant to prove that the incidence of the excess duty, in effect, has not been passed on to any other person and same has been borne by it all along - In the present case, on perusal of the entries made in the Balance Sheet under the heads of account of "loans and advances", Bench finds that the amount of Rs.4,407.19 lacs has been reflected as advances - Further, bifurcation of such amount has also been reflected in the annexure attached to the balance sheet, confirming the fact that the refund amount in question, is the component of such advance amount reflected at Schedule 10 in the Balance Sheet - Thus, it is conclusively proved that the incidence of excess paid duty, in this case, had not been passed on by the appellant to any other person and same has been borne by it all along, till the date of filing of the refund application - excess duty amount indicated in the profit and loss account was towards normal sales transaction value, at which the goods were sold by the appellant - moreover, the refund in question was not a part of excess duty indicated in the profit and loss account and separate accounting treatment was provided in the Balance Sheet, therefore, interpretation placed by the Commissioner (Appeals) regarding transfer of refund amount to the Consumer Welfare Fund cannot be sustained - order set aside and appeals allowed with consequential relief: CESTAT [para 5, 6]

- Appeals allowed: MUMBAI CESTAT

2019-TIOL-3245-CESTAT-MUM

Wellman Hindustan Ltd Vs CCE

CX - Valuation - Demands were confirmed on the appellant on the ground that it had not followed the proper procedure in construing the sale value inasmuch as the raw material received from the supplier M/s. Raymond Woollen Mills Ltd. was itself undervalued, by not loading the indirect cost in their price declaration - appeal to CESTAT.

Held: Commissioner (Appeals) has recorded the submissions of the appellant made before him in the appeal memorandum, contending inter alia, that the supplier M/s. Raymond Woollen Mills Ltd. was a Central Excise registered assessee and the valuation declared by them was duly accepted by the jurisdictional Central Excise authorities and the assessment was also final - however, no finding has been recorded with regard to such submission of the appellant - as an independent manufacturer, the assessable value is determinable under Section 4(1)(a) of the Act and there was no necessity of going into the Valuation Rules for such determination - Further, Rule 6 of the Valuation Rules is only applicable to the case of captive consumption and not to the goods manufactured on job work basis - appellant had appropriately discharged the central excise duty liability on the goods manufactured on job work basis and supplied to the supplier M/s. Raymond Woollen Mills Ltd. as the raw materials had been subject to valuation as required in Section 4 of Central Excise Act, 1944 before arriving at the factory of the appellant - no merit in the impugned orders hence the same are set aside and the appeals are allowed: CESTAT [para 6, 7]

- Appeals allowed: MUMBAI CESTAT

2019-TIOL-3244-CESTAT-MUM

Unity Pharma Chem Vs CCGST & CE

CX - Issue involved is whether the supply made to 100% EOU should be considered as export and can the assessee be entitled for refund of accumulated CENVAT Credit under Rule 5 of the Rules.

Held: Clause (1A) was inserted in the Explanation 1 appended to Rule 5 of the Rules vide Notification No. 6/2015-CE (N.T.), dated 01.03.2015 - The said amended Rule has clarified that "export of goods means any goods which are to be taken out of India to a place outside India" - In the present appeals, since the appellant had cleared the goods to 100% EOUs located within the country, the requirement of taking out the goods to a place outside India is not satisfied - In view of the fact that the refund applications were filed after amendment of Rule 5 of the Rules, for claiming refund benefit, requirements contained in the statute are strictly to be adhered to - Since the goods in question were not physically exported outside country, benefit of refund provided under the said Rules shall not be applicable to the appellant – no merit in appeal, hence same is dismissed: CESTAT [para 4, 5]

- Appeal dismissed: MUMBAI CESTAT

Cus - NDPS - Seizure of ganja about 1.5 kg from trolley bag of applicant in the security hold area of the International Departure terminal at Calicut International Airport while he was waiting to board the flight bound for Dubai - Accused arrested - Application is filed under Section 439 of the Code of Criminal Procedure - it is submitted that the applicant is a young man aged 24 years, who was requested by his employer to travel to Dubai for some business purpose and the applicant was not aware of the presence of the contraband in the bag which was entrusted with him; that the applicant be released on bail as the investigation has proceeded to the end stages.

Held: Though the allegations are extremely grave, fact remains that the quantity seized from the possession of the applicant is just above the upper limit of the smaller quantity - There is no case for the prosecution that the applicant is involved in any other crimes - Furthermore, the case records reveal that the investigation has made much headway - In the facts and circumstances, Bench is of the view that by imposing stringent conditions the applicant can be enlarged on bail - applicant shall be released on bail on his executing a bond for Rs.50,000/- with two solvent sureties each for the like sum and subject to conditions as detailed: High Court [para 6]

Cus - Valuation - Rigidity of a contract entered into by a public sector unit, such as M/s Mazgaon Dock Ltd lacks comparability with the flexibility in re-negotiation of a contract of the appellant when the price of steel was claimed to have declined sharply - moreover, it is contended by the appellant that M/s Mazgaon Dock Ltd had imported 'prime goods' whereas theirs, apparent from the contract, are 'ex-stock' and that the appellant had imported a much higher quantity than the meagre quantity procured by M/s Mazgaon Dock Ltd. - circumstances in which M/s Mazgaon Dock Ltd entered into the contract with the supplier and the scope for flexibility arising from the declining of price of steel which may have impacted the contract entered into by the appellant herein almost a year later has not been considered - further, it is on record that imports effected by others about three to four months before the impugned goods were at higher prices than even that at which M/s Mazgaon Dock Ltd. - Bench is unable to satisfy itself that the imports by M/s Mazgaon Dock Ltd could be designated as 'similar' merely because of being contemporaneous - excess undervaluation, as alleged, should have been subject to serious investigation and appropriate penalties imposed if found to be so - In the absence of the same, exercise of enhancement of value so undertaken was without sufficient evidence on hand - impugned order set aside and appeal allowed: CESTAT [para 7 to 10]