2020-TIOL-73-SC-CX-LB

CCE Vs Universal Ferro & Allied Chemicals Ltd

CX - The assessee is a 100% EoU engaged in the manufacture and processing & clearance of Ferro Manganese and Silicon Manganese falling under Chapter 72 of the Schedule to the CETA 1985 - The assessee cleared such items for export as well as to the DTA unit on payment of Central Excise duty - The Central Intelligence Unit of the Department visited the assessee's premises on received inputs tht the assessee being an EoU, was indulging in job work activity of converting raw material supplied by M/s TISCO - The Revenue opined that such activity was not permissible as per the EXIM Policy of 1997-2002 - Scrutiny of records revealed an MoA between the assessee & TISCO for converting Manganese Ore/Coke into prime Silicon Manganese - As per the agreement, the assessee charged job work charges per MT which included the cost of material added by the assessee - Such charges were to be recovered from M/s TISCO on commercial invoices, which were prepared as per the erstwhile Rule 100E of the Central Excise Rules - Subsequently, the activities of the assessee came to a halt and it was declared a sick company by the BIFR under provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 - Though the assessee converted raw material supplied by TISCO, on the latter making payment of conversion charges - However, while dispatching the Silicon Manganese to TISCO, Excise duty was paod on the value which included cost of raw materials supplied by TISCO as well as inputs used by the assessee from its own purchases - An SCN was issued to the assessee in this regard, wherein it was stated that the Circular No 67/98-Cus permitted the EoUs to undertake job work on behalf of DTA unit only in textile readymade garments, agro-processinjg and granite sectors & another Circular No 74/99 was extended to EoUs to undertake job work on behalf of DTA unit in aquaculture, animal husbandry, electronics hardware & software sectors - The SCN stated that the sector in which the assessee carried out the job work was not covered under either Circular and as such the job work carried out was in violation of EXIM policy - The SCN proposed to charge full Central Excise duty on the Silicon Manganese as per proviso to Section 3(1) of the CEA 1944 - Benefit under Notfn No 8.97 was denied - Central Excise duty short paid on Silicon Manganese cleared to DTA unit was sought to be recovered u/s 11A and 296 MT of Silicon Manganese was proposed to be confiscated - Penalty was also proposed u/r 209 of CER 1944 r/w Section 38A of the CEA - 10 SCNs were issued, making identical allegations, albeit for different periods - On adjudication, the duty demands were confirmed with interest - Penalty was imposed and as the goods were not available for confiscation, redemption fine in lieu thereof was imposed - Personal penalty was also imposed on the chairperson of the assessee-company - The assessee filed appeal before the Commr.(A), who allowed partial relief - On further appeal, the Tribunal set aside the demands in entirety - Hence the Revenue's appeals.

Held - The submission of the Revenue's counsel is that a combined reading of the proviso to Section 3(1) of the Act and Section 5A(1) of the Act would not entitle the Central Government to grant any exemption to an EOU when it brings the goods to any other place in India and the duty that would be leviable would be as if the said goods were imported in India - If such interpretation is accepted, the phrase unless specifically provided in such notification in Section 5A(1) would have to be ignored and the words would be rendered otiose - It is settled principle in law that while interpreting a provision, due weightage would have to be given to each and every word used in the statute - Such an interpretation is impermissible and the harmonious construction of Section 5A(1) of the Act and proviso thereto is that an EoU which brings the excisable goods to any other place in India would not be entitled for a general exemption notification unless it is so specifically provided in such a notification - From a reading of the Exemption Notfn of 1997 as amended by Notfn No 21/97-CE, it is clear that the Govt exempted finished products, rejects & waste or scrap produced or manufactured in a 100% EoU of FTZ wholly from inputs produced or manufactured in India & allowed to be sold in India as per the EXIM policy, from Excise duty leviable u/s 3 of the CEA 1944, as is in excess of an amount equal to the aggregate of the duties of excise leviable under the said Section 3 of the Central Excise Act or under any other law for the time being in force on like goods, produced or manufactured in India other than in a 100% EoU or FTZ if sold in India - Considering the findings of the Apex Court in Sarla Performance Fibers Limited and ors. vs. Commissioner of Central Excise, Surat-II and Siv Industries Ltd. vs. Commissioner of Central Excise & Customs there is no infirmity in the findings of the Tribunal in setting aside the duty demanded: SC Larger Bench

- Revenue's appeal dismissed: SUPREME COURT OF INDIA

2020-TIOL-419-CESTAT-DEL

Ashirwad Ispat RYP Pvt Ltd Vs CC, CGST & CE

CX - Pursuant to the Tribunal order, majority of the demand was set aside - consequently, the appellant approached the department for refund of the amounts in respect of which their appeal was allowed - adjudicating authority allowed refund claim but confirmed the demands along with interest, as held by the Tribunal - grievance of the appellant is that the interest demand involves the period where there were no provisions to demand interest; that the interest, if at all, should have been charged for the period subsequent to passing of the adjudication order, inasmuch as the said amounts were deposited prior to the passing of the final order confirming the demand and, therefore, no liability would arise.

Held: The order of the Tribunal confirming a part of the demand along with interest has attained finality and, therefore, the present argument by the appellant would amount to challenging the confirmation of interest as ordered by the Tribunal and in which matter Bench has no jurisdiction to sit in appeal over the earlier Tribunal order - appellant should have raised their contentions in the earlier proceedings or challenged the Tribunal order passed - as the interest liability stands confirmed by the earlier order of the Tribunal, Bench finds no reasons to interfere in the impugned orders of the authorities below - Appeal rejected: CESTAT [para 4]

- Appeal rejected: DELHI CESTAT

Atul Madhavji Parekh Vs CCGST

CX - Appellant had opted for the SVLDRS, 2019 and subsequently a discharge certificate in form SVLDRS-4 has been issued by the competent authority for full and final settlement of tax dues u/s 127 of the Finance (No.2) Act, 2019 r/w rule 9 of the SVLDRS Rules - appeal filed by assessee, therefore, ceases to exist and the same is accordingly dismissed as withdrawn: CESTAT [para 1, 2]

- Appeal dismissed: MUMBAI CESTAT

CUSTOMS

2020-TIOL-420-CESTAT-MAD

Auto Creators Vs CC

Cus - Investigations were taken up in the year 2011 - 12 and after a gap of around five years, the appellants were issued with Show Cause Notices in 2016 - It was stated in the said Show Cause Notices that the goods were imported from Dubai, UAE and goods were shipped from Germany and scrutiny of documents indicated that no brand name etc. were mentioned while filing the Bills of Entry and they were suitable for high-end vehicles such as Audi, BMW, Benz etc. - Basic allegation in the Show Cause Notice is that the appellant had not declared the brand of the goods and thereby undervalued the goods and, therefore, there was proposal to enhance the assessable value of the goods - In the case of M/s. Auto Creaters, the differential duty demand was Rs.1.38 crores and in the case of M/s. Auto Stores, the differential duty demanded was Rs.80.23 lakhs - demands confirmed, goods confiscated with option to redeem the same on payment of fine and penalties imposed - aggrieved, importers have filed appeals before CESTAT.

Held: Although the adjudicating authority has stated that the goods were found to be branded, the information as to which brand the goods were belonging to is totally missing in the adjudication order - Bench also notes that the objection raised by the appellant in respect of documents which were load port documents is valid and Revenue could not establish that the load port documents were admissible evidence for relying for initiating any proceedings - Supreme Court in the case of Sanjivani Non-Ferrous Trading Pvt. Ltd. - 2018-TIOL-447-SC-CUS has extracted from its decision in the case of South India Television P. Ltd = 2007-TIOL-126-SC-CUS, wherein it was held that if the department wants to allege undervaluation it must make detailed inquiries, collect material and also adequate evidence - When undervaluation is alleged, the department has to prove it by evidence or information about comparable imports and if the department relies on declaration made in the exporting country, it has to show how such declaration was procured - as the department could not establish as to how the information about load port document was procured by the Revenue, therefore, the information stated in the Show Cause Notices obtained from exporting country is not reliable as evidence - other than that there is no evidence relied on in the Show Cause Notice for alleging undervaluation - Held that undervaluation in the present case is not established - in the absence of any contrary evidence, the value actually paid/invoice value has to be accepted as Transaction Value - impugned orders are, therefore, set aside and the appeals are allowed with direction to Revenue to assess the Bills of Entry on the basis of value declared and complete the assessment within a period of two weeks - as provided under Handling of Cargo in Customs Area Regulation, 2009, the appellants are entitled for exemption from any rent or demurrage - Both the appeals are allowed: CESTAT [para 6]

- Appeals allowed: CHENNAI CESTAT