HIGH COURT RULING (CENTRAL EXCISE)

Transcription

1 2016-TIOL-1876-HC-TRIPURA-CX HIGH COURT RULING (CENTRAL EXCISE) Dharampal Premchand Ltd (Agartala Unit) Vs UoI (Dated: January 8, 2016) CX - NE exemption - Notification 11/2007-CE dated is hit by the promissory estoppel; cannot be sustained and accordingly is set aside - petitioner would continue to get the benefit in terms of the promise re -extended by para 2 of the Office Memorandum dated for the remaining period in terms of NEIP, Petition allowed to the extent as indicated: High Court 2016-TIOL-1866-HC-P&H-CX CCE Vs Microtek Forgings (Dated: August 12, 2016) CX - Limitation - Though issue has been decided on merits in favour of revenue referring the judgment of Supreme Court in case of Maruti Suzuki India Ltd TIOL-74-SC-CX and Super Synotex (India) Ltd TIOL-19-SC-CX however, on ground of limitation, issue was decided in favour of assessee - As per CBEC Circular dated , any amount of concession on sales tax retained by assessee is not required to be added in assessable value - Assessee cannot be said to be at fault, hence, extended period of limitation is not available: HC 2016-TIOL-1850-HC-P&H-CX Somson Exports Vs UoI (Dated: August 11, 2016) Central Excise - Revision under Section 35EE - Revision by the same rank of officer who passed the impugned order Court in NVR Forgings case 2016-TIOL HC- P&H-CX while considering the same issue relied upon the judgment in case of M/s Prakash Pipes Industries Limited's case wherein, while considering identical situation, after examining the relevant case law on the point, it was held that the revision by the officer of the same rank was not permissible - Impugned order was passed by the Joint Secretary to Government of India who was also Commissioner of Central Excise and Customs - Thus, the order in appeal as well as revisionary order had been passed by the officer of the same rank which is not permissible as per law - Impugned order is set aside with liberty to the respondent Revenue to proceed afresh in accordance with law Petition disposed of: High Court [para 4, 6] 2016-TIOL-1849-HC-P&H-CX PR CCE Vs Ucal Fuel Systems Ltd (Dated: August 9, 2016) CX - Whether any amount of concession on sales tax retained by the respondent is required to be added in the assessable value - Supreme Court in case of Maruti Suzuki India Ltd TIOL-74-SC-CX has held that the transaction value was required to be calculated by including the amount retained by the assessee - however, during the relevant period there was a CBEC Circular dated which provided that any amount of concession on sales tax retained by the respondent is not required to be added in the assessable value - in view the aforesaid facts, the assessee cannot be said to be at fault and hence, the extended period of limitation was not available - No substantial question of law arises - Appeal dismissed: High Court [para 2, 4, 5]

2 2016-TIOL-1828-HC-KAR-CX CCE & ST Vs Ultra Tech Cement Ltd (Dated: June 29, 2016) Central Excise - CENVAT Credit - The dispute in the instant case relates to admissibility of credit of service tax paid on road freight (GTA) towards outward transportation - Revenue agitates the impugned order passed by Tribunal on the grounds that the Tribunal did not examine whether the Board Circular was complied with or whether the impugned credit was admissible. Held: Facts prove that the goods were delivered on FOR basis and it is responsibility of the appellant to deliver the goods in good condition till it reaches the destination and accordingly ownership/title of the goods were with the appellant and hence the appellant has satisfied all the three conditions as per the Board Circular dated i.e. (i) regarding ownership of the goods till the delivery of the goods at the purchaser's door step., (ii) seller bearing the risk of or loss or damage to the goods during transit to the destination and, iii) freight charges to be integral part of the price of the goods - finding of fact arrived at by the appellate authority that the respondent satisfied of the conditions of the circular - the only aspects agitated before the Tribunal was, availment of CENVAT credit on service tax paid on GTA services availed for outward transportation of the goods from the assessee's factory/premises to the customer's premises - The finding of fact of the appellate authority is not challenged; and the Tribunal has found that the CENVAT credit on service tax was available - when the finding of fact is already concluded and not even challenged before the Tribunal, the question of finding of fact shall stand concluded - any assessee/party may agitate binding effect of the circular but it would not lie in the mouth of the Department-appellant herein to contend that the circular is not binding - merely because the matter is carried before the Apex Court against the decision of the Calcutta High Court, there would be no case for consideration, on the contrary, no substantial questions of law would arise since the availment of CENVAT credit is expressly made so permissible by the circular issued by the competent authority and the appellate authority having found that all conditions of the circular were satisfied - no case made out for interference with impugned order 2016-TIOL-1827-HC-MAD-CX Thirumalai Vasan Sago & Starch Products Vs CC (Dated: July 19, 2016) Central Excise - Exemption - Petitioner is a Manufacturer of Tapioca Sago (Sabudana) - With effect from , Excise Duty was levied (at 1%) on Tapioca and the substitutes therefrom manufactured from starch; and by Notification No.12/2013-CE dated , exemption was granted prospectively; i.e. with effect from Appellant filed W.P.No of 2015, to forbear the first respondent from in any manner proceeding to assess or recover central excise duty on the clearance of Sabudana for the period between and pending disposal of the application dated filed before the 3rd respondent herein - The petitioner has also filed W.P.No of 2015, to direct the third respondent to dispose the Application dated , invoking section 11C of the Central Excise Act, 1944 and waive the Central Excise Duty liability on the clearance of Tapioca Sago (Sabudana) for the period between and Held: During the pendency of the Writ Petitions, it is submitted that the Government of India by an order dated , has rejected the petitioner's request for grant of exemption under Sec 11C of the CEA apart from the plea raised by the petitioner with regard to the claim of exemption under section 11-C of the Central Excise Act, the petitioner in the affidavits filed in support of the Writ Petitions raised other grounds on merits as well as on the ground of limitation and those issues may be left open to be adjudicated upon by the petitioner before the appropriate Forum, on merits as well as on law - In the light of the above, the Writ Petitions are dismissed as infructuous, leaving it open to the petitioner to raise all the contentions before the appropria te Forum [Para 4-6]

3 2016-TIOL-1826-HC-MAD-CX CCE Vs Salem Co-Operative Sugar Mills Ltd (Dated: July 22, 2016) Central Excise - CENVAT Credit - Respondent is engaged in manufacture of sugar - Molasses manufactured during the course of manufacture of sugar, as well as procured from outside on payment of duty, is being captively consumed on payment of duty for manufa cturing natural alcohol, denatured spirit and ethanol in their distillery plant - They had availed cenvat credit of duty paid on both molasses manufactured by them and bought out molasses and utilised the same for payment of duty on final products - They followed proportionate reversal up to Dec 2005 and paid 10% of the sale price of the exempted goods viz. "un-denatured ethyl alcohol, rectified spirit and extra neutral alcohol - With effect from the above said C.H.No.2204 was revised to C.H.No.2207 under the new 8 digit tariff classification - As per the provisions of Rule 6(3)(a)(i) of Cenvat Credit Rules, 2004, they were required to pay an amount equivalent to the cenvat credit attributable to molasses used in the manufacture of non-dutiable final products at the time of their clearance from their factory - As per the provisions of erstwhile rule 6(3)(a)(i) of the Cenvat Credit Rules, 2004, the respondent was not entitled to pay an amount of 10% of the total price of the un-denatured ethyl alcohol cleared from the factory in terms of Rule 6(3)(b) of Cenvat Credit Rules, 2004 and hence demand proceedings were initiated against the appellant - Cenvat credit on molasses denied in adjudication, and demand for its recovery with interest and penalty co nfirmed - The Tribunal dismissed the appeal, now agitated by instant writ. Held: Impugned Final Order dated passed by Customs, Excise and Service Tax Appellate Tribunal, Chennai is set aside; and the matter is remanded to Tribunal to deal with the above issues in accordance with law. [Para 10] 2016-TIOL-1825-HC-MAD-CX CCE Vs Adhavan Processor (P) Ltd (Dated: July 29, 2016) Central Excise - ACP based levy - Respondent firm are processors of textile fabrics and were paying duty under Section 3 of the Central Excise Act, From , compounded levy scheme was introduced to independent textile processors under Section 3-A of the Central Excise Act, 1944 and Rules were framed as per Notification No.36/98-Central Excise and 42/98-Central Excise, both dated the original authority determined the annual production capacity and consequently, the rate of duty applicable for March 2000 and with effect from respectively, under sub rule (3) of Rule 4 of Hot Air Stenter Independent Textile Processors Annual Capacity Determination (Amendment) Rules, 2000 vide orders dated and aggrieved by the determination of the annual production capacity and consequential rate of duty, the assessee/first respondent has filed two appeals before the Commissioner of Central Excise (Appeals), Salem, drawing reference to W.P.No.3891/2000, whereupon the ACP determined was quashed; challenged by the department before the Tribunal, who dismissed the departmental appeal; now agitated by Revenue herein. Held: Having regard to the effect of the judgment of the Supreme Court in the Shree Bhagwati Steel Rolling Mills case on pending matters, and on the facts and circumstances of this case, and in the light of the subsequent developments, the substantial question of law framed is: "Whether the Tribunal failed to appreciate the law that the omission of Section 3A of the Central Excise Act, 1944 is an Amendment to the Central Excise Act, 1944 and is saved by Section 6A of the General Clauses Act, 1897?" - The Apex Court ruling squarely applies to the case on hand and therefore, the substantial question of law now framed, is answered in the affirmative and the same requires to be adjudicated afresh, by the Tribunal - impugned order is set aside and the matter is remanded to the Tribunal for fresh adjudication, on the substantial

4 question of law now framed by this court [Para 8-10] 2016-TIOL-1791-HC-MAD-CX Servo Packaging Ltd Vs CESTAT (Dated: July 15, 2016) Central Excise - CENVAT Credit - Premises of Unit-1 and Unit-2 of appellant firm was inspected; officers detected shortages of credit availed inputs; and recovered loose slips and a note book containing the details of raw materials dispatched - statements of individuals were recorded (subsequently retracted); and notices were issued, proposing demand for recovery of credit irregularly availed on inputs found short, alleging clandestine clearance of credit availed material - original authority held that the private record (loose slips/note book) alone could not be treated as evidence of clandestine removal, but confirmed demand for recovery of credit on input shortages - Commissioner (Appeals) remanded the case to the original authority to re-consider the demand relating to private record and penalties on individuals - The appellant challenged the OIA before the Tribunal on the ground that the scope of remand ordered was beyond the scope of the appeal inasmuch as the original authority's finding on private record was not agitated by the department - The Tribunalremitted the matter with further directions, culminating in the instant WP TIOL-1790-HC-MUM-CX DDN Sfa Ltd Vs UoI (Dated: July 7, 2016) CX - Settlement Commission passing order u/s 32F(5) of CEA, 1944 negativing the application filed by petitioners - petitioner before High Court contending that principles of natural justice were not followed. Held: It is not disputed that Settlement Commission had conducted enquiry on and, therefter, granted 10 days time to make further submissions - revenue subsequently relied on letters dated , , & which are subsequent to the date of hearing - copies of these letters/documents were never provided to petitioners although they had made specific request for the same u/s 32J of the CEA, apparently the said letters appear to have been read while passing the impugned order without giving copies of the same to petitioners and without bringing it to their knowledge - such an order is certainly not in consonance with the cardinal principles of natural justice considering the fact that petitioners have paid duty as demanded - Order quashed and set aside - Settlement Commission to decide proceedings afresh by giving opportunity to the petitioners to put forth their case and also furnish certified copies of the relevant letters/documents - Petition disposed of: High Court [para 7, 8, 9] 2016-TIOL-1765-HC-P&H-CX CCE Vs Dee Development Engineers Pvt Ltd (Dated: August 9, 2016) CX - Tribunal while allowing appeal with consequential relief held that supplies made to SEZ developers are not hit by the provisions of rule 6 of CCR, 2004 and the benefit of Notfn. 50/2008-CE(NT) dated is to be extended with retrospective effect - Revenue in appeal before High Court.? Held: Identical issue was gone into by three different High Courts in M/s Steel Authority of India Ltd., Bhilai Steel Plant, Bhilai TIOL-384-HC-Chattisgarh -CX, which was followed in M/s Sujana Metal

5 Products Ltd., TIOL-1128-HC-AP-ST and further followed in Fosroc Chemicals (India) Pvt. Ltd TIOL-1609-HC-KAR-CX, and the issue was decided against the revenue and in favour of the assessees -? High Court deems it appropriate to follow the same to maintain consistency as the Central Excise Act is a Central Statute - Revenue appeal dismissed: High Court [para 2, 3] 2016-TIOL-1764-HC-ALL-CX Balrampur Chini Mills Ltd Vs CCE (Dated: July 19, 2016) CX Remission of duty in respect of loss of molasses due to accident. Held: In order to avoid duty payable under Rule 49 of Central Excise Rules, 1944, onus is on assessee to prove that accident occurred due to reasons beyond his control and he could not have avoided it - Tribunal has not committed any error of law in overlooking any statement as alleged since there was no document or statement which show that loss has occurred due to an accident - no reason to hold that assessee are not liable to pay any liability Reference answered against the assessee: High Court [para 3] 2016-TIOL-1762-HC-ALL-CX CC & CE Vs Supreme Industries Ltd (Dated: July 11, 2016) CX - Assessee admitted liability of payment of duty and deposited requisite amount on while show cause notice was issued on Neither any penalty nor interest under Section 11-AC and under Section 11-AB respectively was payable by assessee when assessee has deposited disputed duty voluntarily before issuance of notice matter settled by various decisions of High Courts - Revenue appeal lacks merit and hence dismissed: High Court [para 4, 6] 2016-TIOL-1631-HC-AHM-CX CCE Vs Balkrishna Textiles Mills Pvt Ltd ( Dated: February 17, 2016) Central Excise - Central Excise Rules, Rule 57A(5) - Deemed Credit availment - Bar of limitation - When the statute does not provide for any limitation, no limitation can be read into - Absent limitation prescribed under the Rule 57A(5) or the Notification No.29/96 issued under said Rule, the limitation prescribed under rule 57G(5) held cannot be read into the scheme of rule 57A(5) TIOL-1605-HC-DEL-CX Honda Cars India Ltd Vs UoI (Dated: July 27, 2016) CX - Failure to make the mandatory pre-deposit as envisaged in section 35F of the CEA, Petitioner seeks to bring the present case within the exceptional category warranting the Court's interference under Article 226 of the Constitution. Held: Court is unable to view the present case as an exceptional category where the Court should exercise its jurisdiction under Article 226 of the Constitution to grant relief notwithstanding the amended Section 35F of the CE Act - Petition as well as application dismissed: High Court [para 5, 6] 2016-TIOL-1597-HC-P&H-CX

6 CCE Vs Indian Oil Corporation (Dated: July 21, 2016) CX - Issue involved is regarding valuation of goods as evident from the order of the Tribunal which considered the issue in the light of s.4 of CEA, contention of Revenue that issue is about quantum and volume of goods has no merits - Appeal dismissed: High Court [para 6, 7] 2016-TIOL-1568-HC-DEL-CX SML Isuzu Ltd Vs UoI (Dated: July 22, 2016) CX - It is now well settled that the legislature can enact laws to operate retrospectively and enforce an earlier invalid legislation - Rule 57F(4A) of CER, 1944 which provided for elapsing of credit was a limb of rationalization of CE duty structure and provide flexibility in the use of credit by lapsing the accumulated credit which was admittedly a product of the earlier duty structure - making of Rule 57F(4A) was not irrational or unreasonable so as to fall foul of the Constitution of India Petitions dismissed: High Court [para 22, 24, 27, 31, 32, 34, 36, 37, 40, 41, 42, 43, 44, 46]