HIGH COURT RULING (CENTRAL EXCISE)

Transcription

1 2015-TIOL-1992-HC-MP-CX HIGH COURT RULING (CENTRAL EXCISE) Bhanu Iron And Steel Co Ltd Vs CE (Dated: August 17, 2015) CE - DGM and Excise Officers of the appellant company in their respective statements accepted the shortage of MT of MS Slabs and were satisfied with the manner of stock taking and they further deposed that this difference is due to actual non-receipt of slabs in the factory and that they have received only duty paying documents - CENVAT credit of Rs.3,67,52,507/- denied by adjudicating authority along with imposition of penalty, fine, interest - Tribunal dismissing the appeals of the assessee - appeals filed before High Court on the ground that non-supply of documents by the department is a violation of principle of natural justice and, therefore, matter be remitted to adjudicating authority. Held: From the contents of paragraphs 24 to 29 of the order-in-original, the contention of the appellant appears to be incorrect - In view of the concurrent finding of fact recorded by both the authorities, Court does not find any substance in these appeals and moreover appeals involve no substantial question of law - appeals have no merit and are accordingly, dismissed: High Court [para 9, 10] 2015-TIOL-1949-HC-ALL-CX M/s Bharat Heavy Electricals Ltd Vs CC & CE (Dated: August 21, 2015) CX - Provisional Assessment - Rule 7 of CER, Interest is leviable even where differential duty was paid prior to the finalisation of the assessment - Bombay HC decisions in CEAT & Ispat Industries disagreed: Allahabad HC [para 23] Also see analysis of the order 2015-TIOL-1948-HC-MAD-CX M/s Mettur Thermal Power Station Vs CBEC (Dated: July 15, 2015) Central Excise - Demand of duty on Fly Ash and Fly Ash bricks cleared post Petition challenging the Show Cause Notice on various grounds. Held: Process does not amount to manufacture - To be subjected to levy of excise duty "excisable goods" must be produced or manufactured in India. For being produced and manufactured in India, the raw material should have gone through the process of transformation into a new product by skillful manipulation. Excise duty is an incidence of manufacture and, therefore, it is essential that the product sought to be subjected to excise duty should have gone through the process of manufacture. (Para 9) The Apex Court Union of India versus Ahmedabad Electricity Company Limited" TIOL-17-SC-CX has categorically held the "cinder" which is unburnt part of coal, is not exigible to excise duty since no manufacturing process was involved to produce the same and as such it did not satisfy the test of being manufactured in India as envisaged in the provisions of the Act and that the onus to establish that cinder has gone through the process of manufacture in India was not discharged by the department. -The difference between 'cinder' and 'fly ash' is that when coal is not burnt fully and leaves pieces behind, is called 'cinder' whereas, when it is fully burnt

2 and reduced to ash, is called 'fly ash'. Therefore, The ratio decided in the above said decision would squarely apply in the case of 'fly ash' also since the product 'fly ash' also cannot be said to have gone through any manufacturing process. (Para 13) Notification No 89/95 CE - Waste arising out of exempted goods is exempted under Notification No 89/95 CE - 'Electricity' has been specified in the First Schedule of the Central Excise Tariff under heading , but it is not subjected to a duty of excise since under the 'rate column' the duty of excise is indicated as 'nil'. Merely, rate of duty is mentioned 'nil', it cannot be construed that it is non-excisable good. They were excisable goods. Nil rate of duty is also a rate of duty. Therefore, electricity is excisable good and can be construed as exempted goods - The exemption Notification No.89/95-CE would squarely applicable to the product 'fly ash', which is a waste arise during the course of manufacture of electricity, which is an excisable good chargeable to "nil" rate of duty. (Para 24) Fly Ash Bricks dutiable - Fly ash does not itself get shaped as bricks unless some manufacturing activity is involved. Since the raw material fly ash undergoes a change since an operation performed on it, resulting into fly ash brick, such operation would certainly amount to processing of the commodity and such commodity is recognized as a new and distinct article, i.e. 'fly ash brick'. Therefore, the good 'fly ash brick', having satisfied the test of being manufactured in India and also marketability, is leviable to excise duty. (Para 26) Writ Petition partly allowed by setting the demand in respect of Fly Ash. Also see analysis of the order 2015-TIOL-1946-HC-DEL-CX M/s Vishnu & Co Pvt Ltd Vs Superintendent Central Excise (Dated: August 18, 2015) CX - S.9/9AA of CEA, 1944 Demand of duty set aside by CESTAT - Quashing of FIR sought - since the petitioners have an alternate and efficacious remedy to seek discharge from trial court, High Court not inclined to exercise its inherent jurisdiction under Section 482 of CrPC: HC 2015-TIOL-1945-HC-MAD-CX M/s Aircel Ltd Vs CCE, C & ST (Dated: July 3, 2015) Central Excise - Pre -deposit - CENVAT Credit of duty paid on Tower parts and Shelters and input services used for erection and installation of towers and shelters - Appeal against the order of Tribunal directing the appellant to pre-deposit Rs 12 crores. Held: Following the order of the High Court in appellant's own case, pre -deposit is modified to Rs 10 crores, to be paid in three instalments. Also see analysis of the order 2015-TIOL-1931-HC-MAD-CX M/s Adani Enterprises Ltd Vs UoI (Dated: July 8, 2015) Central Excise - Recovery of erroneous rebate - Ex parte order passed without

3 supplying the relied upon documents - violation of principles of natural justice - Petition challenging the order of Revision Authority upholding the rejection of rebate - Held: The appellate authority while remanding the matter has categorically come to the conclusion that the entire case is on the documents recovered from the job worker of the appellant and the petitioner is right in asking for the documents for perusal before giving any reply and that none of the letters sent by the petitioner were re plied by the respondent nor furnished the documents, which amount to violation of principles of natural justice - It is not appropriate for the respondent, to act beyond the order of the appellate authority - It is not fair and appropriate for the appellate authority to dissect from its own earlier order and come to contrary conclusion, that too at first stage, giving relief to the aggrieved party and at later stage, taking away such relief and if it is allowed, it would certainly lead to travesty of justice as it amounts to violation of principles of natural justice. As already, the appellate authority discussed well settled principles of natural justice, the Court does not delve upon and narrate the decisions of the Apex Court in the matter of violation of principles of natural justice. This was not considered by the revisional authority also and passed impugned order. Therefore, on this ground alone, without going into merits of other aspects, the impugned orders are set aside and the respondents directed to proceed with the matter afresh after affording an opportunity of personal hearing. (para 10) 2015-TIOL-1928-HC-KAR-CX Bhuwalka Steel Industries Ltd Vs UoI (Dated: March 17, 2015) Central Excise - Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 (ACP Rules 1997) - Demands adjudicated and agitated in appellate channel, culminating in a writ petition praying inter alia for declaring Rule 5 of the ACP Rules 1997illegal, ultra virus and unenforceable - Order passed by single bench upheld by Divisional bench and agitated before the Apex Court, which disposed of a bunch of cases by remand to the respective High Courts - The restoration was based on the observation in the Daoba Steel Mills case, that in all those appeals, there is no challenge to the validity of Rule 5 of the 1997 Rules inserted vide Notification dated and, therefore, the Court was required to interpret it and examine the width of its application - The restored WP is disposed of herein. Held: Order passed by the Court on indicates that the issue of constitutional validity of Rule 5 was considered -judgment of the Single Judge came to be affirmed on re -appreciation of contentions by Division Bench viewing that Rule 5 cannot be stated to be violative of Article 14 or ultra vires Section 3A; and thatthe differentia or classification, as alleged, have a rational nexus with the object to be achieved by the law - it has been held by the Division Bench that Rule 5 of the ACP Rules, 1997 is neither violative of Article 14 of the Constitution of India or ultra vires of the provisions contained in Section 3A of the Central Excise Act, 1944 and thereby dismissed the appeals - the co-ordinate Bench as well as Division Bench of the Court has dealt extensively with regard to constitutional validity of Rule 5 of the ACP Rules, question of re examination of the said issue does not arise. [Para 4, 5] 2015-TIOL-1927-HC-KAR-CX Shreematha Precision Components Vs CCE (Dated: April 22, 2015) Central Excise Default in payment of duty - Rule 8(3A) of the Central Excise Rules, 2002 In WP 1438/2015 though the duty liability for the quarter ending March 2011 has been paid on and interest having been paid on , it was held by the authorities that in terms of sub-rule (3A) of Rule 8 of Central Excise Rules, 2002, petitioner has defaulted in payment In WP 13104/2015, the respondent authorities alleged that petitioner has failed to pay the central excise duty on the goods cleared during the said month and same had been paid belatedly thereby, petitioner has committed default by contravening the provisions of Rule 8(3) of the

4 Central Excise Rules, 2002 recovery notices under Sec 11 issued, agitated in the WPs herein. Held: Under Rule 8(3A), in the event of assessee committing default in payment of duty beyond 30 days from the due date as prescribed under sub-rule (1), then notwithstanding anything contained in sub-rule (1) or sub-rule (4) of Rule 3 of CENVAT Credit Rules, 2004, such assessee would be required to pay excise duty for each consignment at the time of removal, without utilizing the CENVAT credit till the date the assessee pays the amount including the interest thereon; otherwise, such clearance would be deemed as one cleared without payment of duty and the consequence of penalties as prescribed under the Rules would follow - A bare reading of Rule 14 would indicate that where the assessee has taken or utilized wrongly or has been erroneously refunded the CENVAT credit, then authorities would be entitled to recover the same from the manufacturer or the provider of the output service and provisions of Sections 11A and 11AB of Central Excise Act or Sections 73 and 75 of the Finance Act would apply mutatis mutandis for effecting such recoveries - Thus, before initiating recovery proceedings, it would be incumbent upon the authorities to issue notice to the petitioners under Section 11A of the Act for having either utilized the CENVAT credit wrongly for bringing such action within the scope of sub-rule (3A) or to construe such transaction as having cleared the goods without payment of duty or in other words, such belated utilization of CENVAT credit for payment of central excise duty to be construed as one in contravention of sub-rule (3A) of Rule 8 - The audialterempartem principle would be squarely applicable in case of such recoveries and particularly, when it is alleged that CENVAT credit has been utilized beyond the prescribed period - impugned notices cannot be sustained as it is contrary to Rule 14 of CENVAT Credit Rules, 2004, and in violation of natural justice recovery notices and demand notices quashed respondent permitted to initiate proceedings under the Act read with Rule 14 of Cenvat Credit Rules, [Para 9, 10] 2015-TIOL-1926-HC-KAR-CX S L Industries Vs CCE & ST (Dated: April 25, 2015) Central Excise - Relied upon documents - Petitioner firm engaged in manufacture of plastic articles - offence case booked and notice issued, proposing duty demand with interest and penalty - notice pending adjudication; WP filed, seeking direction to respondent to furnish copies of documents relied upon in raising the demand proposals, to enable them defend their position prior to adjudication. Held: petitioners have sought for copy of entire order sheet, office notes, copies of summons issued to various constituents of petitioners and documents referred to in the seizure orderand also information contained in CPU of VIP make computer with CD - documents referred to in the show cause notices in question, including seizure mahazarhas been furnished to petitioners in three volumes - the documents which are now sought for by petitioners in their respective representations have not been relied upon in the show cause notices - question of issuing any writ of mandamus to respondent to furnish copies of documents to petitioners, as sought for in the respective representations, does not arise - It is not the case of petitioners that documents which are indicated in the show cause notices have not been furnished to petitioners; or that the same has been relied upon by the respondent - WPs devoid of merit [Para 7, 8, 9]

5 2015-TIOL-1900-HC-AHM-CX CCE Vs Rajesh Malleables Ltd (Dated: August 11, 2015) Central Excise - Rule 8(3A) of the Central Excise Rules, Whether the ratio of Indsur Global can be applied to other cases while the matter has not attained finality - Appeal by revenue against the order of Tribunal on the ground that the Tribunal ought not to have followed the ratio of Indsur Global. Held: There is no force in the argument on behalf of the revenue. It is appositeto note that the judgement of the Division Benchof this Court in case of Indsur isdecided on 26-27/11/2014 i.e. almost around ninemonths ago. So far the department has notpreferred any appeal to challenge the saiddecision of this Court in the ApexCourt, hence in our opinion, the ratio expoundedby this Court in the Indsur still holdsthe field. (Para 6) Since thejudgement of this Court is so far not challengedbefore the Apex Court and therefore,it holds the field, we are of the opinion thatthe CESTAT (West Zonal) Bench, Ahmedabad has notcommitted any error or irregularities inrejecting the appeal of the Revenue by theimpugned order dated 8/1/2015. In our opinion,no substantial questions are involved in this appeal. Hence, dismissed. (Para 7) Also see analysis of the order 2015-TIOL-1873-HC-DEL-CX-LB CCE Vs Brew Force Machine Pvt Ltd (Dated: July 31, 2015) CX/CUS/ST - Tribunal has the power to grant extension of stay beyond 365 days - The "words" even if the delay in disposing of the appeal is not attributable to the assessee are missing and not incorporated in CE Act - Thus, the bar and prohibition created by enactment of the Finance Act, 2008 to the third proviso to Section 254(2A) of Income Tax Act, would not be applicable to appeals preferred under Section 35C (2A) of the CE Act before CEGAT - Division Bench decision in Haldiram India Pvt. Ltd. over ruled: LB Delhi HC [para 8] Also see analysis of the order 2015-TIOL-1860-HC-MAD-CX Shrushthi Plastics Pvt Ltd Vs CCE (Dated : June 25, 2015) Central Excise - Small scale exemption under Notification No 8/99 CE - Simultaneous availment of exemption on some goods and Modvat benefit on other goods - Appeal against the order of Tribunal confirming the demand ex parte. Held: From the copy of the note sheet pertaining to the case before the Tribunal, it is seen that the case was adjourned from time to time awaiting the decision of the Apex Court in the case of Nebulae Health Care. But, the Tribunal, proceeded to dispose of the matter on merits based on other decisions - There is no reference to the decision in the case of Nebulae Health Care. Even otherwise, the Tribunal does not consider the decisions of the Supreme Court, based on which the Original Authority as well as the Commissioner (Appeals) have held in favour of the assessee and there is no discussion on merits on the decision rendered by the lower authorities. - The opportunity as sought for by the appellant should have been granted by the Tribunal to enable them to put forward its case. The plea of prejudice is apparent and the counsel has shown bona fides for his absence - Impugned order is set aside and the matter is remanded to the Tribunal. (para 9)

6 2015-TIOL-1859-HC-MAD-CX VNK Menon & CO Vs CESTAT (Dated : June 18, 2015) Central Excise - Appeal against the order of the Tribunal confirming the demand under extended period - Contention that when the Tribunal held there was no suppression subsequent to August 1996, the same ratio would apply to earlier period also. Held: - It has been held by the Tribunal that there is a clear case of suppression for invocation of extended period of limitation for the period prior to August, 1996, as the activities of the appellant/assessee came to light subsequent to an investigation by the Department - For the period post August, 1996, on the plea of suppression, the Tribunal was correct in setting aside the demand on the ground that the department was aware of the activities of the appellant/assessee and, therefore, post August, 1996, the case of suppression, as held by the adjudicating authority, cannot be sustained - The findings recorded by the Tribunal insofar as the period prior to August, 1996 and post August, 1996 stems from strong judicial reasoning and there is no error on record warranting interference with the well-considered finding of the Tribunal. (para 8) 2015-TIOL-1858-HC-MAD-CX CCE Vs Indian Furniture Products Ltd (Dated : July 3, 2015) Central Excise - Appeal by revenue - Monetary limits - Appeal cannot be entertained in view of the fact that the monetary limit to prefer an appeal is pegged at Rs.2,00,000/- by the litigation policy of the Government issued by the Ministry of Finance, Department of Revenue, Central Board of Excise & Customs vide Instructions dated in F.No.390/Misc./163/2010-JC. ( para 8) The circular issued by the Board is squarely applicable to the facts of the present case and, therefore, the Court is not inclined to entertain the appeal. Without going into the merits of the questions of law raised, in the light of the Board's circular, the appeal is dismissed as not maintainable. (para 10) 2015-TIOL-1829-HC-P&H-CX CCE Vs Nexo Products India (Dated: August 7, 2015 ) Central Excise - Clandestine clearances - Appeal by revenue against order of Tribunal setting aside the demand. Held: Nothing was brought on record, in any manner, to show that to manufacture a large amount of 14,25,900 pieces of nuts and bolts, there was material which had been consumed since neither any relevant record had been shown to show that electricity had been consumed or labour had been utilized to manufacture the said quantity. Neither the fact of purchase of raw material from the vendors or the sale to the consumers was brought on record. In the absence of any corroborative evidence, the levy of such a huge demand was, thus, totally arbitrary and has been rightly set aside. ( para 8) The demand had been illegally created without even meeting the defence of the manufacturer, has, thus, been rightly set aside by the Commissioner (Appeals) and upheld by the Tribunal. The retraction was made at the earliest, the moment the show

7 cause notice was served and in such circumstances, the questions of law which have been raised by the appellant are answered against the appella nt-revenue and the appeal is, accordingly, dismissed. (para 9) 2015-TIOL-1808-HC-AP-CX CCE & C Vs M/s Rasmi Wax Coated Paper & Printing Industry (Dated: July 9, 2015) Central Excise - Manufacture - The respondent received paper in jumbo rolls of width 470 mm to 520 mm and length 12,100 mts, which are cut into strips of width 35mm to 48 mm and length of 2000 mts., to 3000 mts., and returned to M/s VST Industries in smaller rolls, commonly known in trade as bobbins, who in turn use it in the process of manufacture of filtered cigarettes - Revenue alleged suppression of turn over with respect to the manufacturing of printed cork tipping paper falling under Chapter Sub-heading No Demands adjudicated and agitated before the Tribunal, who set aside the demands, now agitated by Revenue herein. Held: The simple controversy involved is whether the cutting of jumbo rolls into smaller sizes and printing on them by a job worker would amount to manufacture as defined under the Central Excise Act in large number of cases the Tribunals across the country had decided the slitting of the jumbo rolls into of duty paid cork tipping paper and printing on them does not amount to manufacture - The Supreme Court in M/s. Headway Lithographic Company Vs. Commissioner of Central Excise, Kolkata heldinter alia that Printing of biri wrappers would not and can never fit under the description transfer decalcomanias inasmuch as in the present case on plain paper simple printing is done on the wrappers which are cut to size for the purpose of wrapping the biris and there is no use of sheet of plastics - the appeal filed by the Revenue against the order of the Tribunal in R.G.L. Convertors Vs. Commissioner of Central Excise, New Delhi came to be dismissed on the ground of delay and there is no further appeal, thereby the Order of the Tribunal had become final;hence the issue is no longer res integra. [Para 4] 2015-TIOL-1803-HC-KERALA-CX Karthikeyan T K Vs CCE & C (Dated: July 30, 2015) Central Excise - Reward to informer - Writ Appeal filed by informer seeking directions to the department for higher amount of reward - Held: The Committee had gone into the claim of the petitioner and minutes produced by the respondent authorities clearly indicates that the entire factual circumstances involved in the matter including the fact that the petitioner was the informer, who has given necessary information regarding the evasion, was taken into consideration and it was found that, as per the guidelines, it is possible for the Department to grant an exgratia payment and Rs. 5,00,000/- was fixed as the ex-gratia amount - No reason to interfere with the findings of the Committee - Writ Appeal is dismissed. (para 7) 2015-TIOL-1801-HC-AP-CX CC & CE Vs M/s Grip Engineers Pvt Ltd (Dated: July 15, 2015) Central Excise - Appeal by revenue against the order of Tribunal holding that extended period cannot be invoked. Held: Extended period would apply only in cases where there is suppression of material facts, collusion or any willful mis -statement, etc. made by the assessee. In

8 the instant case, the finding of the Tribunal is categorical that since respondentcompany filed all the relevant declarations there was no suppression of the facts - No question as such was raised making an issue that findings recorded by the Tribunal are perverse and based on no material - It is well-settled that the Tribunal is the last fact finding authority and the High Court is required to accept the findings recorded by the Tribunal except where there is a specific challenge to the findings raising any questions of perversity supported by rele vant material - No reason to interfere with the order of Tribunal. (para 7) 2015-TIOL-1800-HC-AHM-CX COMMISSIONER Vs Tata Chemicals Ltd (Dated: July 30, 2015) Central Excise - Refund - Interest on delayed refund - Appeal by revenue against the order of Tribunal allowing refund after expiry of three months from the date of filing the refund application - Held: The Tribunal has relied upon a decision of the Apex Court in the case of Ranbaxy Pharmaceuticals Limited v. Union of India, 2011-TIOL- 105-SC-CX by which it has been held that the law to pay the interest commences from the date of expiry of three months from the date of receipt of application and not from the decision - The Tribunal has not committed any error in deciding the issue in favour of the respondents who had applied for the refund of excise duty. Hence, the appeal is meritless and is summarily dismissed. (para 3) 2015-TIOL-1797-HC-AHM-CX Tec Paper Pvt Ltd Vs UoI (Dated: July 30, 2015) Central Excise - Appeal by revenue was heard by the Member (Judicial) who reserved the order seeking certain clarification - The matter was subsequently listed before the Member (Technical) who disposed of the appeal ex parte and allowed the appeal by revenue - Petition challenge the same. Held: When the appeal was already heard and reserved for orders and the Member (Judicial) of the Tribunal had directed the registry for re -listing the matter for the certain clarification, the registry ought to have re -listed the matter before the Member (Judicial) of the Tribunal and not before the Member (Technical) of the Tribunal. The Member (Technical) of the Tribunal ought not to have proceeded with the matter in absence of the petitioner and ought not to have decided the same, which is contrary to the decisions of the Apex Court.(para 15) The order impugned in the petition is required to be quashed and set aside. The matter is required to be remanded to the Tribunal for a fresh hearing and accordingly is remanded. It is clarified that the matter shall be heard and decided only by one person either by the Member (Judicial) of the Tribunal or by Member (Technical) of the Tribunal in accordance withlaw. (para 16 & 17) Also see analysis of the order 2015-TIOL-1794-HC-MAD-CX Sterling Lab Vs CCE (Dated : June 25, 2015 ) Central Excise - Pre deposit - Appellant is engaged in the manufacture of excisable goods - During the period between April 2007 and October 2007 and again during the

9 period between January 2008 and March 2008, they defaulted in payment of excise duty payable net of CENVAT credit available to them for each of the months - Appellant continued to be in default but did not comply with the provisions of Rule 8 (3A) of the Central Excise Rules, A show cause notice was issued demanding excise duty equal to the excise duty paid using CENVAT Credit during the default period along with interest and penalties; confirmed in adjudication and agitated before the Tribunal, who ordered pre deposit of the interest and Rs.5,000 toward penalty; now agitated by the appellant herein. Held: Gujarat High Court in the case of Indsur Global Ltd. vs. Union of India, held as unconstitutional the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the CENVAT credit till an assessee pays the outs tanding amount including interest - following the said decision of the Gujarat High Court, this Court has also allowed the writ petitions filed to declare Rule 8 (3A) of Central Excise Rules, 2002 as oppressive, unreasonable and ultra vires Articles 14 and 19 of the Constitution of India - prima facie, the appellant / assessee has made out a case for waiver of pre -deposit - questions of law raised are not required to be answered at this stage - The Tribunal will have to decide the issue on the basis of the decided cases; impugned order on pre deposit is set aside and the matter is remanded back to the Tribunal for considering the appeal on merits. [Para 6, 7, 8] 2015-TIOL-1793-HC-AP-CX CC & CE Vs Andhra Pradesh Paper Mills Ltd (Dated : July 08, 2015 ) Central Excise - Limitation - Misdeclaration in raw material account alleged in SCN on the ground that jute waste is not gunny bag waste and as the party has mentioned in their record jute waste and not gunny bag waste, there has been suppression of information with malafide intent, attracting penalties under Sec 11AC of the Central Excise Act 1944 and Rules 226 and 173Q of the (erstwhile) CE Rules, Extended period held unsustainable in adjudication and penalties dropped; agitated by Revenue before Tribunal who upheld the original order, now further agitated by Revenue herein. Held: Original authority recorded finding that allegations of suppression and application of extended period unsustainable - No material placed before the Tribunal to controvert this finding - On considering the fact that when there was a scope for doubt whether the goods were dutiable or not, Tribunal refused to apply extended period of limitation, relying upon a catena of rulings - Both the primary authority as well as the appellate Tribunal has found, as a matter of fact, that there was a genuine doubt with respect to dutiability; and both the authorities did not find it appropria te to apply extended period of limitation to the facts of the case - no reason to interfere as it is purely a finding of fact recorded by the authorities on appreciation of the material on record. [Para 3, 4, 5] 2015-TIOL-1767-HC-MAD-CX CCE Vs Devi Silicates Pvt Ltd (Dated: June 26, 2015) Central Excise - Whether the failure to challenge the finding in favour of a n individual in a connected matter would operate on the principle of res judicata on the Tribunal from examining the other cases on merits? - Department filed appeal against the order of Commissioner dropping the charge of clubbing of clearances of 21 units, but no appeal was filed in respect of Shri M.S. Jain - Tribunal dismissed the appeals on the ground that the department had not challenged the order passed in respect of Shri M.S. Jain - Order of Tribunal challenged by revenue.

10 Held : It is of no consequence that merely because M.S. Jain, one of the person who suffered the penalty order, did not file any appeal, it does not change the colour of the stand of the department in the show cause notice. It is the specific case of the department that the clearances of all these units and the proprietory concerns should be clubbed together for the purpose of denying the benefit of notification. However, the Department can always sustain its allegations, de hors the statement of M.S.Jain, if there are other materials to support its case. Merely because the case of M.S. Jain has not been appealed against, it does not, and would not, dilute the case of the Department. (para 5) The Tribunal was clearly in error in holding that merely because no appeal has been filed against M.S. Jain, all the other appeals cannot be maintained. Issue is answered in favour of the revenue and against the assessee. The matter is remanded to the Tribunal for considering the issue on merits. (para 6) Also see analysis of the order 2015-TIOL-1761-HC-MUM-CX SSF Plastics India Pvt Ltd Vs UoI (Dated: July 27, 2015) Settlement Commission, Customs & Excise cannot take short cuts - If such an approach is adopted, the very purpose of setting up a Commission and enabling settlement of disputes expeditiously and promptly is defeated: High Court [para 9 to 11] Also see analysis of the order 2015-TIOL-1744-HC-MAD-CX CCE Vs Pepsico India Holdings Pvt Ltd (Dated: June 12, 2015) Central Excise - Manufacture of dutiable and exempted goods - Demand of 8% amount on value of exempted goods in terms of Rule 57CC of the Central Excise Rules, Revenue in appeal against the order of Tribunal setting aside the demand on reversal of credit on common inputs. Held: For claiming the benefit under Section 57CC (9) of the Act, the manufacturer has to maintain separate books of accounts, sub-section (2) to Section 73 of the Finance Act, 2010 mandates that the assessee has to make an applica tion to the Commissioner of Central Excise along with documentary evidence and a Certificate from the Chartered Accountant or a Cost Accountant, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of exempted goods within a period of six months from the date on which the Finance Bill, 2010 received the assent of the President - In the present case, it is clear that the input credit has been reversed by the respondent/assessee even prior to the amendment - The Tribunal, following the decision of the Allahabad High Court in Hello Mineral Water case which followed the decision of the Apex Court in Chandrapur Magnet Wires case rightly set aside the demand. ( para 13) Question of law answered in favour of the assessee and against the revenue TIOL-1734-HC-MAD-CX

11 M/s Thiru Arooran Sugars Vs CESTAT (Dated: July 3, 2015) Central Excise - CENVAT Credit on M.S.Plates, M.S.Angles, M.S.Channels and H.R. Plates, which were purchased and utilized in the construction/erection of plant - Whether the order of the Tribunal giving effect to the notification No.16/09 CE(NT) prior to overlooking the fact that the same is made expressly effective only from the aforesaid date is correct? Held: The High Court has earlier considered the issue in C.M.A.No.1301 of 2005 dated and dismissed the appeal filed by revenue - There is no change in the circumstance and this Court had already held that the decision Saraswati Sugar Mills reported in TIOL-73-SC-CX is distinguishable on facts - Following the principles laid down in Rajasthan Spinning & Weaving Mills Ltd TIOL-51-SC-CX and the earlier decision of this Court, impugned order of the Tribunal denying the credit is set aside and the appeal is allowed. (para 8&9) Also see analysis of the order 2015-TIOL-1712-HC-UKHAND-CX CC & CE Vs M/s Janardan Plywood Industries Ltd (Dated: May 14, 2015) CX - A manufacturer could not have availed the benefit of exemption under Para (1) of the Notification No. 01/93-CE dated , since it had opted to full rate of duty in a financial year in relation to its other unit - Revenue appeal succeeds: High Court [para 16 to 20] 2015-TIOL-1693-HC-MAD-CX CCE & ST Vs M M Forgings Ltd (Dated: June 26, 2015) Central Excise - CENVAT Credit on outdoor catering service - Whether eligible under Rule 2(l) of the CENVAT Credit Rules, Revenue in appeal against the order of Tribunal allowing the credit - Held: In an identical circumstance, the High Court held in favour of the assessee by following the decision of the Bombay High Court in the case of CCE V. Ultratech Cement Ltd TIOL-745-HC-MUM-ST, wherein all the contentions raised by the respective parties have been considered in extenso including the definition of 'input service' as defined in the case of Maruti Suzuki Ltd. V. CCE 2009-TIOL-94-SC-CX. The Bombay High Court came to the conclusion that the decision of the Larger Bench of the CESTAT in the case of CCE V. GTC Industries Ltd TIOL-1634-CESTAT-MUM-LB is a correct law, with a rider that where the cost of the food is borne by the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer.( para 6) 2015-TIOL-1682-HC-KAR-CX Madras Cements Ltd Vs ADDL CCE (Dated: July 2, 2015) Central Excise - CENVAT credit on outward transportation - Appeal against the order of Tribunal disallowing credit for the period from in view of the

12 amendment made to Rule 2(l) of the CENVAT Credit Rules, Held: As long as the sale of the goods is finalized at the destination, which is at the door step of the buyer, the change in definition of 'input service' which came into effect from would not make any difference. A perusal of invoices makes it clear that the goods were to be delivered and sale completed at the address of the buyer and no additional charge was levied by the assessee for such delivery. From these facts it is clear that the sale was completed only when the goods were received by the buyer. (para 8) As per the Circular dated , the place of removal has to be ascertained in terms of Central Excise Act, 1944 read with the provisions of the Sale of Goods Act, 1930 which has been dealt with in detail in the said Circular. According to the provisions of the Sale of Goods Act, 1930, the intention of the parties as to the time when the property in goods has to pass to the buyer is of material consideration. The record clearly shows that the intention of the parties was that the sale would be complete only after goods are delivered by the seller at the address of the buyer. (para 9) It is clear from the invoices that title of the goods had passed on from seller to buyer only at the place of destination, which is the address of the buyer. As such, the buyer had no right over the goods till delivered to it. The Tribunal has not considered this aspect and has only relied on the amendment made to the definition of "input service" with effect from and rejected the claim of the appellant-assesee after that date. No further reason has been given by the Tribunal nor any finding has been recorded with regard to place of completion of sale of the goods. ( para 11) Question of law answered in favour of the assessee and against the revenue (para 13) Also see ananlysis of the order 2015-TIOL-1657-HC-MUM-CX Dharampal Lalchand Chug Vs CCE (Dated: July 10, 2015) CX - That the fraud is of great magnitude and that involvement or the act is admitted does not mean that recovery of duty because of such fraud or as a result of it can be made at any time under section 11A - SCN issued on for recovery of duty for the period April 2002 to January 2003 is time barred - If there is any condition to furnish a Bond and in that behalf it is prescribed that in the event the terms and conditions on which the bond has been given and accepted are breached and violated, a demand can be raised, then that stipulation will not mean that the mandate of section 11A is any way diluted or can be interpreted with the aid of such term or condition of the Bond - Tribunal s order is ex-facie erroneous and unsustainable in law - Order is vitiated by complete non-application of mind as well - Appeals allowed: High Court [para 20, 24] Also see analysis of the order 2015-TIOL-1656-HC-ALL-CX

13 Rotomac Global Pvt Ltd Vs CCE (Dated: July 8, 2015) Central Excise - Condonation of delay of two days - A liberal approach should have been adopted by the Tribunal as well as by the Commissioner (Appeals) - The delay of two days was not fatal and a liberal approach should have been adopted in handling the matter - The order of the first appellate authority as well as the order of the Tribunal cannot be sustained and are quashed - The appeal is allowed and the matter is remanded to the Commissioner (Appeals) to decide the appeal on merits after hearing all the parties concerned (para 9) 2015-TIOL-1636-HC-MUM-CX Top Security Ltd Vs CCE & ST (Dated: July 13, 2015) Whether it is open to the Tribunal to dismiss an appeal preferred by the assessees without adjudication on merits, where the Tribunal's order granting conditional stay has been complied with by the assessee - NO: HC 2015-TIOL-1635-HC-P&H-CX CCE Vs Elegant Enterprises (Dated: July 15, 2015) CX - Non compliance with provisions of Section 35B(2) of CEA, As per Rohit Pulp and Paper Mills 2002-TIOL-666-SC-CX, provisions of Section 35B (2) are clearly required as a prerequisite to direction to any Central Excise Officer to file an appeal - Documents tendered across the Bar during hearing of these appeals also do not indicate compliance of provisions of Section 35B(2) of the Act - Appeals dismissed: HC 2015-TIOL-1608-HC-DEL-CX CCE Vs Brew Force Machine Pvt Ltd (Dated: July 10, 2015) CX/CUS/ST - Extension of Stay beyond 365 days - Decision of Division Bench dt in Pepsi Foods that, even in terms of third proviso to s.35c(2a) of CEA, 1944, the CESTAT is not be denuded of the power to extend the stay beyond 365 days in deserving cases is contrary to the judgment of the coordinate Division Bench in Haldiram India Pvt. Ltd. holding that Tribunal is bound by the provision and that the power to extend such interim orders is dependent on the exercise of discretion by the High Court under Article 226 of the Constitution - Court constrained to refer to a larger Bench the question of correctness of the decision dated in Haldiram India Pvt. Ltd.: High Court Also see analysis of the order

14 2015-TIOL-1594-HC-ALL-CX CCE Vs M/s Annakut Biscuits Co Ltd (Dated: April 2, 2015) CX - Appeal against order of Tribunal granting waiver of pre-deposit of assessed demand in favour of assessee during pendency of appeal or for unlimited period - Tribunal has noted that a waiver of pre-deposit and unconditional stay on realisation of adjudicated liability was granted by Tribunal since a prima facie case was found in favour of assessee - Tribunal has also observed that the appeal has not been disposed of only on account of pendency of several older appeals and not on account of any delay on the part of assessee - Ends of justice would be met if Tribunal is requested to dispose of appeal expeditiously and preferably within a period of six months - Waiver of pre-deposit will continue to remain valid for a period of six months: HC 2015-TIOL-1593-HC-MUM-CX Ms Arjandas Metal Industries Pvt Ltd Vs CCE (Dated: May 8, 2015) CX - Assessee by appeal filed under Section 35G of CEA, 1994 has questioned correctness of order passed by CESTAT, thereby directing the assessee to make a pre - deposit of 50% of duty demand - As alleged Octrai firm through which assessee cleared goods by paying Octrai duty while entering into limits of Mumbai, during investigation, is found to be not in existence itself and/or a bogus entity, therefore no prejudice has been caused to appellant because of denial of cross-examination by Commissioner before passing an order-in-original - Tribunal has held that assessee has failed to bring on record any evidence in support of his contention that he is facing financial hardship as his factory is under closure - In absence of any prima facie case, interest of Revenue needs to be protected and therefore directed the assessee to make a pre-deposit of 50% of duty demand - No error in findings recorded by Tribunal in impugned order - Appeal dismissed: HC 2015-TIOL-1583-HC-MAD-CX CCE Vs M/s Hyderabad Industries Ltd (Dated: June 18, 2015) Central Excise - CENVAT Credit - Credit on Rent-a-cab service - Revenue in appeal against the order of Tribunal allowing the credit. Held: Issue is covered by the precedent decisions of High Courts - Credit is admissible - No interference is called for with the order of Tribunal (Para 8 & 9) TIOL-1582-HC-AP-CX CC & CE Vs M/s Voltarc India Pvt Ltd (Dated: June 24, 2015)

15 Central Excise - Brand name - Small scale exemption under Notification No 1/93 CE denied - Revenue in appeal against the order of the Tribunal setting aside the demand. Held: The Tribunal did not find that there was any justification in applying the extended period of limitation, and thus, the appeal came to be allowed accepting the plea of the respondent that the Order-in-Original is barred by limitation - The Tribunal also found that Voltarc symbol which was being used on the wrapper and packer was reflecting only the name of the company and not the trade mark of the product - No error in the order of Tribunal - Revenue appeal dismissed TIOL-1579-HC-MAD-CX CCE Vs Tenneco Rc India Pvt Ltd ( Dated: June 19, 2015) Central Excise - Valuation of goods cleared to sister unit - Revenue's appeal against the order of Tribunal limiting the demand to normal period on the ground of revenue neutrality. In view of the statement made by both sides that the ratio laid down by the Supreme Court in Nirlon Ltd. is applicable to the case on hand, the substantial question of law is answered in favour of the assessee/respondent and against the Revenue/appellant. (para 5) 2015-TIOL-1562-HC-MAD-CX CCE Vs Advance Detergent s Ltd (Dated: June 18, 2015) Central Excise - Reversal of MODVAT/CENVAT Credit under Rule 57C of Central Excise Rules, 1944 on inputs used in manufacture of spent sulphuric acid cleared under exemption - Revenue in appeal against the order of Tribunal in favour of the assessee. Held: The issue whether the Spent Sulphuric Acid is a by-product or not has been put to rest by the Allahabad High Court in the case of Varuna Sulphonators Pvt. Ltd. V. Union of India (1993 (68) ELT 42 (All) and also by the Supreme Court in the case of Union of India v. Hindustan Zinc Ltd TIOL-55-SC-CX. (Para 11) Invocation of Rule 57C by the Department is not justified and the Commissioner (Appeals) and the Tribunal were correct in holding in favour of the assessee (Para 13) The very language of Rule 57D makes it clear that credit of duty shall not be denied or varied on the ground that part of the inputs contained in any waste, refuse or byproduct arising during the manufacture of the final product, or that the inputs have become waste during the course of manufacture of the final product. It also states that it is of no consequence whether the by-product such as waste, refuse or byproduct is exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty or is specified as a final product. (Para 14) Question of law answered in favour of the assessee.

16 Also see analysis of the order 2015-TIOL-1556-HC-AHM-CX-LB Panoli Intermediate (India) Pvt Ltd Vs UoI (Dated: March 13, 2015) Central Excise - Section 35 - Appeal before the Commissioner (Appeals) - Whether the High Court has jurisdiction under Article 226 if the appeal filed beyond the condonable period of 30 days is dismissed by the Commissioner (Appeals) - Whether Section 35 of the Central Excise Act can whittle down or dilute or nullify the power of the constitutional court under Article 226 of the Constitution. Held: Limita tion provided under section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days. The petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal except under the following circumstances (para 31): 1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or 2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or 3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified. Also see analysis of the order 2015-TIOL-1555-HC-AHM-CX Garden Silk Mills Ltd (Pfy Division) Vs UoI (Dated: June 30, 2015) CENVAT Credit - Commissioner by its Order dated , disallowed certain Cenvat Credits claimed by petitioner company - Said decision was challenged by petitioner before Tribunal - Matter was heard on , however, same was decided on wherein Tribunal remanded the matter on the basis of it's own decision dated with regard to other group of appeals - Petitioners had no opportunity to plead their case before Tribunal whether his case is covered as per Tribunal's decision dated or not - Held: Appellate Tribunal ought to have given an opportunity of hearing to petitioner before deciding matter when Tribunal has relied on its subsequent decision - Matter remanded: HC 2015-TIOL-1554-HC-MAD-CX CCE Vs M/s Tablets India Ltd (Dated: June 19, 2015) Central Excise - Provisional Assessment - Appeal by revenue against the order of Tribunal setting aside demand on the ground that the higher differential duty could be demanded only on the basis of a corrigendum to the Show Cause Notice, but not by way of an application under Section 35E(4). Held: The Tribunal, after taking note of the fact that the Jurisdictional Commissioner finalised the assessment under sub-rule (5) to Rule 9B of the Central Excise Rules and dropped the proceedings, held that the appeal filed under Section 35E(4) claiming higher differential duty of Rs.37,65,075/- was not justified and such a demand could

17 be only on the basis of corrigendum to the show cause notice and not by way of an application under Section 35E(4) of the Central Excise Act. (para 9) In the present case the revised demand for higher duty is merely based on a presumption that one or other factor has not been considered by the Original Authority. When the show cause notice itself clearly demanded a sum of Rs.13,16,071.25, which was based on the records already available, there is no justification how such a demand should be amended without issuing a corrigendum, as rightly pointed out by the Tribunal - Revenue appeal dismissed. (para 14) 2015-TIOL-1546-HC-MUM-CX M/s Super Label MFG Co Vs UoI(Dated: June 29, 2015) CX - Tribunal has no power to dismiss the petitioner's appeal without adjudication on merits - While condoning the delay and restoring the appeal, the Tribunal could have imposed some reasonable conditions but even that has not been done Costs imposed of Rs.15,000/- on petitioner as they have not taken care to appear before the Tribunal on two occasions & even restoration application was filed after nearly three years Petition allowed: High Court [para 5, 6, 7] Also see analysis of the order 2015-TIOL-1539-HC-MAD-CX CCE Vs Dalmia Cements (bharat) Ltd (Dated: June 4, 2015) Central Excise - CENVAT Credit - Credit availed on Capital goods, inputs and input services used for setting up of power plant by the assessee, given on lease to another company - Whether credit has to be reversed in terms of Rule 3(5) of the CENVAT Credit Rules, Revenue in appeal against the order of Tribunal allowing credit. Held: On facts, the Tribunal went in detail into the lease deed, the terms and conditions of the lease and the various clauses to come to the conclusion that there was no removal of goods as such from the premises of the assessee and, therefore, held that the order of the adjudicating Commissioner is bad. The reasoning of the Tribunal, is a well considered reasoning and there is no reason to differ with the view of the Tribunal - The decisions relied on by the Tribunal in arriving at the above decision is also well founded and, therefore, there is no reason to interfere with the same. (para 14) In this case, there is no removal of goods under cover of invoice as provided under Rule 9 of the Cenvat Credit Rules, 2004 and there is nothing in Rule 3 (5) of the Cenvat Credit Rules, 2004 to invoke the deeming fiction as insisted by the adjudicating authority. The language of Rule 3 (5) is plain and simple. When the inputs or capital goods on which cenvat credit has been taken are removed as such from the factory, then subject to compliance of other requirements, the credit availed in respect of inputs on capital goods shall be paid. This situation has not arisen in the present case, as no invoice has been issued for removal of the goods from the factory premises and, therefore, the said rule is not applicable to the case of the assessee. (para 17) Also see analysis of the order 2015-TIOL-1528-HC-AP-CX