high court ruling · earlier case, app mills ltd., (2011-tiol-1378-cestat-bang) , the same member...

HIGH COURT RULING

2012-TIOL-1050-HC-AP-CX

M/s Truwood Pvt Ltd Vs CCE & C (Dated : December 6, 2012)

Central Excise : Order Passed by Commissioner while the application was pending before Settlement Commission is non est : The Tribunal is bound to proceed on the footing that the order dated 30-07-2004 of the Commissioner is non est in law and therefore it ought to have held in the impugned orders that the Revenue could not have challenged the order dated 30-07-2004 of the Commissioner in the appeals E/888/2005 and E/890/2005 before it. It should have therefore rejected the said appeals filed by the Revenue as not maintainable.: para 26

Orders of Settlement Commission : Settlement Commission was entitled to pass final orders not only in relation to matters covered by the application for settlement but also any other matter relating to the "case" not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub section (1) or sub section (6). The matter relating to the lack of jurisdiction of the Settlement Commission was specifically raised by the Commissioner of Central Excise in his report dated 13-09-2004 submitted to the Settlement Commission under clause (1) of Section 32F and the said issue has been decided by the Settlement Commission in its order of admission dated 31-05- 2005. Therefore its finding that the order of the Commissioner of Central Excise dated 30-07-2004 is non est in law is a finding given by it in exercise of jurisdiction conferred on it under Section 32F (7). Therefore, it cannot be said that the said finding given by the Settlement Commission is without jurisdiction. Therefore, the said order of the Settlement Commission cannot be denuded of its efficacy by any collateral attack or in incidental proceedings.:Para 25

Also see analysis of the Order

2012-TIOL-999-HC-AHM-CX

CCE & CC Vs Nirmala Dyechem (Dated : February 15, 2012)

Central Excise – Classification - Ala Fabric Bleach – Respondent classified "Ala Fabric Bleach" under the Heading 2828.90 and Revenue sought to be classify it under the Heading 3402.90 – The respondents conceded before the Tribunal about classification - The question that arises for determination in the Appeal is whether the Tribunal below was justified in rejecting the claim of the interest and penalty – Held that : In the SCN, no allegation of any fraud, collusion, wilful mis-statement, or suppression of fact or contravention with intent to evade payment of duty has been made - In the absence of such allegation, there was no scope of invoking the provisions of interest within the meaning of Section 11AB – The selfsame reason, penalty also cannot be imposed under Section 11 AC (Para 9 & 10).


2012-TIOL-988-HC-DEL-CX

Ashutosh Metal Industries Vs CCE (Dated : October 1, 2012)

Central Excise - Section 3A - Rejection of Rectification Application regarding quantum of pre-deposit by Tribunal - Question of Law - The fact that the order-in-original itself records that the production capacity is 75 MTs is ignored by the authorities. The duty liability would be around Rs. 75 lakhs. Ordering pre-deposit of Rs. 6 Crores appears to be a rough and ready rule. The Tribunal's order does not reflect any discussion on the relative hardship which would be visited upon the assessee in the light the latter is constrained to make the deposit. pre-deposit reduced to Rs. 1.5 Crores and

submission of bond for the balance amount to the satisfaction of the excise authorities is ordered. (Para 7, 8 & 9)


M/s NCL Industries Ltd Vs CC & CE (Dated : July 17, 2012)

CE - CENVAT Credit on Structural Steel used in construction - CESTAT ordered pre-deposit relying on Vandana Global - 2010-TIOL-624-CESTAT-DEL-LB , while in an earlier case, APP Mills Ltd., (2011-TIOL-1378-CESTAT-BANG) , the same Member had held that Vandana Global is no good law in view of the subsequent decision of theSupreme Court in Rajasthan Spinning Mills - 2010-TIOL-51-SC-CX case. CESTAT ordered pre-deposit of Rs. 2.5 Crores. High Court directs pre deposit of Rs 50 Lakhs.

2012-TIOL-970-HC-CHATTISGARH-CX

CC & CC Vs M/s Advani Oerlikon Ltd (Dated : November 19, 2012)

CE - Hot Melt unit is used for packing the finished goods and being in the nature of incidental or/and ancillary to the main manufacturing activity, the assessee was rightly held entitled to claim MODVAT credit - whenever, any issue is decided by the Supreme Court or/and High Court then it has to be first referred to by the Authorities/Tribunals and then decision should be rendered - Reference application filed by Revenue dismissed: High Court [paras 13 & 14]



CCE Vs Diwan Saheb Fashions Pvt Ltd & Ors (Dated : October 15, 2012)

Central Excise – garments stitched from fabric given by customers – No duty payable: respondents are engaged in the manufacture of readymade garments falling under the "Chapter Heading 6201" of the First Schedule of the Central Excise Tariff Act, 1985. The respondents are also engaged in stitching garments out of fabric bought by customers from their shop or brought by the customers from outside. In connection to the latter activity, it is a matter of record that in all such instances, the fabric is given by the individual customer. On the garments so stitched by the respondents, it affixes the label "Specially Tailored By Diwan Saheb Designs for Men”. In cases where the fabric is bought from the respondents only, the stitching takes places after the "sale" of the fabric. Moreover, it is not compulsory for the customer to get the fabric stitched from the respondents.

Thus, the dispute pertains to whether the tailoring activity of the respondents, in cases where the fabric is given by the customer, either after being bought from the respondents, or from outside, is liable to excise duty.

As per Rule 7AA, and its successor Rules, Rule 4(1) and 4(3) of Central Excise Rules, 2001 and 2002, liability to pay excise duty is that of those who supply the raw materials. Therefore, the excise duty, if any, was payable by the individual customers, and not by the respondents. As per Notification No. 7/2003-C.E. dated 1.3.2003 garments got stitched from one's own fabric and based on measurements was exempted from excise duty.


2012-TIOL-941-HC-MUM-CX

CCE Vs M/s Multi Flex Lami Print Ltd (Dated : November 5, 2012)

CE - No reasons provided by Tribunal as to the facts and circumstances which had led the Tribunal to reduce redemption fine from Rs.2 lakhs to Rs.50,000/- only - One is left to guess what possible facts and circumstances justified the reduction - Tribunal is expected to give reasons in support of its order and merely stating (keeping in view the facts and circumstances of the case) and reducing the redemption fine would not satisfy the requirements of a speaking order – Tribunal ignoring statements merely on the ground that in the absence of corroboration by any independent evidence same cannot be accepted - There is no analysis of why the orders of the lower authorities is bad in law - Similarly the penalty imposed have been set aside without any reasons -Tribunal is required to reconsider the issue - order of the Tribunal set aside and matter restored to the file of the Tribunal for fresh consideration – Revenue Appeal disposed of: Bombay High Court. [paras 7, 8 & 10]


Lok Nath Prasad Gupta Vs UOI (Dated : April 13, 2012)

Central Excise - Writ Petition - Clandestine removal of branded Chewing Tobacco -Petitioner accepted the duty liability demonstrated by Settlement Commission but contested the quantum of penalty and rate of interest applied, on the grounds of discrimination - Held that : When clandestine removal was established, duty evasion has to be necessarily estimated in the absence of any direct evidence or material to show the exact quantum of duty-evasion - Suffice to note that these calculations show application of mind to the claims put forth by the petitioner - There is no flaw in the decision-making process in arriving at the excise duty liability of the petitioner - The proposition to levy a token penalty rejected as the Settlement Commission has exercised its discretion properly on palpably and ably demonstrated the duty evaded -Though different interest rates available for the relevant period there are number judgments available where in Settlement Commission have granted full immunity from payment of interest or as restricted the rate of interest to 10% for the entire period - There is no ground made out to discriminate the petitioner - Immunity is allowed with regard to the balance of interest over and above 10% (Paras 20 & 22).


CCE Vs Joint Secretary (Revisionary Authority) (Dated : May 2, 2012)

Central Excise - Rebate - Rebate of CVD paid on the inputs utilized for manufacture of stainless steel utensils - Revisionary Authority allowed the rebate - Revenue Filed Writ Petition on the ground that during the relevant period CVD is not a specified duty in terms of Notification No.21/2004-C.E (N.T) dated 06.09.2004 and as such refund/rebate of CVD paid on inputs are not eligible - Held that : The contention of the petitioner, if accepted, would result in an anomalous situation - In case the assessee had followed procedure prescribed under Rule 6(6)(v) in terms of notification No.41 and 42/2001, they would have been entitled to refund of the excise duty paid on the raw material in form of CVD, but they would be denied the benefit under notification No. 21/2004, which has been issued under Rule 18 of the Rules - The aforesaid distinction does not merit acceptance - A harmonious and cumulative reading of the provisions would show that there was no good cause or reason why CVD paid should not be or was not intended to be included in the term "duty" in the notification No. 21/2004 - Excise duty payable under the Act was included in the term duty - CVD which is imposed is equal to the excise duty and partakes the character of excise duty - The amendment notification No.12/2007 was issued with the intention to

bring all debates and disputes to an end - It ensures that it fully applies to all cases and there is no discrimination - Even without the aforesaid notification there is a valid, plausible and a good case to include and treat CVD as a duty covered by the Notification no. 21/2004 - The detailed reasoning and logic in the findings given by the Joint Secretary, the Revisionary Authority are appreciated and the reasoning merits acceptance (Para 21, 29).

Interpretation of Notifications - The person who claims exemption or concession has to establish that he is entitled to the concession or exemption - Once the assessee satisfies the eligibility clause/criteria, exemption therein to be construed liberally if the contextual construction does not deserve the strict meaning - Meaning of the exemption notification has to be gathered from the language employed without ignoring the reason and cause why the Government has issued the said notification and purpose behind the said notification - The purpose should not be defeated so as to deny and deprive what is clearly flowing from it - But no violence should be done to the language employed and it should be borne in mind that absurd results and constructions should be avoided (Para 28).


CCE Vs Inductotherm (I) Pvt Ltd (Dated : June 28, 2012)

The case of the Department is that the respondent-assessee cleared certain goods without undertaking any manufacturing activity. Such clearance was made at an inflated price. Certain charge was collected from the purchaser on the basic price in the guise of excise duty. The respondent though surrendered the entire amount so collected to the Department in the form of debiting the credit in the CENVAT account, according to the Department this was in breach of Rule 3(4) of the CCR , 2002 and thereafter Rule 3(5) of the CCR , 2004. Since there was no manufacturing activity, no question of collection of excise duty would arise and therefore, the entire amount so collected had to be deposited in terms of Section 11D of the Central Excise Act.

2012-TIOL-925-HC-KOL-CX

Magma Fincorp Ltd Vs UoI (Dated : June 14, 2012)

Writ Petition - Entertaining of Writ Petition - Tribunal remitted the issue to original authority on the sole ground that the Department had questioned the legality and the propriety of the impugned order - Held that : The existence of an alternative remedy is not an absolute bar to entertaining a writ petition - It is true that the Courts usually refrain from entertaining a writ petition where there is an equally efficacious alternative remedy - There are well known exceptions to the rule of alternative remedy - one of them being violation of the principles of natural justice and the other being perversity - The order impugned smacks of perversity and is violative of principles of natural justice, in that the entire decision is on the ground of the department having questioned the order - It is unfortunate that the learned Tribunal should have converted itself to a departmental Tribunal giving total go by to the principles of fair play in action - The impugned order is set aside and quashed.



MGM Matallisers Ltd Vs UoI (Dated : September 24, 2012)

Search warrant issued in name of company which had stopped manufacturing activities but had not cancelled registration and had given the factory on lease to another company - merely because the other company carried on its manufacturing activities from the same premises, the same would not be a ground to hold that entire

search itself was invalid or without authorisation - If during such search any documents, materials, or other incriminating or innocuous materials were found from such premises, nothing prevented the Excise authorities from taking note of the same - in absence of any foundation for pressing the ground of personal mala fide, it is not possible to uphold any of the contentions in this regard - Petitions dismissed: Gujarat High Court [ paras 10, 11, 12 & 13 ]


2012-TIOL-856-HC-MAD-CX

Inox Air Products Ltd Vs CCE (Dated : August 23, 2012)

Central Excise – Writ filed by the Petitioner praying that the Court may be pleased to issue a writ of Mandamus to direct the respondent to issue certain clarifications on the petitioner's representations by the Commissioner, in terms of Rule 31 of the Central Excise Rules, 2002 – Held - The relief prayed for by the petitioner cannot be granted, as the petitioner has not been in a position to show that the petitioner has a right to demand the issuance of the clarifications, as prayed for by the petitioner, in its representations, and that there is a concomitant obligation on the part of the respondent to issue such clarifications (Para 7).


2012-TIOL-855-HC-UKHAND-CX

CC & CE Vs M/s Kichha Sugar Co Ltd (Dated :June 14, 2012)

Central Excise - CENVAT - Welding Electrodes - Ineligible credit - Penalty - The assessee is not entitled to modvat credit on Welding Electrodes. Although the matter was under dispute, it is obligatory on the part of the Tribunal to impose at least the minimum penalty of Rs. 10,000/-, as prescribed in Sub-Rule (1) of Rule 13 of Cenvat Credit Rules, 2001. (Para 3)

2012-TIOL-854-HC-HP-CX

Asst Collector, Customs & Central Excise Division Vs M/s Pamwi Specialty And Tissue Paper Ltd (Dated : September 27, 2011)

Central Excise - Prosecution - Prior permission of Principle Collector / Chief Commissioner - Reasonable opportunity to present evidence - P rior sanction of Principle Collector under the Act is not required for prosecuting the accused before filing the complaint. The circular No. 15/90-CX6, dated 9.8.1990 is the internal circular of the department and it refers to what steps are to be taken before filing the complaint. The complainant was not given reasonable opportunity to adduce evidence, hence the order of the Judicial Magistrate is not sustainable. The trial Court shall give only one opportunity to the complainant to produce entire pre-charge evidence. Appeal allowed on these terms. (Para 11 & 12)


Industrial Development Bank Of India Ltd Vs Deputy Commissioner (Arrears Recovery Cell), Central Excise And Customs (Dated: April 4, 2012)

Central Excise – Recovery of arrears – Precedence of the claims of secured creditors

likes Banks and the Financial Institutions over the Central Excise Department - It is well settled that though the common law principle of priority of government debt is applicable, in the event of the rights of a subject and sovereign are at conflict, it must yield to statutory provisions - When the Central Excise Act or the Customs Act do no specifically and explicitly create first charge in the matter of recovery of excise and customs duty dues, the department cannot succeed in recovery - Section 35 of the SARFAESI Act gives over-riding effect to the provisions of the SARFAESI Act notwithstanding anything contained therein or any other law for the time being in force or any instrument having effect by virtue of any such law - Section 11 of the Central Excise Act, 1944 or Section 142(1)(C)(II) has no over-riding effect over the SARFAESI Act or for that matter DRT Act - Department cannot claim any priority over the recovery of the government dues over the claim of the Bank, an order under DRT Act or an order or proceedings taken out under the SARFAESI Act - DRT Act / SARFAESI Act are special enactments and Central Excise and Customs Acts are general Acts - Special enactments have over-riding effect over all other laws -There was no provision at the material time to create first charge with the department and new provisions under Section 11 E of the Central Excise Act, 1944 and Section 142A of the Customs Act, 1962 will come into force only on their enactment.

Notification No 68/63 issued under Section 12 of the Central Excise Act, 1944 for recovery of duty by making the provisions of Section 142(b) and 142(1)(c)(ii) applicable to central excise duty - Absence of “ recovery” in Section 12 - Introducing or omitting any words from a tax law provision in a statute is not permissible - When the language of the statute is plain and clear, any exercise to know the intention of the legislature is not called for nor the taxing officer travel beyond the power to levy and collect tax -When Section 12 of the Central Excise Act enables Government to make applicable the provisions of the Customs Act relating to various aspects of levy and collection of Customs duty etc and when Section 12 is silent as to the procedure of recovery of sum due to government under the Customs Act, vires of notification No.68/63 is doubted – However, the present case is decided on the assumption that Section 11 of the Central Excise Act, 1944 read with Notification No 68/63 CE(NT) enables the empowered officer to recover the excise dues also by attachment and sale of movable or immovable property as the vires of notification No.68/63 was not specifically challenged.



Swastik Sanitarywares Ltd Vs UoI (Dated: August 29, 2012)

Central Excise – Refund of excise duty paid twice due to clerical error – Limitation under Section 11 B – Such excess payment cannot take the character of duty paid –Refund of such amount is not governed by the provisions of Section 11 B – Refund claim cannot be rejected by applying the limitation under Section 11B – Petitioner entitled for refund of the amount along with simple interest at the rate of 9% per annum after a period of three months from the date of the application till actual payment.



CCE Vs CEAT Ltd (Dated: : September 12, 2012)

Cenvat credit wrongly availed - Penalty - Tribunal has recorded a finding of fact that though the assessee had suppressed the fact of claiming depreciation on capital goods, it was a bona fide error and there was no intention to evade duty - on realising the mistake, the assessee took steps to withdraw the claim of depreciation and since that did not materialise, the assessee offered to pay the duty with interest - in these circumstances, the decision of the Tribunal that Section 11AC of CEA, 1944 is not

attracted, cannot be faulted – since assessee has paid the entire amount of Rs.17,96,685/- with interest of Rs.1,80,439/- and the reduced penalty as imposed by the Tribunal of Rs.4,50,000/-, the entire claim of the revenue stands discharged –appeal disposed of: Bombay High Court. [paras 9 & 10]


M/s Tata Motors Ltd Vs UoI (Dated: September 7, 2012)

S.4 of the CEA, 1944 – Inclusion of PDI and free after sales services charges incurred by the dealer during the warranty period in Assessable value is contrary to the provisions of Section 4(3)(d) of the Central Excise Act, 1944 - Clause 7 of the Board Circular dated 1st July, 2002 is illegal and void – so also, Circular dated 12th December, 2002 to the extent it confirms Clause 7 of Circular dated 1st July, 2002 is void and illegal and hence quashed - question framed answered in favour of the assessee and against the Revenue: Bombay High Court.



Sunil Mittal Vs CCE (Dated: April 9, 2012)

Central Excise – Clandestine Removal – the appellant accepts and admits that there was clandestine removal and sale of resin but it is submitted that the quantity computed by the Tribunal is based upon surmises and conjectures - There is no error in the findings by the Tribunal on the said aspect or any reason to infer that the finding is perverse or not justified (Para 4 & 6).

Central Excise – Clandestine Removal – The plea of the appellants is that no penalty can be imposed on limited companies incorporated under Companies Act, 1956, under Rule 26 of the Central Excise Rules, 2002 – Followed the decision of Agarwal Trading Corporation and Ors - legislative intent to prosecute corporate bodies for the offence committed by them is clear and explicit and the statute never intended to exonerate them from being prosecuted - The Legislature never intended to give immunity from prosecution or penalty for grave economic crimes - In such cases it is not possible to impose penalty of imprisonment because the company is a corporate body and not a natural person but fine or cash penalty can be imposed (Para 9 & 10).

Central Excise – Clandestine Removal – Penalty/Fine – The plea is that the fine imposed under Rule 26 is not justified as the Tribunal was not able to quantify the exact quantity of resin clandestinely dealt with or transported/sold – In the cases of clandestine removal, there is always an element of estimation - At the time of search in the premises of appellants offended goods procured and purchased was found -There is no merit in the said contention (Para 12).


UoI Vs M/s Focus Contrade Pvt Ltd(Dated: August 6, 2012)

Rebate u/r 18 of the CER, 2002 – it is not the case that Revenue would have allowed the rebate claim but for the letters addressed by the assessee to keep the matter in abeyance in view of representation to the Finance Ministry – SCN had already been issued for rejection of rebate claims - interest payable – Revenue petition dismissed: High Court [paras 6 & 7]



M/s Swasthik Tobacco Factory Vs CC & CCE Settlement Commission, Chennai (Dated: July 20, 2011)

Settlement Commission cannot mechanically interpret s. 32K of the CEA, 1944 - The Legislature/Parliament would not have perceived the eventuality like Tsunami and the ban of tobacco by the State Government - When those grounds pleaded by the petitioner are material, they should be considered - reasoning given by the Settlement Commission for denying the immunity from interest is erroneous – similarly placed persons were given total immunity and petitioner is also entitled to relief: High Court [paras 5, 6, 7, 8 & 9]



CCE & ST Vs Ratanamani Metals & Tubes Ltd (Dated: July 23, 2012)

S.4 of CEA, 1944 – Undervaluation - Assessee clearing job worked goods on challan cum-invoices and which were the duty paying documents submitted along with the RT-12 returns - description of the goods was specifically stated in invoices as 'M.S. Fabricated pipes from your supplied free issue material'– allegation of suppression not sustainable – findings of CESTAT are in the realm of appreciation and not perverse –Revenue appeal dismissed: High Court [paras 6, 6.1 & 7]


2012-TIOL-599-HC-P&H-CX

Shree Ram Steel Industries Vs CCE (Dated: July 16, 2012)

Once the Tribunal had waived the condition of pre-deposit of penalty imposed u/r 25 of CER, 2002 on the registered dealer for the alleged supply of “invoices” without material, there cannot be an automatic dismissal of his appeal on account of non-payment of the pre-deposit of the Cenvat credit allegedly fraudulently taken by the manufacturer – Tribunal could not have reviewed its earlier order – order set aside and Tribunal directed to hear appeal on merits: High Court [paras 7, 8 & 9]



CCE, PuneIII Vs Ajinkya Enterprises (Dated: June 26, 2012)

Manufacture - Cutting & slitting of HR coils and subjecting same to pickling and oiling - Department cannot approbate and reprobate – when applicant has taken Cenvat credit and paid duty, which as per Department is not payable, yet having accepted same, department cannot refuse CENVAT credit on inputs – Revenue appeal dismissed: Bombay HC. [paras 8, 9, 10 & 11]

Till 1st March 2005 the Revenue has accepted that the activity carried on by the assessee constituted manufacturing activity in view of Board Circular dated 7th September 2001 and accordingly held that the assessee is entitled to take credit of duty paid on HR / CR coils. It is only because, the Board, on 2nd March 2005 has withdrawn the Circular dated 7th September 2001 the Revenue is claiming that the

activity carried on by the assessee does not amount to manufacturing activity - It is relevant to note that the Board in its Circular dated 7th September 2001 had only held that the activity of cutting / slitting of HR / CR coils in to sheets or strips constitutes manufacture. Admittedly, the assessee had carried on additional activities such as pickling and oiling on the decoiled HR / CR coils, which is a complex technical process involving huge investment in plant and machinery - Since these additional activities were not considered by the Board in its Circular dated 7th September 2001, the withdrawal of the said Circular cannot be a ground to hold that the activity carried on by the assessee did not constitute manufacturing activity....paras 8 & 9

It is only on 24th June 2010, the Board has issued a Circular to the effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March 2005 to 31st December 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted ...para 9.



Sharp Global Ltd Vs CCE (Dated: July 19, 2012)

Question of interfering with an interlocutory order of the CESTAT on the question of pre-deposit would arise in such cases when the condition imposed is claimed to have caused excessive or substantial hardship or incapacity – merely claiming that the order to make a pre-deposit of Rs. One crore is unreasonable is no cause for interfering with the order – Appeal Petition dismissed: High Court [para 3]


2012-TIOL-539-HC-ALL-CX

M/s Nanumal Glass Works Vs CCE (Dated: May 7, 2012)

Central Excise - Date of service of order of Tribunal - Section 37C of the Central Excise Act, 1944 read with Rules 13 and 35 of Customs Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 clearly indicate that communication of the order to authorised agent of a person is sufficient communication. Thus when the order passed by the Tribunal in presence of counsel of the assessee, the order shall also be deemed to be communicated on the same date and the submission of the assessee that unless the order is received by the assessee in person, the order shall not be treated to be communicated to the assessee, cannot be accepted.



M/s Raghunath International Ltd Vs UoI (Dated: May 21, 2012)

Additional Director General, DGCEI has jurisdiction to issue show cause notice - by virtue of a person being a Commissioner of Central Excise, the power to function as a Central Excise Officer is already invested in him and no further investment is required or necessary by issuance of a notification in the Official Gazette – Petition dismissed:

Allahabad High Court

Scheme of Section 2(b) of the Act, 1944 never contemplates appointment of the Officers of the Central Excise Department under the Rules. The Rules have to be read to supplement the provisions of the Act and to carry the purpose and object of the Act.

In case Rule 3 of the 2002 Rules is interpreted to mean that the Board, even if the Officer is Chief Commissioner of Central Excise or the Commissioner of Central Excise is to be invested with the power by the Board to work as Central Excise Officer, the said is wholly redundant and useless exercise. The Chief Commissioner, Central Excise is the highest officer of the department and the Chief Commissioner, Central Excise or Commissioner, Central Excise undoubtedly can exercise all the powers of the Central Excise Officers under the Act.

If the argument of the petitioner's counsel is accepted then even when the Commissioner, Central Excise issues notice under Section 11A of the Act, 1944 there has to be notification in the Official Gazette of his appointment as Central Excise Officer this interpretation leads to absurdity since neither Section 2(b) of the Act, 1944 nor Rule 3 of the 2002, Rules can be read to mean that even appointment of Commissioner of Central Excise is to be notified in the Official Gazette before he exercises power under Section 11A of the Act, 1944.

Appointment by notification which is to be published in the Official Gazette is contemplated only with regard to the persons who are not already officers of the Central Excise Department since investing of power by the Board is contemplated in only last category in the definition of Section 2 (b) of the Act, 1944 and all three categories are joined by the word "or" which is disjunctive.

No such provision has been referred to nor shown which may require approval before issuing the show cause notice of the adjudicating authority/officer - submission of the petitioner that prior permission of the adjudicating authority is required before issuing the show cause notice dated 01/10/2009 is without any substance.


2012-TIOL-516-HC-KOL-CX

Madura Coats Pvt Ltd Vs CCE, Kolkata-IV (Dated: July 3, 2012)

Interest on delayed refund of pre-deposit – period for which petitioner is entitled to interest on pre-deposit of delayed refund was the same as in the case of ITC Limited -parity demands that the petitioner is also entitled for interest @ 12% per annum -Revenue cannot take advantage of the fact that this Court while referring to the circular dated 08.12.2004 did not mention the rate at which interest was to be paid to the petitioner – even during the material period when judgment was delivered interest u/s 11BB of the CEA, 1944 stood at @6%, yet the Supreme Court ordered for payment of interest @12% - section 35FF came into being on 10.05.2008 and does not apply to present case concerning period May 2005 to October 2007.


2012-TIOL-511-HC-MP-CX

Shri Jay Kumar Lohani Vs CCE (Dated: March 21, 2012)

Petitioners could not point out any legal provision requiring the authorities to first

adjudicate the notice issued regarding confiscation and then only they could have issued the show cause notice regarding recovery of dues and penalty – contention raised is wholly misconceived – Writ Petition dismissed: High Court [paras 6, 7, 9, 10, 12 & 13]

Also see analyss of the Order


Hyva India Pvt Ltd Vs CCE & C, Mumbai (Dated: March 1, 2012)

Rule 10A of Valuation Rules, 2000 - fabricating bodies on duty paid chassis - whether applicants are liable to pay duty on price at which vehicles are sold by Tata Motors -Pre-deposit ordered of Rs 50 lakhs by CESTAT set aside – Matter to be decided within four months

Also see analysis of the Judgement

2012-TIOL-483-HC-UKHAND-CX

CC & CCE Vs M/s Aquamall Water Solutions Ltd (Dated : June 7, 2012)

Assessee has only one customer i.e holding company – the related person sells goods not in wholesale but in retail - Expenditure incurred on account of freight and insurance charges for carrying goods from the factory to depots - instant matter stood closed as far back as in 2003 - Subsequent matters were permitted to be closed in favour of the assessee by not taking up the matters higher up from the Tribunal - in the circumstances, it would not be appropriate to interfere with the judgment of the Tribunal – matter closed and Central excise reference dismissed: Uttarakhand HC


UKB Electronics Pvt Ltd Vs CCE (Dated : May 29, 2012)

Supplier had never manufactured PVC compound and PVC Master Batches which were allegedly sold to appellant and who had availed cenvat credit of Rs. 72,56,374/- -looking at the nature of dispute and contentions raised, appellant directed to deposit 50% in two equal instalments over eight weeks - Tribunal order directing payment of Rs.50 lakhs as pre-deposit modified: Delhi HC. [paras 5 & 6]


M/s Pearl Engineering Co Vs CCE (Dated : May 25, 2012)

CNC wire cut machine used in the manufacture of dyes and tools which are intermediate products - tools and dyes were required as every customer who approaches the appellant requires laminates or stamping with his name, logo etc. and for this purpose tools and dyes have to be first produced as per the needs and requirements of the customer - words 'bringing about any change in any substance for the manufacture of final products' in Explanation to rule 57Q is also broad and wide -manufacture of dyes and tools forms part of a single, continuous and inseparable process in the entire chain and is a step towards and for manufacture of the laminations or stampings – appellant to Modvat credit: Delhi High Court [paras 7 & 8]


CCE, Mumbai Vs M/s Castrol India Ltd (Dated : June 25, 2012)

Central Excise - When the legislature specifically fixes the time limit within which the duty with interest and penalty at 25% is to be paid for availing the incentive, it would neither be open to the appellate authority nor any other authority to permit the assessee to pay 25% penalty at any time other than the time prescribed under Section 11AC: Bombay High Court [para 25]

When the liability to pay 25% penalty under the first and the second proviso to Section 11AC is required to be paid within thirty days from the date of communication of the order of the Central Excise Officer determining duty under Section 11A(2), it would not be open to the appellate authority or the Court to direct the assessee to pay 25% penalty beyond the date stipulated in the first and the second proviso to Section 11AC. [para 27]



Harsh International (Khaini) Pvt Ltd Vs CCE (Dated : May 29 , 2012)

Capital goods used for a period of 2 to 4 years cannot, therefore, be stated to be sold “as such” capital goods - appellant was not liable to pay excise duty in accordance with Rule 3(5) of CCR, 2004 when it removed the used capital goods in June/July, 2007 - since there is no liability to pay excise duty, consequently the goods are not liable to be confiscated – no question of payment of any penalty or interest: Delhi HC [paras 13, 14, 15, 16 & 19]



UoI Vs M/s Sonnenflex Abrasives Pvt Ltd (Dated : March 15, 2012)

Central Excise - Extended period of limitation - Disclosure of facts - Using of brand name - The argument that the assessee bona fide believed that inscribing words “in technical collaboration with West German Company” would not constitute user of the brand name of the West German Company deserves acceptance, especially when there were several decisions of the Tribunal as also the decision of the Apex Court, which supported the argument of the assessee. Subsequent ruling to the contrary, would not mean that the assessee has suppressed the facts. Extended period not invokable. (Para 11)

2012-TIOL-444-HC-KAR-CX

CCE, Bangalore Vs M/s Vijaya Steels Pvt Ltd (Dated : March 2, 2012)

Central Excise - Penalty - Duty for the month of March 2006 not debited by the

banker from their overdraft account in spite of specific instructions - Assessee paid the amount along with interest during the scrutiny by the audit party - No case for imposing penalty under Rule 26 of the Central Excise Rules, 2002 - Penalty rightly confirmed by the CESTAT under Rule 27 as Rs 5,000/- Revenue appeal has no merit.


CCE, Bangalore Vs Shri Dhiren Gandhi (Dated : September 23, 2011)

Central Excise – Recovery of Dues – Dues from a deceased assessee cannot be collected from his legal heir: The amount due to the government under Section 11 is also recoverable from the person to whom the person chargeable to duty under the Act has transferred or otherwise disposed of its business or trade in whole or in part or effects any change in the ownership thereof in consequence of which he succeeded to such business or trade by any other person i.e. monies can be recovered from the successor in respect of the amounts due from such predecessor at the time of such transfer or otherwise disposal or change. Therefore the proviso is attracted to cases in which the person chargeable to duty transfers or dispose of the business which he is carrying on during his lifetime. If any amount was due from the predecessor in title, the successor in title is liable and it is to be recovered from him. There is no provision which empowers the authorities to recover due from a deceased assessee by proceeding against his legal heirs. The way Sec. 11 and 11A are worded it is amply clear, the legislature has consciously kept away the legal heirs from answering to liabilities under the Act. The legislature, while amending Sec.11 by introducing a proviso, did not foist any liability on the legal heirs of a deceased assessee under the Act.



Madura Coats Pvt Ltd Vs Asstt.CCE, Madurai (Dated : April 24, 2012)

Central Excise – Expiry of Stay order beyond 180 days under Section 35C(2A) of the Central Excise Act, 1944 - Coercive action to recover the disputed amount initiated by the department - Though the respondent was empowered to act upon the impugned proceedings, but, at the same time, it was incumbent on his part to keep in mind the non-availability of the Tribunal and maintain status quo until further orders, but not to take advantage of the expiry of stay and no extension thereof, which were wholly due to non-availability of the quorum - No coercive steps shall be taken by the respondent against the petitioner towards demands and the interim stay shall continue until the appeals are taken up by the Tribunal.



Fidelity Magnetics Vs CCE (Dated : April 24, 2012)

Having granted full waiver of pre-deposit while deciding the Stay application, the Tribunal in the absence of any special circumstances ought not to have ordered pre-deposit while remanding the matter to the Commissioner (A) – question of law whether Tribunal can remand the matter back with direction to the appellant to first pre-deposit a part of the duty even though the Act does not provide for the same left

open: Bombay HC [paras 7, 8]



Amidev Agro Care Pvt Ltd Vs UoI (Dated : February 3, 2012)

Central Excise – Service of Orders – Order in Appeal sent by Speed Post not a valid service; As per Section 37C(1)(a), it was mandatory on the part of the Revenue to serve a copy of the order of Commissioner of Central Excise (Appeals) by registered post with acknowledgment due to the assessee.


Gujarat Paraffins Pvt Ltd Vs UoI (Dated : April 30, 2012)

Notification No.14/1997-CE (NT) dated May 3, 1997 restricting admissibility of Modvat credit for all the petroleum products to the extent of 10% irrespective of the fact that whether the inputs were manufactured in India or the inputs were imported into India, is ultra vires Articles 14 and 19 of the Constitution of India [paras 39, 40]



CCE Vs GTN Engineering (Dated : August 25, 2011)

Central Excise – Exports – Refund of CENVAT Credit – Relevant date is the date on which the final products are cleared for export: A reading of the Rule, though there is no specific relevant date prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT Credit.



Emcon Technologies India Pvt Ltd Vs Addl.CCE, Chennai (Dated : February 15, 2012)

Central Excise - Writ Petition - Maintainability of Writ Petition filed against the Order-in-Original passed by the Joint Commissioner of Central Excise - The petitioner company ought to have availed the appellate remedy, by filing an appeal before the Commissioner (Appeals), Chennai - The petitioner has chosen to prefer the present writ petition before the High Court, under Article 226 of the Constitution of India, without showing proper cause or reason to do so - In view of availability of alternate efficacious remedy, Writ Petition is not maintainable


CCE, Raigad Vs Shree Anupar Chemicals India Ltd (Dated : April 2, 2012)

Central Excise – Penalty – Opting out of the SSI exemption notification No 9/99 CE dated 29.9.1999 in the middle of the financial year – Once the assessee has been permitted not to avail the benefit of the notification before the end of the financial year, there is no question of violating the condition of the notification - Under Rule 173Q of the Central Excise Rules, 1944 penalty can be imposed where the assessee contravenes any of the provisions of the rules with intent to evade payment of duty -It is not the case of the revenue, that the assessee intended to evade payment of duty, because by opting out, the assessee has cleared the goods on full payment of duty – No error in the Tribunal's order setting aside the penalty.


Commissioner Vs M/s Jet Granito Pvt Ltd (Dated : January 12, 2012)

Central Excise - Settlement Commission Order - SCN issued demanding duty based on mis-declaration of MRP of tiles - Settlement Commission reduced duty amount by allowing reduction of 10% from the MRPs arrived at on weightage average basis towards notional price revision considering the inflation and other cost escalation factors – Revenue filed Writ Petition - Approaching the Settlement Commission by the respondent subsequent to the issuance of the show cause notice was not a voluntary act - After carrying out the search by DGCEI, all the manufacturers of the tiles revised the rates and increased the MRP of tiles without making any changes in the quality/design of tiles for the period prior to 1.4.2008 - Gross undervaluation of MRP and evasion of taxes are duly established by the petitioner and in such circumstances, when weighted average of MRP of tiles was worked out by the petitioner for the duty short paid by the respondent due to such undervaluation, the method adopted by the Settlement Commission for arriving at the MRP for the relevant period is not at all found conducive or scientific - Case remanded to Settlement Commission for reconsideration (Para 1, 18 & 19).

2012-TIOL-359-HC-AMH-CX

CCE, CC & ST, Vapi Vs M/s Sarla Performance Fibres Ltd (Dated : January 19, 2012)

Central Excise – EOU – Third Time Cess – Issue involves rate of duty – Appeal lies with Supreme Court: the dispute between the parties and which came to be settled by the Tribunal by the impugned order is with respect to the question whether the manufacturers are required to pay education cess on the computation of the customs duty and the CVD on which, once they have already paid such education cess . The Tribunal ruled in favour of the manufacturers and rejected the Revenue's case that such education cess was required to be paid once again. Such decision of the Tribunal would certainly be covered under the expression " the order determining a question having relation to the rate of duty of excise" . If the Department is correct in its stand, the manufacturers would have to pay excise duty at a rate higher than what they have been paying. In other words, computation of excise duty would have to include component of education cess . On the other hand, if the manufacturers are correct in their stand, such education cess would be excluded. In any case, it would have a direct bearing on the rate at which manufacturers should pay the excise duty on their clearances in the DTA from EOU Units. These Appeals would not be maintainable before the High Court. Such appeal would lie only before the Apex Court in terms of proviso contained in Section 35L of the Act.


M/s Devta Steel Rolling Mills Vs CCE, Chandigarh (Dated : April 24, 2012)

Central Excise – Reference Petition before High Court – Demand not sustainable on reference order by High Court until Tribunal passes a fresh order: Department files reference application against Tribunal Order. High Court answers reference in favour of Department. Department tries to enforce demand. The tribunal, after the decision by the High Court or the Supreme Court, is required to pass order to dispose of the case in conformity with such judgment. Unless, such an order is passed, the earlier order passed by the Tribunal remains in existence.



M/s Dharampal Satyapal Ltd Vs Commissioner Of Central Excise (Dated : April 3, 2012)

Central Excise –Pre-deposit of duty – Tribunal ordered for pre-deposit of Rs.3Crores in each case apart from the duties already paid by the appellants - T here is a prima facie case for consideration before the tribunal. No opinion expressed on merits, which may have effect on the decision of the appeal – Pre-deposit amount reduced to Rs.2Crores, which is inclusive of duties already paid, in each case.


CCE Vs M/s Nimish Engineering Pvt Ltd (Dated : March 21, 2012)

Central Excise - Refund - Limitation - Refund of duty deposited voluntarily on issue of Show Cause Notice - Refund claim filed consequent to favourable order in adjudication - Refund claim cannot be rejected on the ground that the claim was filed beyond period of limitation - No error in the order of Tribunal - Question of law answered in favour of the assessee and against the revenue.


Vinod Kumar Gupta Vs CCE (Dated : March 16, 2012)

Central Excise - Issue of invoice without movement of goods - Penalty on proprietary concern / partnership firm as well as on the proprietor / partner - Legality of - A firm in mercantile usage is the firm in its own, strictly in the eye of law, it is not a legal entity like a natural person. Therefore, the rights and obligations of a firm are really rights and obligations of the individual partners of the firm, therefore, penalty imposed on the firm would amount to imposition of penalty to the proprietor or the partner, as the case may be, therefore, imposition of penalty on the proprietor independently would not be legal.


M/s Indoworth India Ltd Vs CC & CCE (Dated : March 28, 2012)

Central Excise - 100% EOU - Clearance of goods to DTA by availing benefit of concessional rate of duty under Notification No. 23/2003-CE dated 31.03.2003 -Appellant imported anti-static oil (selbana) and coning oil (katex) which were used in manufacture of final products cleared in DTA - Failure of appellant to disclose usage of these raw materials in the manufacture of final products, resulted in revenue denying benefit of concessional rate under Notification 23/03-CE - Benefit of Notification denied on the ground that appellant suppressed material facts resulting in demand of duty with interest and penalty - CESTAT ordered pre-deposit of Rs. 5 crores when appellant admitted that only Rs. 5.64 crores was within period of limitation - On appeal High Court set aside CESTAT order with a direction to decide matter afresh and in accordance with law by considering plea of financial hardship – CESTAT after hearing the case once again ordered pre-deposit of Rs. 5 crores

Appeal for waiver of pre-deposit before High Court – Plea based on bonafide belief of eligibility of benefit of notification as well as financial hardship – From the material on record before adjudication authority, it appears that anti-static agents are used as processing aids to reduce friction, control static charge build up and to increase cohesion between fibres, and not as raw materials as such – Consumption of ‘selbana' only 0.02% of fibre by weight – Similarly, coning oil used as processing aid and not as raw materials in manufacture of final product – In the instant case, since approximate consumption of imported ‘selbana' is only 0.02%, assessee formed a belief that it was a consumable and not a raw material in the manufacture of final product – It is not in dispute that plant, machinery and buildings belonging to assessee already taken over by ARC (India) Ltd – Assessee also declared a sick unit under SICA, 1985 – In the facts and circumstances of the instant case, issues being highly debatable, a fit case for grant of full waiver of pre-deposit – CESTAT order directing pre-deposit of Rs. 5 crores quashed – CESTAT directed to hear case on merits without insisting on pre-deposit and without being influenced by observations of High Court – Section 35G read with Section 35F of Central Excise Act, 1944 .

2012-TIOL-315-HC-JHARKHAND-CX

M/s Pre-Stressed Udyog India Pvt Ltd Vs CCE, Ranchi (Dated : March 30, 2012)

Central Excise - CENVAT Credit - shortage of Raw Material - Penalty Confirmed: The appellant claimed the benefit of transit loss of 22293 of cement bags and even if, it is in weight a petty quantity as compared to total cement received by the appellant, then also it cannot be said to be insignificant quantity of cement bags for the appellant and small quantity for the revenue. Apart from this, there is no other defence of the appellant on the question of fact and therefore, even in spite of being some fault in the writing of the order by the first appellate authority, Commissioner (Appeals), Central Excise & Service Tax, High Court was of the view that no ground is made for interference with the impugned order.

Benefit of Proviso to Section 11AC : benefit cannot be given to the person who did not deposit the amount in time knowing the law very well and tried to evade the provisions of law and further to the person who did not deposit such amount before preferring the appeal. The appellant, even before lower appellate authority, did not pray to permit him to deposit 25% of the amount of penalty and interest, therefore, High Court was not inclined to extend that period available under section 11AC and thus, the appellant is not entitled to such benefit.

Quality of Adjudication/Appellate Orders : in the process of giving brief statement of submission of the appellant, if all the grounds running in several pages are quoted in any order or judgment and that too in a different font, then it may be possible that instruction may have been given to the Steno or any other person to type verbatim the grounds raised in the appeal starting from one point to the last point. It will be appropriate to mention here that in the judgment, if there is reference of previous judgments, then such portion also are required to be quoted, but for the purpose of

finding out application of mind upon the ground raised by the appellant, mere quoting of the grounds verbatim and extenso in the order itself cannot be application of mind on the grounds raised by appellant. Such practices are required to be deprecated and the Appellate authority and the Tribunal should be very precise in narrating the facts of the case and the grounds raised by the parties.



CC & CCE, Hyderabad Vs M/s Ampro Industries Pvt Ltd (Dated : September 27, 2011)

CE – Refund – Interest to be paid by the Department after expiry of three months from the date of claim, not date of order: On a careful consideration of the judgment of the Supreme Court in Shreeji there is no principle enunciated that the liability to payment of interest must be computed from not the time an application is made under Section 11B (1) (referred to in Section 11BB of the Central Excise Act, 1944) but from the time an application is made subsequent to final adjudication by the Tribunal and only an application for refund made subsequent to the final adjudication by the Tribunal which must constitute the starting point for calculation of the three months period beyond which interest is liable to be paid.


Munch Food Products Limited Vs Commissioner And Anr (Dated : March 2, 2012)

Central Excise - Refund - In spite of Tribunal's Order, refund not granted - Refund ordered to be granted within six weeks: the present case is rather old and there are several rounds of litigation. The petitioner had succeeded before the tribunal, who had passed a detailed order dated 27th March, 2002. The respondents thereafter did not adjudicate and passed the consequential orders till 2007. This is in spite of the fact that the petitioner had filed an application on 18th February, 2003 before the respondents to process their claim for refund. There is no explanation for delay of five years. The order dated 20th July, 2007, in fact, makes reference to another refund claim application dated 24th February, 2004. Refund ordered.


2012-TIOL-299-HC-GUW-CX

M/s Dharampal Satyapal Ltd Vs DCIT, Guwahati (Dated : December 1, 2011)

Central Excise – Retrospective withdrawal of exemption Notification - High Court holds that OIO not vitiated by absence of notice – same issue cannot be agitated again before Tribunal and Court: This Court held that no prejudice was caused to the appellant by absence of show cause notice. Thereafter, the appellant agitated the same issue before the departmental appellate authority and vide order dated 24.6.2005, the appellate authority set aside the order in original dated 6.6.2003 and remanded the matter for fresh consideration, ignoring the judgment of this Court dated 18.4.2004. However, on further appeal by the Revenue, the CESTAT set aside the said order holding that the appeal itself was not maintainable and objection to the recovery proceeding was not open to the appellant in view of judgment of the Supreme Court in R.C.Tabacco (P) Ltd. and another vs. Union of India and another ( 2005-TIOL-115-SC-CX) . The correctness and validity of the order 6.6.2003 has already been put in issue by the appellant in a writ petition before this Court and it was held that absence of show cause notice under Section 11A did not affect the

validity of the order dated 6.6.2003. The said judgment has admittedly become final and the finding recorded therein is res- judicata. The same, therefore, cannot be allowed to be re-agitated.



M/s DGP Hinoday Industries Ltd Vs CCE, Pune-1 (Dated : March 20, 2012)

Central Excise – Liability to pay interest under Section 11AA in respect of provisional assessments before 01.07.2001 – The appellants were taking mutually exclusive and inconsistent stands before the adjudicating authority, CESTAT and the High Court with regard to the status of assessments – Matter remanded to the CESTAT with a direction to verify the factual position – If the assessments were provisional under Rule 9B, no interest liability arises under Section 11AA – If the assessments were not provisional, appropriate action to be taken for submitting false information – Costs of Rs 25,000/- imposed on the appellants.



M/s Azra Poultry Equipments Vs UoI (Dated : March 7, 2012)

Central Excise - Classification - welded wire mesh for poultry industry cannot qualify as machinery under heading 84.36: What is significant is that heading 84.36 refers to poultry keeping 'machinery'. A mere equipment or structure for 'poultry keeping' would not qualify classification under heading 84.36. To fall under heading 84.36 the test, of being a machinery has to be satisfied. The Concise Oxford Dictionary 10th Edition defines 'machine' as an apparatus using or applying mechanical power and having several parts, each with a definite function and together performing a particular task. 'Machinery' is defined as machines collectively, or the components of a machine. Similarly the Black's Law Dictionary 8th Edition defines 'machine' as a device or apparatus consisting of fixed and moving parts that work together to perform some function. there can be no doubt that the Wire mesh manufactured by the petitioner even if sold to a poultry farmer for assembling of cages for poultry or battery of such cages cannot qualify as machinery under heading 84.36 and would be an article of iron and steel wire within the meaning of heading 7314.



Everest Flavours Ltd Vs UoI (Dated : March 29, 2012)

Central Excise - Rebate - Claim has to be filed within one year: Section 11B categorically comprehends a rebate of excise duty on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India. Since the statutory provision for refund in Section 11B brings within its purview, a rebate of excise duty on goods exported out of India or materials used in the manufacture of such goods, Rule 18 cannot be read independent of the requirement of limitation prescribed in Section 11B .



M/s Ranbaxy Laboratories Ltd Vs CCE, Chandigarh (Dated : April 5, 2012)

Central Excise - inputs lying in stock on the date on which the notification exempts the final product - eligible for credit: Even though final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. A right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs, that right would continue until the facility available thereto gets worked out or until those goods existed.



UoI Vs M/s N G Thakkar & Sons (Dated : March 12, 2012)

Central Excise - Refund - Duty paid under protest - Unjust enrichment - In the commercial invoices, the column relating to central excise duty is kept 'blank' meaning thereby that the sale price does not include the central excise duty element. Thus, the commercial invoices clearly indicate that the customers were made known that the central excise duty is borne by the assessee and the same is not passed on to the customers. Refund claim not hit by unjust enrichment. (Para 8)


M/s Raj Chemicals Vs UoI (Dated : March 15, 2012)

Central Excise - Appeal to Commissioner (Appeals) - High Court cannot extend the period of limitation - Limitation Act expressly excluded: When a period of limitation is prescribed for filing of an appeal and the extent of the power to condone the delay is also prescribed by the statute, the exercise of the writ jurisdiction under Article 226 of the Constitution would clearly be not warranted to direct the adjudicatory or appellate authority to breach the provision for limitation. Once the legislature has laid down a period within which an appeal has to be filed and has prescribed the extent to which a delay beyond that period can be condoned, recourse to the provisions of Section 5 of the Limitation Act, 1963 would stand 'expressly excluded' within the meaning of Section 29(2) of the Limitation Act, 1963. High Court in the exercise of its jurisdiction under Article 226 of the Constitution cannot issue a direction, which would command the authorities constituted under the Act to bypass or breach the provisions made in the statute. The Petitioner not having filed an appeal against the order of the Assistant Commissioner, dated 5 March 2010 within limitation, this Court would not be justified in entertaining the petition and directing the Commissioner (Appeals) to condone the delay.



CCE & CC, Vadodara-II Vs M/s Gujarat Narmada Fertilizers Co Ltd (Dated : January 20, 2012)

Central Excise - Assessee paid duty voluntarily even before Show Cause Notice-Commissioner holds no intent to evade duty and so drops penalty, but demands interest - Duty itself not payable; no interest payable: Section 11A ( 2B ) not applicable: In the present case, when the period of limitation had already expired and when the extended period beyond one year was not available to the department as held by the Commissioner himself in his order in original, the respondent was not liable to pay even the basic duty. But for the respondent voluntarily making payment of such duty short-paid, it was not open for the Department to recover the same under sub-Section (1) of Section 11A of the Act. In absence of any such voluntary payment, recovery of the unpaid duty would not have been possible. In that view of the matter, the case would not fall under sub-Section ( 2B ) of Section 11A of the Act. Sub-Section ( 2B ) of Section 11A of the Act applies in a case where there is voluntary payment of unpaid duty before issuance of show cause notice under sub-Section (1) of Section 11A . When the provision refers to show cause notice, it means a show cause notice which could have been validly issued and surely not a notice which had become time barred. If by efflux of time and in absence of availability of extended period of limitation, such show cause notice itself had become time barred, any payment made voluntarily by the manufacturer cannot be viewed as one made under sub-Section ( 2B ) of Section 11A of the Act.

If you don't pay, no duty at all, but if you pay, you have to pay interest also ! . Accepting the stand of the Department that even in such a case once the payment of duty is made, interest liability would follow would bring about an incongruent situation. The recovery of the unpaid or short paid duty would become time barred. If the manufacturer does not pay it voluntarily, it would not be possible for the Department to recover the same. But if he does it voluntarily despite completion of period of limitation, he would, further be saddled with the liability to pay statutory interest. Surely, this was not the intention of the Legislature while sub- Section( 2B ) was introduced in Section 11A of the Act.



CC & CE, Hyderabad Vs M/s Goldstone Teleservices Ltd (Dated : February 21, 2012)

Central Excise - Assessee was compelled to pay duty on Cable Jointing Kits, which was held to be non-excisable; availment of MODVAT credit at the relevant time wasjustified: admittedly the assessee is not a manufacturer of goods inasmuch as it has been held by this Court that the assessee was only assembling Cable Jointing Kits and was not engaged in manufacture. Therefore, availment of MODVAT credit at the relevant time was justified insofar as the assessee is concerned since it was compelled to pay central excise duty on Cable Jointing Kits. Whether the assessee would be entitled to claim a benefit on a future date or avail it from a future date does not arise for consideration. All that can be said is that at the relevant time, the assessee did not act in an illegal manner and for this reason the action taken under the show cause notice issued to the assessee was not justified.



Jabil Circuit India Pvt Ltd Vs CCE, Pune-II (Dated : March 21, 2012)

Central Excise - Appeal - Waiver of Pre- deposit - CESAT order to make pre-deposit of Rs. 1 Crore confirmed: The prima facie view of the CESTAT that the Adjudicating Authority was justified in holding that Thomson India supplied the inputs to the assessee by persons authorized by Thomson India and, therefore, the assessee being a jobworker manufacturing goods on behalf of Thomson India would be covered under rule 10A of the 2000 Rules cannot be faulted.

CE- Valuation - Set top boxes sold through jobworker - Rule 10A applicable? -Whether Section 4(1)(a) of the Act applies and whether the Adjudicating Authority was not justified in invoking Rule 10A of the 2000 Rules is a question to be decided at the hearing of the appeal.



CCE, Allahabad Vs M/s Hindalco Industries Ltd (Dated : February 6, 2012)

Central Excise - Modvat Credit - Credit cannot be denied only for the reason that duplicate copy of invoice was not filed: Modvat credit should not be denied only on the ground that the documents referred to in sub-rule (2) does not strictly comply with the said Rule but contains the details of payment dues, description of goods, assessable value, name and address of the factory or warehouse etc. This position has also been clarified by the Central Board of Excise and Customs by issuing a circular in exercise of its power under Section 37B of the Act and made it applicable to all pending cases. The submission that the Notification No.7/99 dated 9th February, 1999 would come into effect on the date of its publication i.e. 9th February, 1999 only, may be correct but the benefit of that Notification as directed by the Central Board of Excise and Customs has been extended to all the pending cases. The provision of sub-rule (2) is procedural for availing Modvat credit.



Kwality Ice Cream Company Vs UoI (Dated : January 18, 2012)

Central Excise – Limitation – Time limit for demand of interest - The principle adopted by the Supreme Court was that the period of limitation which applies to a claim for the principal amount should also apply to the claim for interest thereon – The period of limitation prescribed for demand of duty under Section 11A is normally one year and, in exceptional circumstance of a case falling under the proviso to Section 11A(1), the period of limitation is five years - Demand of interest beyond normal period of one year is barred by limitation.



M/s Visaka Industries Ltd Vs CESTAT, Chennai (Dated : February 14, 2012)

Central Excise – Stay / Pre-deposit – Grant of Stay Pending disposal of case – though discretion is available, same has to be exercised judiciously – Followed the decision of

Apex Court in the case of Ravi Gupta Vs. Commissioner of Sales Tax, Delhi - 2009-TIOL-47-SC-CT - Ordered for furnishing of Bank Guarantee for Rs.4.5 Crores (Para 30).


2012-TIOL-165-HC-GAUHATI-CX

CC & CE, Shillong Vs M/s Dharampal Satyapal Ltd (Dated : August 19, 2011)

Central Excise – Maintainability of appeal under Section 35 G of the Central Excise Act, 1944 before the High Court – Dispute relating to the Education Cess is not being related to determination of rate of duty or valuation, contention that the appeal lies to Supreme Court under Section 35 L is not correct - The Education Cess is nothing but a surcharge and its levy is completely independent of the levy of excise duty - Its calculation is also independent of the quantum of excise duty, since it is a flat rate of 2% of the aggregate of all duties of excise.

View of the Jammu & Kashmir High Court in Bharat Box Factory 2008-TIOL-407-HC-J&K-CX that a similar question posed would not fall within the parameters of Section 35-G of the Central Excise Act but within the parameters of Section 35-L thereof is not agreeable - The question of whether the levy or non-levy of the Education Cess has no impact on the rate of duty on the manufacture of goods – Appeal maintainable before the High Court under Section 35 G of the Central Excise Act, 1944.

Education Cess – Exemption under Notification No 32/99 CE Dated 08.07.1999 - The Education Cess is not exempted under Notification No.32/99-CE and CENVAT credit of the Education Cess can be utilized under the CENVAT Credit Rules, 2004 only towards payment of such Education Cess.



Sri Sai Enterprises Vs CCE (Dated : February 1, 2012)

Central Excise - Penalty equal to duty under Section 11AC of the Central Excise Act, 1944 - Order-in-Original did not mention that penalty stands reduced to 25% if the amount is paid within 30 days as per the first proviso to Section 11AC - Plea that the adjudicating authority should have mentioned about the reduced penalty - Facts of the case are different from K.P.Pouches case - The conduct of the assessee shows that he was not interested and did not want to take advantage or benefit of the first proviso to Section 11AC - He never intended and wanted to make payment of the duty amount or the interest - No merit in the appeal.



UoI Vs Jindal Drugs Ltd (Dated : January 30, 2012)

Central Excise - Rebate - Interest payable for delayed rebate he expiry of three months from the date of receipt of the application: it is now a settled position in law that the liability of the Revenue to pay interest under Section 11BB commences from the expiry of three months from the date of receipt of the application for refund under

Section 11B (1) and not on the expiry of the said period from the date on which an order for refund is made.



Dorcas Market Makers Private Limited Vs CCE, Chennai (Dated : December 23, 2011)

Central Excise- Rebate - limitation under Section 11B of the Central Excise Act, 1944, will not apply to rebate claim made under Central Excise Notification No. 19 of 2004 : What is not prescribed in the notification cannot be imported into the said notification. No time limit has been prescribed in the relevant notification No.19 of 2004 dated 6.9.2004. When the statutory notification issued under Rule 18 does not prescribe any time limit, section 11 B is not applicable, and based on which the benefit cannot be denied to the petitioner.

Alternate Remedy : there is no necessity to send the petitioner to avail alternative remedy, as facts are before this Court. Moreover, the question of application of either statute or notification issued under rule is the only issue, which has been done by this court. Availability of alternative remedy is not an absolute bar for this Court to exercise Powers under Article 226.



CCE Vs M/s Beas Scientific Dyers (Dated : January 9, 2012)

Central Excise – Penalty equal to duty under Section 11 AC of the Central Excise Act, 1944 – Order-in-original did not mention about the benefit of reduced penalty of 25% if the penalty is deposited within 30 days of from the date of communication of the demand – No error in the order of the Tribunal extending the benefit of reduced penalty – Revenue appeal is wholly mis -conceived.


CCE Vs M/s S K Sacks (P) Ltd (Dated : January 3, 2012)

Central Excise - Penalty under Section 11 AC - Shortage of finished goods - Penalty equal to duty imposed under Section 11 AC reduced by the Commissioner (Appeals) and upheld by the Tribunal - No error in the order of the Tribunal - The discretion exercised by the CESTAT does not suffer from any jurisdictional error nor it violates any provision of law - Revenue appeal has no merit.


Himgiri Plastics Vs CCE (Dated : January 18, 2012)

Central Excise – Appeal – Pre-deposit - The appellant should be given an opportunity to press their appeal. At the same time, interest of Revenue has to be protected and some payment must be made: the appellant has made out the prima facie case. Even

the tribunal has accepted the same as waiver of pre-deposit has been allowed to some extent. The primary question is whether the turnover of the two partnership firms should be clubbed does merit consideration. The Revenue has emphasized that prima facie there is material with regard to clandestine removal but the main or core issue is the quantum of the clandestine removal on which excise duty has been evaded. The appellant should be given an opportunity to press their appeal. At the same time, interest of Revenue has to be protected and some payment must be made. Rs . 40 Lakhs to be deposited in installments and property documents to be deposited with Central Excise.


Manibhadra Fine Trade Services Vs Chief Commissioner Of Central Excise & 2 (Dated : December 8, 2011)

Immovable property purchased by petitioner in public auction conducted by bank under the SARFAESI Act – Central Excise authorities cannot enter its charge in the village land records for recovery of dues from the mortgagee by claiming that they have first charge



Unicorn Industries & 2 Vs Union Of India Thro The Secretary & 1(Dated : December 29, 2011)

Central Excise - Principles of natural justice - Writ Petition seeking directions to prohibit the department from adjudicating upon show cause notice without giving to the petitioners documents, records, registers etc. maintained at the Customs House Laboratory, Kolkata as regards the samples taken from the factory - Since the adjudicating authority has not yet passed any final order, it would not be appropriate to examine the contentions of the petitioners - Any grievance with respect to the conduct of the enquiry can as well be raised once the final order is passed - It cannot be presumed that the final order shall necessarily be adverse to the petitioners -Petition dismissed as premature.


CCE Vs M/s Hans Steel Rolling Mills (Dated : January 6, 2012)

Central Excise - Section 3A - Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1995 - Rule 5 of the said rules will be applicable even in cases where the capacity of the mill is reduced due to change in parameters of the installed capacity -Issue stands settled by the Supreme Court in case of Doaba Steel Rolling Mills - Order of the Tribunal is set aside.


CCE Vs Cec Soma Jv & Anr (Dated : September 05, 2011)

Central Excise - Manufacture - 'prefabricated structural components' for Delhi Metro -No duty payable": The respondents are engaged in the manufacture of 'prefabricatedstructural components'. These are, admittedly, supplied to the Delhi Metro Rail Corporation Limited ('DMRC'). There is a contract between respondents and DMRC for

design and construction of pre-fabricated components of different segments to be used in elevated viaducts or for manufacture of rings for the tunnel, launching girders and trusses in respect of a project of the DMRC . It is not in dispute that this production is unique in nature and utility thereof is restricted to the location for which they are designed and not at any other place. The Tribunal has categorically said that there is no dispute that the components so manufactured by the respondents are intermediate products and duly manufactured at the specified yards and transferred to the site for utilization thereof in elevated viaduct or tunnel. It is also noted that there is no dispute that the same are utilized in the completion of the work. The Tribunal has, therefore, come to the conclusion, that the Notification dated 17.02.2011 applies to the supplies in question and therefore no excise duty was required to be paid. The High Court also referred to the Circular No. 456/22/99-CX dated 18.5.1999 where this aspect was clarified by the Central Board of Excise & Customs. The High Court was of the opinion that both the conditions stipulated in the Circular dated 17.2.2011 stand satisfied in the case of these respondents and the order of the Tribunal is without any blemish.



M/s Samrat Plywood Ltd Vs CCE, Chandigarh (Dated : November 17, 2011)

Central Excise – Whether the Tribunal can order deposit while passing an order under Section 35 C of the Central Excise Act, 1944, remanding the case -Section 35C of the Act, confers jurisdiction on the Appellate Tribunal to pass such orders as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the Authority, which passed such decision or order “with such directions” as the Appellate Tribunal may think fit - Therefore, the jurisdiction of the Appellate Tribunal to issue directions, while remanding the matter to the Adjudicating Authority, cannot be said to be without jurisdiction - Tribunal has the jurisdiction to issue directions under Section 35C of the Act as it considers appropriate in its judicial discretion –No merit in the contention of the appellant as well against the order directing the petitioner to deposit Rs 80 lakhs .

The argument that the appellant should be directed to furnish a Bank Guarantee, is tenable – Supreme Court in ( 2002-TIOL-156-SC-CX ) , has held that the State is not run on the Bank Guarantees and there is no merit in the argument raised by the appellant to permit furnishing of Bank Guarantee.


Havells India Ltd Vs UoI (Dated : December 23, 2011)

Central Excise – Recovery – Revenue initiated recovery proceedings while the stay application and the appeal are pending before the Commissioner (Appeals) –Respondents directed that they should not recover the disputed demand till the Commissioner (Appeals) decides the application for stay - It is open to the Commissioner (Appeals) to take up the application for stay expeditiously.


CCE Vs M/s Chaudharana Steel Pvt Ltd (Dated : September 12, 2011)

Central Excise – Penalty under Section 11 AC - From the findings recorded by the Adjudication Officer and the Appellate Authority, it has to be held that the Tribunal

erred in law, in recording the finding that CENVAT Credit was reversed voluntarily, in order to avoid complicity - The Adjudication Officer and the Appellate Authority had clearly recorded the finding that the CENVAT Credit was reversed on being pointed out by the department - The Tribunal did not take into account the facts of the case, and misread the evidence in holding that CENVAT Credit was reversed voluntarily –Question of law answered in favour of the revenue.


CCE, Allahabad Vs Basti Sugar Mills Ltd (Dated : December 20, 2011)

Central Excise – Quoting wrong provisions in the show cause notice whether takes away the power to levy interest under Section 11 AB of the Central Excise Act, 1944 -In the show cause notice, the Assistant Commissioner had specifically mentioned as to why interest should not be charged under Section 11AC of the Central Excise, Act, 1944 - Factum of charging of interest was already there in the show cause notice -Instead of mentioning Section 11AB he has mentioned Section 11AC to which the respondent assessee was asked to submit its reply - It did not affect the contents of notice as it is well established that mere quoting of a wrong provision would not invalidate the notice, if the proposed action can be justified under any statutory provision.


Pearl Enterprises Vs UoI (Dated: December 21, 2011)

Central Excise - Interlocutory orders - Tribunal granted full waiver of deposit under Section 35 F of the Central Excise Act, 1944 in an identical case of another assessee, but ordered the petitioner to deposit Rs 8 crores as pre-deposit - Application seeking recall of the order of pre-deposit rejected by the Tribunal by holding that it was the discretion of the Tribunal to pass interim orders depending on the facts and circumstances of each case - Held: Discretion does not mean the arbitrary fiat of the person in the office passing the orders - The decision has to be informed by reasons, objectivity and transparency - Whim and caprice are alien to judicial process -Exercise of arbitrary powers is the pre-Constitution concept and approach by the despotic monarchs - Consistency is one of the hallmarks of the judicial discipline, particularly in passing interlocutory orders - The CESTAT has an inherent power under Rule 41 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982, to be exercised for securing the ends of justice - Tribunal directed to hear the matter afresh.



Toyota Kirloskar Auto Parts Pvt Ltd Vs CCE, Bangalore (Dated: October 13, 2011)

Central Excise – Levy of interest upon finalization of assessment – In the entire scheme of Rule 7 of CER, 2002, there is no indication that when an assessee is permitted to pay duty in pursuance of a provisional assessment order, if he is dealing with more than one goods, they have to be treated separately – Even though duty payable under the Act is to be calculated under each head in each case, ultimately it is the total duty payable for all the goods which is the subject matter of provisional and final assessment, which has to be taken into consideration – After final assessment order is passed, if duty paid in terms of provisional assessment is less than duty payable after final assessment, then assessee is liable to pay interest on short fall – In

the instant case, after final assessment adjudicating authority held that there is short payment of Rs. 10.63 lakhs and excess payment of Rs. 1.77 crores – Since assessee has paid Rs. 1.66 crores in excess, interest payment does not arise – Treatment of duty payment under two categories and the approach by the lower authorities in this regard erroneous, unwarranted and not supported by any statutory provision –Impugned order of Tribunal set aside – Rule 7 of Central Excise Rules, 2002


high court ruling · earlier case, app mills ltd., (2011-tiol-1378-cestat-bang) , the same member...

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