TaxTMI 
TaxTMI 
2024 (7) TMI 994
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....er 73, 74 and 84 of the First Schedule to Central Excise Tariff Act, 1985. It was registered with Central Excise department and availing area based benefit under Notification No. 39/2001-CE dated 31.07.2012 upto five years from date of commencement of commercial production with effect from December, 2005. 1.2 After some investigations, Show Cause Notice dated 02.05.2012 was issued to Appellants to explain as to why :- (i) The amount of duty Rs. 43,19,238/- paid on clearance of imported shower from factory by Appellant should not be treated as deposit under section 11D of Central Excise Act, 1944, as it was not required to pay duty on goods not manufactured ; (ii) Central Excise duty amounting to Rs. 2,49,71,610/- (As detailed in Annexure - B to SCN) should not be demanded and recovered under section 11A of Central Excise Act, 1944 read with Notification No. 39/2001-CE dated 31.07.2001 by invoking extended period of limitation; (iii) Amount of Rs. 60,00,000/- paid by it during the course of inquiry towards duty liability, should not be appropriated against it duty liability; (iv) Interest should not be recovered under section 11AB/ 11AA of the ....
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....ve the impugned order Appellants have filed these appeals . 2. Shri P. D. Rachchh, Learned Counsel appearing on behalf of the appellants submits that the Ld. Commissioner, while passing order has dropped demand of Rs. 1,62,67,038/- out of Rs. 2,03,37,180/- demanded on the ground that value at depot at the time of clearance of goods from the factory were not taken for the goods cleared to depot as provided under Rule 7 read with rule 2(b) of Valuation Rules, 2000, but, confirmed the demand of balance amount of duty of Rs. 40,70,142/- by not allowing deduction of Octroi, Municipal Cess paid and discounts allowed to their buyers for period in question. All these amounts were required to be deduced so as to arrive at correct transaction value in terms of the statutory provisions of law. Evidence in relation to above deductions was submitted to Commissioner with reply dated 19.12.2012. After considering such deductions, net amount of duty difference works out to be Rs. 3,81,322/- only and not Rs. 40,70,142/-. He placed reliance on the following decisions:- * Spice Systems Ltd. Vs. Commissioner of Cus. & C. Ex., Noida - 2011 (272) ELT 82 (Tri. Del.) * Commissioner of....
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....s incomplete without the overhead shower arm. Overhead arms were manufactured by Appellant in their factory. Thus, Appellant had manufactured showers by assembling imported parts of shower head with other parts manufactured in factory, affixed their label and cleared it under tariff sub-heading viz. 84818020 after payment of Central Excise duty. Further when it had imported showerhead, the same was classified under Chapter Heading No. 39 as it was made out of plastic materials. After carrying out the above processes, testing and affixing the brand name, it was cleared on payment of duty under Chapter Heading No. 84818020, as it amounts to manufacture under Central Excise Act 1944. In support of its contention and for satisfaction of the learned Commissioner Appellant had also submitted copies of layouts of showerhead, shower arms as well as nature of testing before him. Clearly, the goods imported were inputs for manufacture of shower and after aforesaid process the goods became marketable and there was substantial increase in value of showers sold by appellant as the product contained value addition on account of additional process and components were used to manufacture showers i....
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....in the interest of justice. 2.4 He also argued the impugned Show Cause Notice was time barred. The extended period for demand can be invoked when there was suppression of facts, willful misstatement, fraud or collusion with an intent to evade payment duty. If Revenue intended to invoke the extended period of time, the burden lies upon them to prove the existence of ingredients of the proviso to section 11A. Appellant had filed statutory excise returns regularly. Entire production process was under the knowledge of Department, who has sanctioned and paid refund of the duty amount in excess of amount paid from CENVAT Credit account and therefore, larger period cannot be invoked. 3. Shri Rajesh K Agarwal, learned Superintendent (AR), appearing on behalf of the Revenue, reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both sides and perused the records. We find that the issue involved is whether Appellants is liable to pay the duty, Interest, and penalty confirmed by the impugned Orders in connection with clearance of goods for the period from FY 2007-08 to 2011-12[upto31-01-2012] 4.1 We find that the differential duty d....
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....submitted proofs and Chartered Accountant's certificate in support of their claim of payment of Octroi and Cess and passing on of trade discount to customers. It is settled law that in terms of statutory provisions and decision, show that deductions claimed from assessable value must be actual and not artificial. We find force in appellant's submission that amount of discounts from price passed on to its customers and Octroi/ Cess paid by it to NMMC is required to be deducted from assessable value of goods. Various decisions relied upon by the Appellant on this aspect supports their submissions. Consequently, considering Octroi and Municipal Cess paid by Appellant and the discount given to the various buyers by Appellant, the net amount of duty difference payable Rs. 3,81,322/- is also accepted by Appellant in their written submissions as against confirmation of duty demand of Rs. 40,70,142/- by the Commissioner under the impugned order. Accordingly, we hold that the Appellant is liable to pay the differential duty of Rs. 3,81,322/- along with interest and penalty and Appellant would also be eligible for reduced penalty @ 25 % of the duty demand, subject to the condition that Appel....
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....f Central Excise Rules 2002 unambiguously provide that if an assessee even does not carry out manufacturing activity but carried out any activity whether the same is amount to manufacture or not manufacture, assessee can avail Cenvat credit on the duty paid goods received in the factory. And after any process, if it is cleared from the factory, in case of activity amount to manufacture it is cleared on payment of duty on the transaction value and if the activity does not amount to manufacture then the same is cleared on payment of duty equivalent to the Cenvat credit. Thus, the transactions of appellant are covered by the provision of Rule 16 of Central Excise Rules, 2002. We note that in Excise Appeal No. 11858 of 2016 - DB filed by Shital Industries vs CCE, decided vide Final Order No. 11431/2024 dated 26-06-2024, this Tribunal has held as under:- "4. We have carefully considered the submission made by both the sides and perused the records. We find that in the present case the appellant was denied the Cenvat credit in respect of imported goods on the ground that the appellant's activity subsequent to the import almost does not amount to manufacture. We are of the view t....
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.... 10. Further, it is the admitted fact that the appellants are the manufacturer of excisable goods also. Therefore, as per Rule 3(5) of the Cenvat Credit Rules, 2004, if the activity in question of the appellants does not amount to manufacture, the appellants are required to pay duty equal to credit taken on clearance of such inputs under cover of Central Excise invoices. As in this case, the activity of the appellants does not amount to manufacture, therefore, these inputs are cleared as such. In that event, as per Rule 3(5) of Cenvat Credit Rules, 2004 the appellants are required to pay duty equal to the credit taken thereon and the appellants have paid duty more than the credit availed. 11. The learned Advocate also relied on several case laws, wherein it was held that when duty paid at the time of clearance equal to or higher than the credit availed, the same is to be treated as reversal of credit. Therefore, no further reversal of credit is required as held by this Tribunal in the case of Repro India Ltd. (supra), Punjab Stainless Steel Industries (supra), Drish Shoes Ltd. (supra), SAIL (supra). In this case, it is admitted fact that the department has accepted dut....
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....se the appellant have taken inadmissible credit, therefore, they were issued show-cause notices to reverse the same. From the facts of this case it is very much clear that the appellant have taken inadmissible credit but they have paid the same at the time of clearance with value addition. In that scenario, as held by the Hon'ble Apex Court in the case of Narmada Chematur Pharmaceuticals Ltd., cited supra, where the assessee has wrongly availed modvat credit and was liable to reverse such amount and it was stated that the duty paid and modvat credit availed were identical and therefore consequences of payment of excise duty after availing the credit was revenue neutral. In that case the appeal filed by the Revenue was dismissed by the Hon'ble Apex Court holding that in view of the fact that, admittedly there was no revenue implication and, therefore, the appeal was dismissed. In the case of Vickers Systems International Ltd. (supra) this Tribunal has held that the entire credit availed on inputs to be considered as utilised towards payment of duty on sale of such imported goods, credit reversal is not required. In that situation we hold that payment of duty on value addition on the....
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....n that basis. The entire proceeding of confirmation of demand, interest and penalty is not sustainable." 4.3 In view of the above, we find that the demand of duty Rs. 43,19,238/- is not sustainable. As the final product shower head was cleared on payment of duty and such duty amount was also recovered by the Appellant as per the law and therefore, the payment of duty on goods can not be considered as deposited in terms of Section 11D of Central Excise Act 1944. The Ld. Commissioner has also erred in confirming the demand of duty of Rs.43,19,238/- paid on imported showers treating the same as deposit under Section 11D of Central Excise Act, 1944 on the ground that it had collected Central Excise duty from its customers and so collected duty is required to be deposited under Section 11D of the Central Excise Act, 1944. The requirement for attracting provision of Section 11D is not satisfied in this case as appellant had paid duty under Central Excise Act on clearance of final products. Decisions relied upon by Appellant clearly support their arguments. 4.4 We also find that the Cenvat Credit demand of Rs. 27,61,517/- is also not sustainable in respect of Cenvat credit taken for....