TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 57
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.... July, 2009 to March, 2010 HUL sent goods u/r 4(5)(a) of CCR 2.1 Maxima Solutions E/52199/2024 08.09.2010 30.04.2024 August, 2009 to March, 2010 Job work of labelling packing, cleaning, and bar coding etc of lipstick, nail polish, eyeliner, mascara and face cream, etc. u/r 4(5)(a) of CCR 2.2 HUL E/52198/2024 08.09.2010 30.04.2024 August, 2009 to March, 2010 HUL sent Goods u/r 4(5)(a) of CCR 2. During the relevant period, M/s. Today Jobs, Dehradun Today and Maxima Solutions, Dehradun Maxima were job workers of M/s. Hindustan Unilever Ltd. HUL in Dehradun and had undertaken certain jobs such as wrapping, pouching, packing, labelling, etc. of the goods manufactured by HUL. Considering these activities as services, both Today and Maxima had obtained service tax registrations and paid service tax on the job charges received by them. During the relevant period, Service Tax was payable if taxable services were rendered. One of the taxable services was 'business auxiliary service' which definition included 'processing of goods on behalf of a client' if that activity did not amount to manufacture. Thus, if the processing undertaking by an assessee....
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....ssued to Maxima demanding central excise duty amounting to Rs. 14,21,16,151/- along with interest for the period August 2009 to March 2010 under section 11A of the Central Excise Act, 1944 Act and further proposing to impose penalty under section 11AC of the Act read with Rule 25 of the Central Excise Rules, 2002 Rules. In this SCN, penalty was also proposed on HUL under Rule 26. The entire period of demand was within the normal period of limitation. 8. The proposals against Maxima and HUL in this SCN were dropped by the Commissioner, CGST, Dehradun by Order dated 30.4.2024 relying on the Final Order dated 12.11.2014 of this Tribunal in Excise Appeal no. 3130 of 2009 filed by M/s. Vasantham Enterprises. 9. Revenue filed Excise appeals 52198 of 2024 and 52199 of 2024 to assail this order. 10. Show Cause Notice SCN dated 9.8.2010 was issued to Today demanding central excise duty amounting to Rs. 9,59,85,119/- along with interest for the period July 2009 to March 2010 under section 11A of the Act and further proposing to impose penalty under section 11AC of the Act read with Rule 25. In this SCN, penalty was also proposed on HUL under Rule 26. The entire period of demand was ....
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....was remanded to the Commissioner allowing the assessee to cure the defects in the declaration. (x) In this case, the Maxima and Today filed proper declarations indicating the date of the declarations and the date from which they wished to avail the benefit of the notification. (xi) The Commissioner gravely erred in applying the notification even for the period when the Maxima and Today had not opted for the exemption. (x) Consequently, he erred in dropping the proposal to impose penalties on Maxima, Today and HUL (x) The impugned orders may be set aside and Revenue's appeals may be allowed. Submissions of the Respondents- Maxima, Today and HUL 14. Shri M.H. Patil, Shri Sachin Chitnis, Shri Viraj Reshamwala and Shri J.M. Sharma, learned counsels for the respondents vehemently supported the impugned orders and made the following submissions: (i) The issue is no more res integra and the declaration under notification no. 50/2003-CE is only a procedural requirement. Area based exemption notification, being a beneficial notification, must be interpreted liberally. Reliance is placed on the following decisions: (a) Vasantham Ent....
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....issioner under section 11A(1) [normal period of limitation]? (d) Should the Commissioner have imposed penalty under section 11AC on the Maxima and Today? (e) Should the Commissioner have imposed penalty on HUL under Rule 26? 16. It is undisputed that as per the statutory definition in the Chapter Note, the activity of Maxima and Today amounted to manufacture. Therefore, but for the exemption, excise duty was payable and service tax was not payable by them. 17. We now proceed to decide each of the five issues identified by us in the above paragraph. Ground of the Revenue that Maxima and Today were not located in the areas notified in 50/2003-CE 18. It is not disputed in the SCNs that Maxima and Today were located in the areas notified under notification no. 50/2003-CE. In the appeals, Revenue raised a new ground that Maxima and Today were not located in the notified areas. This ground cannot be entertained as it was not the proposal in the SCNs. Learned counsels for the respondents have also shown to us that they were located in the Khasras notified in the notification. Therefore, this ground deserves to be rejected. Entitlement of Maxima and Today t....
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....ission of the learned counsel is that the appellants were under an impression that service tax was payable and excise duty was not payable and, therefore, they had not opted for the exemption notification. 24. To examine this submission, we need to look at the declarations of the two appellants in this respect. Maxima filed the declaration on 31.3.2010 before the Deputy Commissioner opting for this notification retrospectively from 15.3.2010. Today filed a declaration on 31.3.2010 before the Deputy Commissioner opting for this notification retrospectively from 30.3.2010. To this extent, we are inclined to give the appellants the benefit of doubt and accept the date from which the notification would apply as per the declaration; in case of Maxima it is 15.3.2010 (although the declaration was submitted on 31.3.2010) and in case of Today it is 30.3.2010 (although the declaration was submitted on 31.3.2010). Consequently, of the demand in the SCN issued to Maxima (for the period August 2009 to March 2010), the demand can be confirmed only upto 14.3.2010. Of the demand in the SCN issued to Today (for the period July 2009 to March 2010), the demand can be confirmed only up to 29.3.201....
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.... was payable. Therefore, we find no grounds whatsoever to impose any penalty under section 11AC. Penalty under section Rule 26 on HUL 31. The proposals in the SCN was to impose penalty on HUL under Rule 26. It reads as follows: RULE 26. Penalty for certain offences. - (1)] Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater. Provided that where any proceeding for the person liable to pay duty have been concluded under clause (a) or clause (d) of sub-section (1) of section 11AC of the Act in respect of duty, interest and penalty, all proceedings in respect of penalty against other persons, if any, in the said proceedings shall also be deemed to be concluded. (2) Any person, who issues - (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invo....