TaxTMI 
TaxTMI 
2026 (8) TMI 1594
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....imposition of penalty under section 11AC of the Central Excise Act, 1944. 2. M/s Eco-Care Building Products Pvt Ltd (hereinafter referred to as the respondent) have also filed Cross Objections, vide Application No. E/CROSS/30568/2019, pursuant to the appeal filed by the department. 3. The grounds of appeal, on which the department has filed the appeal, are as under: (i) Non-examination of purchase orders placed by all the major customers of the respondent. (ii) Setting aside of invocation of extended period is not proper and correct on the grounds of examination by audit. (iii) Non-imposition of penalty under section 11AC by the adjudicating authority. 4. The brief facts of the case are that the respondents are engaged in the manufacture of 'fly ash bricks' and are supplying to various customers. The department, based on certain intelligence, asked for certain information from the respondents, which was furnished by them during the period September, 2016 to September, 2017. Based on the scrutiny of such records, the department also recorded statements of Deputy Manager (Finance & Accounts) of the respondent, as also that of Managing Director. The....
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....reight charges, loading charges and computed VAT/CST to come to the conclusion that all sales are on FOR basis. He, thereafter, proceeded to examine the purchase orders as relied upon and available on record, based on which said conclusion was drawn by the department. His observation was that in most of the cases, the purchase orders indicate freight charges separately, as detailed below: Sl. No. Buyers name PO No. Date Whether freight is indicated separately Conclusion drawn on the basis of freight indication 1 East Coast Constructions 1010145/2100015166 30.11.2012 No On FOR basis 155 26.04.2013 No On FOR basis 2 Lodha 4400016445 15.12.2012 No On FOR basis 3 Manjeera Constructions 130 13.07.2012 No On FOR basis 4 Manjeera Retails Holdings 252 07.01.2013 No On FOR basis 111 14.02.2017 No On FOR basis 215 08.06.2016 No On FOR basis 5 My Home Constructions 4100004602 23.09.2013 No On FOR basis 6 OmCon 259 07.05.2016 No On FOR basis 7 Pacifica....
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....receipt at their premises, whereas, in remaining cases, it was held that it is not on FOR basis. He also took into account the judgments of Hon'ble Supreme Court in the case of CCE Vs Ispat Industries Ltd [2015 (324) ELT 670 (SC)], as also in the case of CCE, Aurangabad Vs Roofit Industries Ltd [2015 (319) ELT 221 (SC)] and thereafter, came to the conclusion that the criteria for FOR sales decided in the case of Roofit Industries Ltd (supra), were met in respect of 8 customers mentioned in Para 18 of the OIO and therefore, supplies made to such customers were to be treated as FOR basis and the respondent was required to pay excise duty on the value which is inclusive of freight from factory premises to the place of removal i.e., buyer's place. In remaining cases, he concluded that place of removal is at the factory gate only, as decided by the Apex Court in the case of Ispat Industries Ltd (supra) and as clarified by the Board in circular dt.08.06.2018. 8. Insofar as invocation of extended period is concerned, he took into account the fact that the respondents were audited twice during the notice period; once in 2013 and again in 2016 and various judgments relied upon by the res....
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....ntion to the fact that the adjudicating authority has examined only 18 purchase orders, which were relied upon documents and thereafter, based his findings thereon held that since the department did not rely upon all the purchase orders and only on sample purchase orders, the adjudicating authority was required to only go through the said documents and not beyond that. He has relied on the judgment of Hon'ble Supreme Court in the case of CCE Vs Ballarpur Industries Ltd [2007 (215) ELT 489 (SC)], wherein it was held that SCN is the foundation and nobody can travel beyond the allegations in the notice. He also pointed out that SCN itself, at para 3.2, admits that 2/3rd of the total sales are made without any purchase orders i.e., on oral order, whereas, despite this, the department made the demand on such sales also presuming that they were also FOR sales. Therefore, the adjudicating authority has rightly dropped the remaining demand, where there was no evidence as regards its being in the nature of FOR sales. On the issue of limitation, the adjudicating authority has rightly considered the repeated visit of audit team and various audit reports which, inter alia, supports his conclus....
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.... Court in the case of Roofit Industries Ltd (supra). Department based on the documents furnished by the respondents themselves, computed the differential duty presuming that all the sales are on FOR basis, whereas, the adjudicating authority examined the 18 purchase orders relied upon in the SCN to come to the conclusion that while in respect of 8 purchase orders, sales were clearly on FOR basis as the price was consolidated price inclusive of freight and therefore, it was termed as FOR sale and to that extent, demand was sustained. In respect of remaining purchase orders, since freight charges were mentioned separately and keeping in view other terms and conditions, it was held that it cannot be called an FOR sale and hence, demand to that extent cannot be sustained. He has also taken into account apart from the sample purchase orders, other relevant facts to come to the conclusion that based on the evidence on record, demand can be sustained only to the extent of Rs.15,95,107/-. While deciding whether sales are on FOR basis or otherwise, he has relied on the instructions contained in the Board circular, referred supra. He has further reduced this demand by setting aside invocatio....
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....proper by the department. Their only grievance is that he should have gone through the entire purchase orders as given in the statement of sale and not merely the 18 purchase orders, which have been referred to as sample purchase orders in the SCN. We also find force in the submission of the respondent that adjudicating authority could not have gone beyond explicit charge made out in the SCN, wherein those sample purchase orders were the relied upon documents to allege that sales were on FOR basis, whereas, on adjudication, not all were found to be on FOR basis. Therefore, we do not find any ground to interfere with the findings of the adjudicating authority on this count. 16. Insofar as the issue of limitation is concerned, we find that the department is aggrieved with the fact that adjudicating authority has only taken into account the audit visit as the basis for not sustaining invocation of extended period, whereas, there are various judgments and especially in the case of CCE, Surat-I Vs Neminath Fabrics Pvt Ltd (supra), that prior knowledge of the department cannot be a ground for not invoking extended period. We find that the respondents have vehemently opposed that it wa....