Cestat Ruling

CESTAT RULING 2012-TIOL-1974-CESTAT-DEL-LB M/s Burn Standard Co Ltd Vs CCE (Dated : July 25, 2012) PSU – Government Disputes – clearance by Committee on Disputes – Past cases not to be reopened : The decision taken by the Committee of Disputes is not undone and has not become a nullity. If the contention of the Revenue is accepted, then in all cases, in which the Committee of Disputes had declined permission to prefer appeal/ legal proceedings, during the period from 1994 onwards, can now be reopened. The matters which have been considered and decided by the Committee of Disputes and permission specifically denied cannot be reopened. 2012-TIOL-1973-CESTAT-MUM Thermolab Scientific Equipments Pvt Ltd Vs CCE (Dated : August 27, 2012) CX – Rule 16 of CER, 2002 - duty paid laboratory equipment returned to the factory are completely dismantled and useable parts are salvaged and again reused in manufacture of same kind and unusable parts are cleared as scrap - department contending that activity does not amount to manufacture and insisting for reversal of the CENVAT credit taken, in terms of rule 16(2) of CER, 2002 – SCN does not lead to any conclusion that the activity undertaken by the appellant does not amount to manufacture - judgement in the case of Maruti Udyog 2002-TIOL-191-CESTAT-Del appears to be prima facie applicable to the facts of the case - appellant has made out a prima facie case in their favour – Pre-deposit waived and Stay granted: CESTAT [para 6.1] Also see analysis of the Order 2012-TIOL-1972-CESTAT-MUM M/s Sandvik Asia Pvt Ltd Vs CCE (Dated : September 20, 2012) S.4 of CEA, 1944 - Valuation - Related person - M/s Sandvik AB, Sweden is holding company of the applicant firm and M/s Sandvik AB, Sweden and the appellants are having more than 50% of the shares in M/s Walter AG Germany, which in turn holds 99.9% of shares of M/s WTIPL, the customer of the applicant - Drilling tools valued at Rs.4.56 Crores cleared by applicant to M/s WTIPL were sold by M/s WTIPL to their customers for a value of Rs.6.76 Crores - Revenue demanding duty at the sale price at which M/s WTIPL sold the goods - in view of the share holding pattern prima facie the dealing cannot be said to be arms length - Pre-deposit ordered: CESTAT [paras 6 & 7] 2012-TIOL-1971-CESTAT-DEL Shilpi Cable Technologies Ltd Vs CCE (Dated : March 20, 2012) Central Excise – Stay / Pre-deposit of Duty – CENVAT – Appellant is manufacturer of RF Feeder cable - Denied CENVAT on cable assembly accessories, which were imported and supplied along with RF Feeder Cable – The plea of the appellant is that cable assembly accessories fall within the definition of 'input' and the Department ought not have denied credit on such accessories – Held that - There is nothing on record to suggest that the customer placed purchase order for feeder cable with the condition that they should be supplied with cable assembly accessories - Prima facie, it cannot be said that supply of cable assembly accessories made by the appellant amount to input service with respect to the feeder cable manufactured and supplied – There is no prima facie case granting input credit to th e appellant – Ordered for pre- deposit of entire demand confirmed (Para 7). 2012-TIOL-1970-CESTAT-KOL M/s National Plywood Industries Ltd Vs CCE & ST (Dated : September 27, 2012) COD - Approach of the Applicant/Appellant all along is not bona fide and they are not serious in conclusion of the proceedings – applicant has filed to show sufficient cause for condonation of inordinate delay of 3187 days caused in filing the appeal before Tribunal – miscellaneous application dismissed and consequently appeal also dismissed: CESTAT [paras 12, 13 & 14] 2012-TIOL-1964-CESTAT-KOL CCE, CC & ST Vs M/s Bhusan Steel Ltd (Dated : September 5, 2012) HP Diesel Locomotive falling under Chapter 86 is an accessory to the Torpedo Ladle Car used for carrying 300 to 350 MT of molten iron from blast furnace to conarc furnace and then to pig casting machine for manufacture of Iron & Steel Products and hence entitled to CENVAT Credit: CESTAT [paras 5.1 & 5.2] Also see analysis of the Order 2012-TIOL-1963-CESTAT-DEL M/s Oswal Woolen Mills Ltd Vs CCE (Dated : May 2, 2012) Central Excise – Valuation – Clearance of excisable goods to other unit – The appellant paid excise duty as per the transaction value in terms of Rule 4 of Central Excise Valuation Rules 2000, whereas the Department was of the view that the appellant ought to have paid excise duty in terms of Rule 8 and 9 ibid - It is apparent that Rule 4 is the general Rule for valuation of the excisable goods which provides that for the purpose of excise duty, the value of the goods cleared/sold by the assessee shall be the transaction value i.e. the price at which the goods are sold to the buyer - Rule 8 and 9 are in the nature of exception to Rule 4, which deals with the transactions between the assessee and the related party or the transaction in which the assessee resorts to clearance of goods to unrelated buyers through a related party - Since in the instant case, the assessee had cleared goods on the same price to the related as well as unrelated parties, Rule 4 is applicable - The assessee had rightly paid excise duty based upon Rule 4 of Central Excise Valuation Rules, 2000 (Para 6). 2012-TIOL-1962-CESTAT-AHM M/s Ganga Rasayanie Pvt Ltd Vs CCE (Dated : May 4, 2012) Central Excise - Stay / Pre-deposit of Duty - Garoil manufactured and cleared without payment of duty for the period from 01.4.2006 to 28.9.2006 by classifying under Tariff heading 27090000 of Central Excise Tariff Act, 1985, in which rate of duty was NIL - Even if the goods were wrongly classified, if they have been accounted for in RG-1 register, whether they can be seized on the presumption that they would also be cleared without payment of duty, may not be correct - Sample of goods was sent for testing and whether the dispute in technical in nature or there was a deliberate intention to evade duty, has to be considered - The goods have been used for manufacture of other goods which were cleared on payment of duty, and entered in to RG-1 register - Prima facie, case has been made out for waiver of pre-deposit by the appellants - Pre-deposit waived (Para 3). 2012-TIOL-1958-CESTAT-AHM M/ s Polycot Knitters (Unit-II) & Shri R K Dangi Vs CCE (Dated : September 13, 2012) Central Excise - Exemption Notification - Condition of Non- availment of CENVAT - Non-reversal of CENVAT on exercising option of exemption notification - Demand of duty - The assessee on the date of opting for the exemption Notification No.30/2004- CE, has not availed any Cenvat credit on the inputs which were procured, for manufacture of final products. The credit lying in balance was availed prior to exercise of option to benefit of Notification No.30/2004-CE and was not reversed - However, it is on record that there were no inputs/semi-finished goods lying in stock as on date, when the assessee exercised the option. Hence, the Cenvat credit could not be utilized for any other purpose and has to be considered as lapsed. Benefit of notification No.30/2004-CE is allowed.(Para 6) 2012-TIOL-1953-CESTAT-MUM M/s Hyt Engg Co Pvt Ltd Vs CCE (Dated : September 05, 2012) Appellants were aware that no duty was being paid on clearances of optional accessories as the same were bought out items – since CENVAT was availed, the credit ought to have been reversed – it cannot be called a clerical error – similarly clearance of inputs to sister unit without raising any invoice or reversing CENVAT credit is a clear violation of CCR, 2004 – if the same was not noticed by Revenue, the appellant would have continued to clear without reversal of CENVAT credit – revenue neutrality not applicable as there was a clear intention to evade payment of duty on the part of the appellant – Penalties rightly confirmed by Commissioner(A) – Appeals dismissed: CESTAT [paras 6, 7, 8 & 9] Also see analysis of the Order 2012-TIOL-1952-CESTAT-BANG CCE Vs M/s Aster Teleservices (P) Ltd (Dated : July 26, 2012) Central Excise – Stay / Pre-deposit of Duty – Exemption under Notification No.108/1995-C.E dated 28.8.1995 – The plea of the appellant is that the materials sought to be procured by the assessee were not specified under aforesaid exemption notification and hence such materials could not have been procured by following the procedure laid down under the provisions of the Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 - There is a valid point in this submission of the appellants - The impugned order is prima facie unsustainable in law – Granted stay till final disposal of the appeal (Para 3). 2012-TIOL-1951-CESTAT-BANG M/s Kumar's Cotex Ltd Vs CCE (Dated : July 31, 2012) 100% EOU – Pre-deposit - Commissioner (Appeals) directed appellant to pre-deposit Rs.7.5 Lakhs and its functionaries to pre-deposit Rs.75,000/- each in terms of Section 35F of Central Excise Act – On expressing financial hardship in a modification application, Commissioner (Appeals) reduced pre-deposit to Rs.3.75 Lakh - The appellants failed to comply with the revised order - Appeal dismissed – Held that : Ordered for pre-deposit Rs.3.75 lakh so that it constitutes 50% of duty confirmed if appropriated amount of Rs.11,79,922/- is taken into consideration – Ordered to dispose of their appeal on merits without insisting further deposit by MD and Director (Para 4).

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