Concessional rate of excise duty on final products is available on the condition that no credit of duty paid on inputs used in the manufacture of goods was taken under the CENVAT Credit Rules. Manufacturer availed CENVAT credit on inputs used in the intermediate products, cleared captively for use in the manufacture of final products. As intermediate product consumed captively were exempted, the assessee paid 8% of the value of intermediate products in as much as they have taken Cenvat credit on common inputs but have not maintained separate accounts.
It cannot be held that the intermediate products are not excisable goods and that they are not exempted. As the manufactuere have not taken credit on other inputs used in the final products, the condition of notification has been fulfilled.
Sunday, March 8, 2009
Discount
Documentary evidence for discount prevailing at the time of removal of goods can be produced even before Commissioner (Appeal)
Commissioner (Appeals) has inherent powers to remand the case in appeal to the original authority. Refer MIL India Ltd. vs. CCE, Noida [2007 (210) ELT 188 (SC)].
Commissioner (Appeals) has inherent powers to remand the case in appeal to the original authority. Refer MIL India Ltd. vs. CCE, Noida [2007 (210) ELT 188 (SC)].
Saturday, March 7, 2009
Blending of MS & HSD with additives
whether blending of duty paid branded motor spirit (MS) and duty paid branded HSD with multifunctional additives would amount to manufacture under the Central Excise Act, 1944.
The process of treatment to enhance the marketability of a product or to improve the value addition does not amount to manufacture. Hon ble Supreme Court in the case of CCE v. Sudarshan Chemical Industries (Supra) and Tribunal in the case of Lakme Lever Ltd. vs. CCE and CCE v. Mysore Ammonia Pvt. Ltd., and Hindustan Petroleum Corporation Ltd. vs. CCE, [2009 (162) ECR 0016 (Tri-New Delhi) held, that a process or treatment to enhance the marketability of a product or improve the value addition does not amount to manufacture.
The MS and HSD after being blended with small quantity of MFAs remain MS and HSD only, conforming to ISI specifications IS:2796 -2000 and IS: 1460 -2000 respectively. Hence, just because blending improves their quality and after blending they are sold under different brandnames, they do not become products different from unblended MS/ HSD, with different characteristics and usages.
The Tribunal held that blending of duty paid branded motor spirit (MS) and duty paid branded HSD with multifunctional additives does not amount to manufacture under the Central Excise Act, 1944
The process of treatment to enhance the marketability of a product or to improve the value addition does not amount to manufacture. Hon ble Supreme Court in the case of CCE v. Sudarshan Chemical Industries (Supra) and Tribunal in the case of Lakme Lever Ltd. vs. CCE and CCE v. Mysore Ammonia Pvt. Ltd., and Hindustan Petroleum Corporation Ltd. vs. CCE, [2009 (162) ECR 0016 (Tri-New Delhi) held, that a process or treatment to enhance the marketability of a product or improve the value addition does not amount to manufacture.
The MS and HSD after being blended with small quantity of MFAs remain MS and HSD only, conforming to ISI specifications IS:2796 -2000 and IS: 1460 -2000 respectively. Hence, just because blending improves their quality and after blending they are sold under different brandnames, they do not become products different from unblended MS/ HSD, with different characteristics and usages.
The Tribunal held that blending of duty paid branded motor spirit (MS) and duty paid branded HSD with multifunctional additives does not amount to manufacture under the Central Excise Act, 1944
Buyer paying duty under protest
Buyer, a manufacture of Fertilizers i.e. Ammonia & Urea of naptha applied for registration under Rule 192 of the erstwhile Central Excise Rules, 1944 to procure Naptha for use in the manufacture of Fertilizers without payment of duty under notification No. 75/84-CE dated 1.3.84. The Asst. Commissioner of Central Excise rejected the application to issue CT-2 certificate for procuring duty free Raw Naptha. Buyer procured naptha on payment of duty under protest and filed appeal before the Commissioner (Appeals.) who held that the buyer are eligible to avail the benefit of exemption notification and to procure duty free Raw Naptha under CT-2 certificate under Chapter 10 procedure of the erstwhile Rules.
Refund claim of duty paid on naptha filed by the buyer was rejected on the grond that that refund is barred by limitation as refund claim is to be filed as provided under clause (B)(e) of Explanation to Section 11B of Central Excise Act, 1944 and as the buyer has not paid duty, notion of the payment of duty under protest is misplaced.
The Tribunal held that filing of appeal by the appellant has to be treated as protest, especially when there is no separate provision in the law to file protest by the buyer of the good.
The tribunal further held that the claim of the appellant for refund of excess duty paid is as a consequence of passing of the appellate order in their favour and is basically implementation of the order of the Commissioner (Appeals). The success of their appeal is not an empty formality and the appellate order is required to be implemented, as a result of which CT-2 certificate is required to be issued right from the date of their first claim and the benefit of concessional rate has to be extended from that date onwards.
The Tribunal also held that the buyer cannot be treated as purchaser as mentioned in clause (e) of Explanation (B) of Section 11B(5) of the Act but would come within the purview of Second proviso to Section 11B(1) of the Act.
Refund claim of duty paid on naptha filed by the buyer was rejected on the grond that that refund is barred by limitation as refund claim is to be filed as provided under clause (B)(e) of Explanation to Section 11B of Central Excise Act, 1944 and as the buyer has not paid duty, notion of the payment of duty under protest is misplaced.
The Tribunal held that filing of appeal by the appellant has to be treated as protest, especially when there is no separate provision in the law to file protest by the buyer of the good.
The tribunal further held that the claim of the appellant for refund of excess duty paid is as a consequence of passing of the appellate order in their favour and is basically implementation of the order of the Commissioner (Appeals). The success of their appeal is not an empty formality and the appellate order is required to be implemented, as a result of which CT-2 certificate is required to be issued right from the date of their first claim and the benefit of concessional rate has to be extended from that date onwards.
The Tribunal also held that the buyer cannot be treated as purchaser as mentioned in clause (e) of Explanation (B) of Section 11B(5) of the Act but would come within the purview of Second proviso to Section 11B(1) of the Act.
Natural Justice
Failure to grant extension of the personal hearing with sufficient time, even though the law provides three adjournments during the proceeding, is clear cut violation of the principles of natural justice.
Undervaluation of goods
The importer has imported 18 consignments of plastic sheets over a period of three yeras. On investigation, documents evidencing gross undervaluation of sheets in respect of 8 consignments were found. Based on the gathered evidence, undervaluation in the case of other imports were also alleged and confimed.
The Tribunal held that as regards to balance 10 consignments, case has been made on the basis of conjectures on the ground that once under valuation was resorted to in respect of the 8 consignments the same must have been resorted to in respect of earlier consignments also. This was not acceptable as the two periods were different. There was not a single iota of evidence in respect of these consignments. The entire enquiry was limited to 8 consignments only. There was no reference to any contemporaneous imports during the relevant period nor any assertion that the international price remained the same during both the periods.
The Tribunal held that duty cannot be demanded on the basis of the presumptions and conjectures in the absence of any evidence of any nature.
The Tribunal held that as regards to balance 10 consignments, case has been made on the basis of conjectures on the ground that once under valuation was resorted to in respect of the 8 consignments the same must have been resorted to in respect of earlier consignments also. This was not acceptable as the two periods were different. There was not a single iota of evidence in respect of these consignments. The entire enquiry was limited to 8 consignments only. There was no reference to any contemporaneous imports during the relevant period nor any assertion that the international price remained the same during both the periods.
The Tribunal held that duty cannot be demanded on the basis of the presumptions and conjectures in the absence of any evidence of any nature.
Undervaluation of goods
The importer has imported 18 consignments of plastic sheets over a period of three yeras. On investigation, documents evidencing gross undervaluation of sheets in respect of 8 consignments were found. Based on the gathered evidence, undervaluation in the case of other imports were also alleged and confimed.
The Tribunal held that as regards to balance 10 consignments, case has been made on the basis of conjectures on the ground that once under valuation was resorted to in respect of the 8 consignments the same must have been resorted to in respect of earlier consignments also. This was not acceptable as the two periods were different. There was not a single iota of evidence in respect of these consignments. The entire enquiry was limited to 8 consignments only. There was no reference to any contemporaneous imports during the relevant period nor any assertion that the international price remained the same during both the periods.
The Tribunal held that duty cannot be demanded on the basis of the presumptions and conjectures in the absence of any evidence of any nature.
The Tribunal held that as regards to balance 10 consignments, case has been made on the basis of conjectures on the ground that once under valuation was resorted to in respect of the 8 consignments the same must have been resorted to in respect of earlier consignments also. This was not acceptable as the two periods were different. There was not a single iota of evidence in respect of these consignments. The entire enquiry was limited to 8 consignments only. There was no reference to any contemporaneous imports during the relevant period nor any assertion that the international price remained the same during both the periods.
The Tribunal held that duty cannot be demanded on the basis of the presumptions and conjectures in the absence of any evidence of any nature.
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