Revenue Neutrality Not Applicable To Non-Reversal Of SAD Credit In Inter-Unit Transfers: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), on 5 May upheld the demand of duty, interest and penalty against Thermo Fisher Scientific India Pvt. Ltd. for failure to reverse the Special Additional Duty (SAD) component of CENVAT credit while transferring inputs “as such” between its units, holding that the plea of revenue neutrality is not applicable in such cases. A Bench comprising Judicial Member Dr. Suvendu Kumar Pati observed that the assessee's...

Sugar Syrup Used In Biscuit Manufacturing Not Marketable, No Excise Duty Payable: CESTAT Hyderabad

The Hyderabad Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 4 May held that sugar syrup prepared and used captively in the manufacture of biscuits is not marketable in the form in which it emerges and is therefore not eligible for central excise duty. The Bench comprising Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed the appeals filed by Sumo Foods Pvt. Ltd. and set aside the demand confirmed by the Department. It observed: “the sugar syrup...

Waste Mud From Refining Process Not Liable To Excise Duty: CESTAT Hyderabad

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that “waste mud” (spent earth) generated during the refining of crude palm oil is not an excisable product under Section 2(d) of the Central Excise Act and is therefore not liable to Central Excise duty. A Division Bench comprising Technical Member A.K. Jyotishi and Judicial Member Angad Prasad set aside the duty demand and held that the adjudication rested on an invalid circular. The Tribunal ruled...

Telangana High Court Upholds Rejection of Excise Settlement Plea for Lack of Full and True Duty Disclosure

The Telangana High Court has dismissed a writ petition filed by Airan Comtrax Towers Pvt. Ltd., upholding the rejection of its settlement application on the ground that it failed to make a full and true disclosure of its duty liability. A Division Bench of Justice P. Sam Koshy and Justice Narsing Rao Nandikonda was dealing with a challenge to the order dated February 28, 2008 passed by the Settlement Commission. The case arose from a show cause notice dated April 4, 2005 alleging clandestine...

CESTAT Chennai Orders Refund Of Excise Duty On Revised Price Not Accepted By Buyer

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that excise duty paid on a higher price claimed through supplementary invoices cannot be sustained where the buyer never accepted that price. “The contemporaneous letter dated 13.07.2015 issued by the buyer clearly establishes that the supplementary invoice was not accepted, the amount was not accounted in the books and no CENVAT credit was availed. Thus, the revised value never crystallized into a transaction...

Revenue Cannot Demand Interest On Delayed Duties Yet Deny It On Refund: Telangana High Court

The Telangana High Court recently held that the Revenue is bound to compensate a taxpayer for amounts wrongfully collected and retained as interest on alleged central excise duty liability arising from a customs notification, even where such amounts were recovered under an amnesty scheme. The court said, “the Revenue cannot act in contradicting ways, i.e., on one hand demanding interest from the assessee for the delay in payment of duties and on other hand refusing to pay interest on the amount...

CESTAT Sets Aside ₹3.63 Crore CENVAT Credit Demand Against India Cements Over Imported Coal

In a relief to cement major The India Cements Ltd., the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai has set aside a Rs.3.63 crore CENVAT credit demand along with interest and penalty, holding that credit cannot be denied merely because Countervailing Duty (CVD) was paid at concessional rates on imported steam coal.A Chennai bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao allowed the company's appeal against an Order-in-Original dated...

Excise Act | Statements Recorded During Probe Not Admissible Without Following Mandatory Procedure: CESTAT Delhi

The Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi, has held that statements recorded during investigation (Section 14) under the Central Excise Act cannot be relied upon unless the mandatory procedure governing their admissibility (Section 9D) is followed, and any penalty based solely on such statements is unsustainableSection 14 of the Central Excise Act, 1944, empowers authorized Central Excise Officers to summon any person to give evidence or produce...

CESTAT Chennai Allows ₹84 Lakh CENVAT Credit Claim By Komatsu India For Factory Expansion

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that Komatsu India Pvt. Ltd. was entitled to claim tax credit worth Rs 84.08 lakh on services used to expand its factory. A coram of Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao noted that the company, which manufactures dump trucks, had added a new facility next to its existing plant to produce hydraulic excavators. While expanding the plant, the company took credit for taxes paid on...

Only Input Credit Used For Both Taxable and Exempt Activities Must Be Reversed: CESTAT Chennai

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) at Chennai has held that while reversing CENVAT credit under Rule 6(3A) of the CENVAT Credit Rules, 2004, only common credit used for both taxable and exempted activities needs to be considered and not credit used exclusively for dutiable goods. The tribunal set aside the demands, interest, and penalties against Tamil Nadu Newsprint and Papers Ltd.Rule 6(3A) of the CENVAT Credit Rules, 2004, provides a formula-based, actionable...

Freight, Insurance Includable In Assessable Value For Excise Duty If Delivery at Buyer's Premises: CESTAT Ahmedabad

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, has held that freight and insurance charges are includable in the assessable value for excise duty where goods are delivered at the buyer's premises and not at the factory gate, thereby upholding the demand of duty, interest, and penalty. Referring to Section 4 of the Central Excise Act, 1944, the tribunal observed, "Above provisions clearly indicate that when excisable goods are not sold at the factory gate but...

Excise Duty Recovery During Stay On Demand Treated As 'Under Protest'; Refund Not Time-Barred: Madras HC

The Madras High Court has held that where the Department appropriates amounts during the pendency of an appeal against a Excise duty demand despite a subsisting stay order, such amounts must be treated as paid under protest, and a refund cannot be denied on the ground of limitation.The bench stated that "If the revenue is permitted to adopt such novel ways to adjust the amounts by getting over an order of stay and thereby indirectly recovering the money, it cannot be construed as a duty payable...