CENVAT Credit Rules Do Not Make Ownership Of Goods A Condition For Availing Credit: CESTAT Chandigarh

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the CENVAT Credit Rules do not make ownership of goods a condition for claiming CENVAT credit. It observed that CENVAT credit is attached to inputs and not to persons. The tribunal, however, ruled that a manufacturer cannot claim credit on inputs where the contractor has availed the benefit of abatement under the Works Contract (Composition Scheme), as that would result in the same tax benefit...

CESTAT Hyderabad Sets Aside Excise Demand On Unmachined Castings Used In Wind Turbines

The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside an excise duty demand against a manufacturer of unmachined castings.It held that castings specially designed and supplied for use in Wind Operated Electricity Generators (WOEGs) are eligible for excise exemption, even if they require further machining before assembly.A bench of Judicial Member Angad Prasad and Technical Member P. Anjani Kumar held that Notification No. 6/2006-CE applies to...

CESTAT Hyderabad Allows CENVAT Credit On Concessional CVD, Says Importer Free To Choose Beneficial Exemption

The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that an importer cannot be compelled to avail a particular exemption notification where more than one option is available. It ruled that the importer is free to choose the notification that is most beneficial. Applying this principle, the tribunal held that India Cements Ltd. was entitled to avail the CENVAT credit of the Countervailing Duty (CVD) paid at the concessional rate of one per cent/two...

Adjudicating Authorities Cannot Modify Final Orders After Appeal Period Expires: CESTAT Kolkata

On 8 July, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that an adjudicating authority cannot modify a rebate sanction order after the time limit to challenge the order in appeal has expired as the authority becomes functus officio after passing the order. A Bench comprising Judicial Member R. Muralidhar dismissed the appeal filed by Wacker Metroark Chemical Pvt. Ltd. against the order passed by the Commissioner (Appeals), which had rejected the...

CESTAT Mumbai Allows KSB's Concessional Duty Claim For Boiler Feed Pumps Classified As Water Pumps

On 8 July, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that boiler feed pumps and condensate extraction pumps primarily designed to handle water are eligible for concessional excise duty under Serial No. 235 of Notification No. 12/2012-CE. Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban held that such pumps are classifiable under Central Excise Tariff Item (CETI) 84137010 and not under CETI 84137095 as claimed by the Department and...

CESTAT Chandigarh Quashes ₹55 Lakh Excise Duty Demand Over Pre-1991 Duty Collections

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside an excise duty demand of ₹55 lakh against Kamal Steel Fabricators. It held that Section 11D of the Central Excise Act, which requires manufacturers to deposit with the Government excise duty collected from buyers, could not be invoked for amounts collected before the provision came into force. The tribunal observed, “Any statutory provision unless expressly stated cannot be applied...

CESTAT Mumbai Sets Aside Excise Duty Demand On Crompton Greaves, Rules Type Test Charges Not Taxable

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a Central Excise duty demand against Crompton Greaves Ltd., holding that charges recovered separately for conducting "type tests" on transformers at the request of customers cannot be included in the assessable value of the goods. A bench of Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban passed the ruling while allowing an appeal filed by Crompton Greaves Ltd. (Transformer...

CESTAT Mumbai Allows Mahindra & Mahindra's Appeals On Valuation Of Prototype Vehicles Sent For Testing

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Mahindra & Mahindra Ltd. correctly valued prototype commercial vehicles cleared to its own unit for testing on the basis of comparable goods and not at 110% of their cost of production. The tribunal held that the valuation method under Rule 8 of the Central Excise Valuation Rules, 2000, which applies where goods are used in the manufacture of another article, was not attracted on the facts of...

CESTAT Delhi Quashes Demand On Tata Bluescope Steel, Bars Recharacterisation Of Job Work As Exempt Service

On 1 July, the Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, held that job work activity already treated as “manufacture” cannot later be reclassified as an “exempted service” for the purpose of invoking Rule 6 of the CENVAT Credit Rules and raising consequential demands. A Bench of Technical Member P.V. Subba Rao allowed all three appeals filed by Tata Bluescope Steel Pvt. Ltd., set aside the orders passed by the Commissioner (Appeals), and...

Revenue Deposits Made Under Protest Cannot Be Treated As “Duty” For Limiting Interest: CESTAT Allahabad

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 25 June held that excess amounts deposited under protest during provisional assessment cannot be treated as “duty” and remain revenue deposits until a duty liability is adjudicated. Judicial Member P. K. Choudhary allowed an appeal filed by Maa Vindhyavasini Tobacco Pvt. Ltd, set aside the impugned order, and directed the Department to recalculate interest at 12% per annum from the respective dates of...

CESTAT Bangalore Grants Customs Duty Exemption To Gem Granites For Quarry Machinery Used To Produce Export Goods

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside an order denying customs and central excise duty exemptions to Gem Granites. It held that, in the facts of the case, imported capital goods used in quarry operations qualified for the exemption because the granite blocks extracted from the quarry were the basic raw material used to manufacture the export products. The bench of Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi...

Industrial Promotion Subsidy Cannot Be Added To Excise Assessable Value: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal has recently ruled that the Industrial Promotion Subsidy received by a taxpayer under the Maharashtra government's industrial incentive scheme cannot be added to the assessable value of goods for the purpose of levying Central Excise duty. A coram of Judicial Member Ajay Sharma and Technical Member M.M. Parthiban observed that the subsidy was a state incentive linked to eligible capital investment and regional industrial...