Delhi HC Upholds DGCEI Officers' Discharge In Custodial Torture Case, Rejects CCTV Evidence

On 22 May, the Delhi High Court upheld the discharge of officers of the Directorate General of Central Excise Intelligence (DGCEI) who were accused of illegally detaining, kidnapping and torturing a businessman during a central excise investigation. A Bench of Justice Amit Mahajan held that the CCTV footage relied upon by the complainant was not admissible because it did not have the required certificate under Section 65B of the Indian Evidence Act, 1872 and dismissed the revision petitions...

Madhya Pradesh High Court Denies Bail To Tobacco Trader Accused Of ₹3.32 Crore Excise Duty Evasion

The Madhya Pradesh High Court at Gwalior has recently refused bail to a tobacco trader accused of evading around ₹3.32 crore in central excise duty by allegedly concealing tobacco packing machines and illegally manufacturing tobacco products. Justice Rajesh Kumar Gupta observed that the trader's claim that one of the two machines found during the search was non-functional could not, at this stage, weaken the prosecution case. “Mere oral assertion during search proceedings that the machine was...

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...

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...

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...

Himachal Pradesh High Court Quashes Distillery Licence Cancellation Over Lack Of Independent Application of Mind

The Himachal Pradesh High Court set aside the cancellation of distillery licences, holding that the decision was influenced by an unauthorised recommendation and lacked independent application of mind. It permitted fresh adjudication by the competent authority. Justice Jyotsna Rewal Dua was dealing with a writ petition filed by a distillery licensee (Tiloksons Brewery & Distillery) challenging cancellation of its licences in Forms D-2 and L-11 under the Himachal Pradesh Excise Act, 2011.The...

Excise Appeals To High Court On Substantial Questions Of Law Maintainable After NTT Act Struck Down: Patna High Court

The Patna High Court has recently held that appeals to High Courts in central excise matters involving substantial questions of law remain maintainable after the Supreme Court struck down the National Tax Tribunal Act, 2005, which had omitted the provision providing for such appeals. The court held that “The earlier provision mentioned in Section 35G of the Central Excise Act, 1944, Section 130 of the Customs Act, 1962 (52 of 1962) as well as any other provisions of law which were omitted by...

Meghalaya High Court Strikes Down Excise Notification Cutting Liquor Retailers' Profit Margin From 20% to 15%

The Meghalaya High Court on Thursday struck down a state excise notification that reduced the maximum profit margin for liquor retailers from 20% to 15%, holding that the move unfairly burdened retailers while leaving other stakeholders unaffected, making it arbitrary and violative of Article 14.The court noted that while retailers' margins were reduced, other stakeholders such as Central Bonded Warehouses and Bonded Warehouses continued at existing margins. A coram comprising...

Rebate Cannot Be Denied On Procedural Lapses If Export Duty Payments Are Undisputed: Gujarat High Court

The Gujarat High Court on 20 February, held that a rebate of central excise duty on exported goods cannot be denied merely due to procedural lapses, such as non-submission of original ARE-1 documents, when the fact of export and payment of duty is otherwise established through supporting records. A Division Bench of Justice A. S. Supehia and Justice Pranav Trivedi allowed the writ petition filed by Ashland India Private Limited, setting aside orders that had rejected the company's rebate claim...

Madras High Court Upholds Notification Applying Excise Act Recovery Provision To Clean Environment Cess

The Madras High Court has upheld a Central Government notification applying provisions of the Central Excise Act, including those governing recovery of duties not levied or short-paid, to Clean Environment Cess. A Division Bench of Justice G. R. Swaminathan and Justice R. Kalaimathi held that the expression “levy” in the Finance Act, 2010 includes the processes of assessment and collection, allowing the government to extend recovery provisions of the Central Excise Act to the cess through...