Pradeep Jain - Chartered Accountant

PJ/Case Laws/07-08/02

1. Exemption – Even if an applicant does not claim benefit under a particular notification at initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage – Section 25 of Customs Act, 1962.

Exemption – Option to choose – If applicant is entitled to benefit under two different Notifications or under two different heads, he can claim more benefit and it is duty of authorities to grant such benefits if applicant is entitled to such benefit – Section 25 of Customs Act, 1962.

[2007 (209) E.L.T. 321 (S.C.)]

2. No allegation made by Department that transaction was tainted – No evidence before department to show that price was pegged at a lower level on account of circumstances mentioned in Rule 4(2) ibid – No allegation that on account of discounts price stood pegged at a lower level – No finding that buyer and seller are related – No finding that exporter has not followed accounting system of that country. Even if Rule 7A ibid was to be applied, which is not attracted, still computation made under Rule 7A ibid by Assistant Commissioner was erroneous.

[2007 (209) E.L.T. 326 (S.C.)]

3. Department’s plea that FOB value being 450% more than purchase value is unreasonable, not acceptable for want of evidence to support such a contention

[2007 (209) E.L.T. 331 (S.C.)]

4. Territorial jurisdiction of High Court. Significant part of cause of action cannot be said to arise within the territorial jurisdiction of High Court at Delhi merely because the impugned order has been passed by a Tribunal located within its territorial jurisdiction, when the events leading to the filing of the proceedings before such Tribunal, and the parties to such proceedings, are outside the territorial jurisdiction of the Court.

[2007 (209) E.L.T. 343 (Del.)]

5. Decision of co-ordinate Bench is binding - Merely because some arguable point is raised, binding precedent cannot be ignored.

[2007 (209) E.L.T. 347 (Bom.)]

6. Penalty – Petitioner not entitled for any relief merely because the export obligation was fulfilled value wise when the same not fulfilled by weight.

[2007 (209) E.L.T. 350 (Del.)]

7. Goods returned to factory under bond for home consumption when not exported.

[2007 (209) E.L.T. 366 (Tri. – Ahmd.)]

8. Drawback claim is less than PMV, hence not deniable.

[2007 (209) E.L.T. 371 (Tri. – Mumbai)]

9. Revenue failed to establish that appellant abetted and has instigated or participated in commission of an offence.

[2007 (209) E.L.T. 376 (Tri. – Bang.)]

10. Price of imported goods vary from place to place and time to time – Comparison without regard to country of export, supplier and time of import not appropriate or dependable.

[2007 (209) E.L.T. 378 (Tri. – Ahmd.)]

11. Different wings of Government should work in unison and harmony instead of moving at opposite directions.

[2007 (209) E.L.T. 379 (Tri. – Bang.)]

12. Date of payment when inputs capital goods cleared as such under Rule 3(4) of Cenvat Credit Rules, 2002. Duty required to be paid on monthly basis under Rule 8 of Central Excise Rules, 2002.

[2007 (209) E.L.T. 389 (Tri. - Mumbai)]

13. Non – entry of goods in RG – 1 register – Mere non – entry in RG 1 register will not amount to non – Accountal of goods unless it is supported by past conduct of assessee in removing goods or that raw materials used in manufacture of finished goods have not been accounted for or goods have not been shown to be under process in either statutory or private records.

[2007 (209) E.L.T. 390 (Tri. - Ahmd)]

14. Drawing of wires being not amounting to manufacture of excisable goods during relevant period, such wires not termed as exempted form excise duty or cleared at nil rate of duty to be covered under mischief of Rule 6(2) and or Rule 6(3) of Cenvat Credit Rules, 2002. Appellant having acted under bona fide belief and clearances being effected after due intimation of Deputy Commissioner, mis-statement of facts or suppression of material not proved.

[2007 (209) E.L.T. 392 (Tri. - Mumbai)]

15. Ground – same neither discussed in order of Commissioner nor brought to notice of Tribunal, even in ROM hearings – Ground found unsustainable. Dispute about nature of goods, it was not about rate of duty, dispute was not outside jurisdiction of single member.

[2007 (209) E.L.T. 399 (Tri. - Mumbai)]

16. Clandestine manufacture and removal. Mere admission by Manager not sufficient in absence of any corroborative evidence. Demand and penalty not sustainable.

[2007 (209) E.L.T. 400 (Tri .- Mumbai)]

17. There was technical violation as sale was on high sea sale basis and not through STC – If STC had paid duty, it would have been reimbursed to them. Margin of profit as compared to other importers was wiped out as before date of import, goods could be procured freely on high sea. Confiscation upheld and redemption fine reduce.

[2007 (209) E.L.T. 403 (Tri. - Mumbai)]

18. This was not repackaging from bulk to smaller pack but was from standard to smaller pack, which did not amount to manufacture under Note 10 to Chapter 28 of Central Excise Tariff.

[2007 (209) E.L.T. 406 (Tri. - Kolkata)]

19. Appeal to Supreme Court – Admission thereof – It will not itself amount to stay if it was accompanied by rejection of stay.

[2007 (209) E.L.T. 408 (Tri. - Mumbai)]

20. Modus operandi confirmed by excise clerk, other employees and partner of firm – HELD: Manipulation of documents and collusion between processor and merchant manufacturer with intention to evade duty.

[2007 (209) E.L.T. 410 (Tri – Mumbai)]

21. Fact that they were entered in RG – 1 register without remark of their being sub-standard, found to be irrelevant especially as there was no evidence of flow back of money from customers.

[2007 (209) E.L.T. 416 (Tri. - Ahmd)]

22. Technical know how fees and royalty paid to foreign company under technical know how agreement. No restraining clause on importers in India to import capital goods from third party in said agreement under which technical know how for manufacture of mould bases and ejector pins is entered into technical know how and royalty not includible in assessable value of second hand capital goods.

[2007 (209) E.L.T. 419 (Tri – Mumbai)]

23. Non fulfillment of export obligation. Plea of appellant that she ceased to be a Director of the company at the time of issue of show cause notice, does not in any way absolve her, as she was a director of company during the period when offence was committed.

[2007 (209) E.L.T. 420 (Tri – Mumbai)]

24. Goods affixed with brand name ‘Vijay’ written in a particular style within a pentagon – Style adopted is sufficient to call it a brand name to bring it in the bar in SSI notification.

[2007 (209) E.L.T. 423 (Tri – Mumbai)]

25. Liability to pay interest under section 11AB arose even in cases where duty was paid before issuance of show cause notice. Notice to pay interest under section 11AB ibid cannot be tested on anvil of period of limitation prescribed under section 11A ibid in the context of show cause notice for recovery of duty etc. – No period of limitation prescribed for effecting recovery of interest under section 11aB ibid, nor any period of limitation prescribed for exercising power to recover sums due to Government under section 11 ibid.

[2007 (209) E.L.T. 425 (Tri – Del.]

26. Grey fabrics processed by appellants not dutiable at the hands of appellant – failure to enter in books of account is only a procedural lapse. Penalty – Co. – accused cannot be visited with any higher penal consequences than main accused.

[2007 (209) E.L.T. 437 (Tri – Ahmd)]

27. Cenvat/Modvat – Jack and tool kit for motorcars. Department view that they were not inputs eligible for credit of duty for cars inspite of their supply being mandatory found to be correct as Central Excise Law was a Central Law applicable throughout India and could not be made to suit different provisions of state laws.

[2007 (209) E.L.T. 439 (Tri – Mumbai)]

28. I.C. engine captively consumed for manufacture of pumps, which were cleared by claiming exemption. Final product was I.C. engines and reversal of 8% was to be on its value and not on pumps.

[2007 (209) E.L.T. 441 (Tri – Mumbai)]

29. Clandestine removal – Inputs with Modvat Credit availed - Sent to other units/job worker for processing - Same found to be common practice and allowed under various statutory rules – Full account of goods and alleged discre[amncies explained by assessee. HELD: Charge was not proved.

Production – It is to be recorded in statutory books at end of day or beginning of next day – There is nothing abnormal in few inputs not finding entry in the books - Rule 10 of Central Excise Rules, 2002.

[2007 (209) E.L.T. 443 (Tri – Ahmd)]

30. Initially, payment by debit from Cenvat Credit, and not form PLA, On pressure from Department, later on payment made from PLA and Cenvat Credit entries corrected – Contention about bond fide belief upheld, and held that no interest could be imposed for late payment from PLA – Rule 8 of Central Excise Rules, 2002.

[2007 (209) E.L.T. 445 (Tri – Ahmd)]

31. Loss of goods on account of probable theft by workers in respondent factory was intimated to the revenue.

[2007 (209) E.L.T. 446 (Tri – Mumbai)]

32. Excess stock of raw material found in 100% export oriented unit (EOU). Confiscation of goods and penalty sustainable.

[2007 (209) E.L.T. 449 (Tri – Ahmd)]

33. Waste and scrap generated out of Modvatable capital goods – Appellant’s contention that such waste and scrap cannot be considered as having been manufactured by them not accepted.

[2007 (209) E.L.T. 452 (Tri – Mumbai)]

34. Raw material, prima facie, diverted to local market as such – Prima facie merits of case also not in favour of applicant, there being material on record in form of admissions of officers of the EOU themselves as well as other evidence.

[2007 (209) E.L.T. 453 (Tri – Ahmd)]

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PJ/Case Laws/07-08/02

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