Pradeep Jain - Chartered Accountant

PJ/Case laws/07-08/06

PJ/Case laws/07-08/06 Date: 29-02-2008

CASE LAWS

1.) The Appellant M/s Chattisgarh Electricity Co. Ltd. used to avail the Service Tax Credit on GTA on the basis of TR-6 challan prior to 15-6-2005. The Revenue objected the assessee for availment of the Credit on the ground that the challan is not a specified document for availment of Credit till 15.06.2007. It was added in the list of specified documents under Rule 9 of Cenvat credit Rules, 2004 from 15.06.2007. The Learned Commissioner (Appeals) allowed the appeal in the favour of the assessee on the ground of the decision made in the case CCE, Goa Vs. M/s. Essel Pro-Pack Ltd. Under the said decision it was held by the Commissioner (Appeals) that as no document was specified for the availment of Credit during the relevant time hence TR-6 Challan has to be considered as the proper document reflecting payment of duty.

[2008-TIOL-72-CESTAT-DEL]

2.) The Respondent M/s Ultra Cement Ltd. are a manufacture of Cement. The respondents purchased some inputs but being obsolete it write off the same from the Books of Accounts. The Revenue argued the Assessee to pay duty on such goods which have been written off. The appellant contended on the argument of the Revenue that such goods were written off from the Books of Accounts as these were obsolete but these were physically present in the factory premises and part of these inputs were used subsequently in the process. The Ld. Commissioner (Appeals) allowed the Cenvat Credit to the Respondent and Rejected the Revenue’s Appeal on the following grounds:-

Writing off the value from inventory is only for the purpose of Books of Accounts, and there is no contrary evidence produced that the inputs are not available in the factory premises and further more there is no evidence that the said goods will not be used in future.

[2008-TIOL-105-CESTAT-MUM]

3.) The respondent M/s Indian Hume Pope Co. Ltd. used common inputs for the manufacture of Exempted goods as well as Dutiable goods. The Assessee followed the process of reversing the Cenvat Credit on such common input in a proportionate manner. The Revenue argued the assessee on the ground that it has to follow Rule 6 of the Cenvat Credit Rules wherein it has to pay/reverse 10% of the amount of the Credit availed on the common input. The Commissioner (Appeals) rejected the appeal of the Revenue on the basis of the decision made by Supreme Court of India in Bombay Dyeing case wherein the Supreme Court held that proportionate reversal of Cenvat Credit amounts to non availment of Cenvat Credit.

[2008-TIOL-41-CESTAT- MUM]

4.) The respondent M/s Positive Packaging Industries Ltd. are the manufacturer of Flexible Packing Material for which they use the Printing Cylinders of Specific Design as per the requirement of the respective Customer. These Cylinders need to be re-engraved as continuous use wears them. The Respondent send these Cylinders for re-engraving them under Rule 57F of Central Excise Rules, 1944. The Adjudicating Authority held that the provisions of Rule 57S (2) will be applicable in this case and respondent is required to pay the duty on the Cylinders removed for re-engraving. The Ld. Commissioner (Appeals) rejected the Appeal of the Revenue on the ground that the Re-engraving does not amount to manufacture and Rule 57 F refers to the removal of Capital goods for test, repairs or re-conditioning. Hence, the removal of Cylinders by the Respondent were according to law as provided under Rule 57F.

[2008-TIOL-47-CESTAT-MUM]

5.) The Appellant Pepsico India Holdings Pvt. Ltd. Availed Credit on Furnace oil used in the manufacture of both dutiable and Exempted goods. The Revenue demanded an amount equivalent to the 10% of the sale price, as this was a case of use of common inputs for both dutiable and exempted goods. The Assessee reversed the entire credit availed on Furnace oil. The adjudicating authorities held that the reversal of Cenvat Credit taken on the Common Input amounts to non-availment of Cenvat Credit hence the Revenues demand for the 10% of the amount under Rule 6(3)(b) is set aside and the appeal is allowed.

[2008-TIOL-59-CESTAT-MAD]

6.) The respondent M/s J L Morison (I) Ltd. Purchased some inputs from the manufacturer. The said inputs were found to be of inferior quality. Hence, the respondent raised Debit Notes for the inferior quality of the material supplied which resulted in the reduction of the value paid by the respondent to the supplier. The Revenue contended that the Modvat Credit has also to be proportionately reduced to that extent. The Ld. Commissioner (Appeals) rejected the appeal of the Revenue on the fact that reduction of the price payable by the respondent due to quality difference is a commercial transaction between him and his supplier. Moreover, the Central Excise Duty paid on the transaction value by the supplier to the respondent was never disputed and there is also no claim of refund of duty by the supplier. Hence there is no need by the respondent to proportionately reduce the Modvat Credit amount.

[2008-TIOL-195-CESTAT-MUM]

7.) The appellant Gillooram Gourishankar filed a claim for the refund of unutilized duty Credit on inputs used in the export product. Lower authorities disallowed the refund claim on the ground that refund claim was filed beyond six months from date of export. The refund made by the assessee was in terms of Notification No. 85/87-C.E., dated 1-3-87 which provided that refund of claim are to be submitted not more than once in a calendar year and moreover only when the exporter is not in a position to utilize credit. There is no question of time limit of Six months applicable and hence the Commissioner (Appeals) allowed the Assessees appeal.

[2007 (213) E.L.T. 528 (Tri.-Kolkata)]

8.) The appellant M/s Malbros Stone Exports is a 100% EOU engaged in the processing of Sand Stone into Slate and Tiles and exporting them. It used to claim and obtain refund of the service tax so paid, upon export of slate and tiles under Rule 5 of Cenvat Credit Rules. The appellate authority allowed the appeal to the assessee on the ground that as per Rule 5 refund of input service tax is available, irrespective of whether input material or service is used in the manufacture of the exported excisable goods or used in the intermediate products cleared for export. Hence irrespective of the dutiability of slate and tiles produced from service tax paid input, refund is allowed upon the export of the material.

[2007-TIOL-1282-CESTAT-DEL]

9.) The respondent Birla VXL Ltd. imported woolen Fabrics under Duty Exemption Scheme and Sought permission to send the Fabrics to job worker for conversion of fabrics into Suits for export. The Suits manufactured were partly exported after bringing the same to the assessee’s factory and the remaining were directly exported from the job worker premises. The Revenue levied the duty on the fabrics used in the suits exported from job worker premises on the ground that the assessee was required to bring the same to its own factory before its export. The respondent contended the view of the revenue on the findings that shipping bills evidenced their export and the Customs Authorities duly verified the said documents. The appellate authority dismissed the Revenues appeal on the ground that the export by the assessee was duly cross checked by the Customs authorities and discharge of export obligation by the assessee was beyond doubt.

[2008 (222) E.L.T. 507 (P&H)]

10.) The appellant RUMI Herbals (P) Ltd. are an SSI unit manufacturing and selling Ayurvedic Drugs. The appellants products were sold through a network of dealers located across the country. M/s RUMI level marketing co. (RMLM) sold RUMI’s products in the Southern states.

RMLM and RUMI had one common director. Moreover RMLM received the products of the assessee at a lower price compared to the other dealers of the assessee. The Revenue thus found that RUMI and RMLM were related persons and the assessee suppressed this fact. The revenue considering the sale price of RMLM as base calculated the assessable value of RUMI and come to the conclusion that the same exceeded the SSI limit and held the assessee liable to pay the duty.

In this appeal the assessee contended the view of the Revenue on the ground that having a common director did not make them related persons for the purpose of Section 4 of CEA, 1944. Moreover, they argued that RMLM had a separate class of buyers as compared to other buyers and also no evidence is to prove that there was a financial flow back between them.

The Commissioner (Appeals) on the merit of the facts presented by the assessee allowed the appeal in his favour.

[2008 (222) E.L.T. 518 (Tri. Chennai)]

Preapred by

FCA, Pradeep Jain

Siddharth Rutiya

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PJ/Case laws/07-08/06

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