Pradeep Jain - Chartered Accountant

PJ/Case Laws/ 2009-10/12

Case Laws

Central Excise Section:

Case: - Commissioner of C. Ex., Ahmedabad v/s Tripura Containers (P) Ltd

Citation: - 2009 (241) ELT 279 (Tri-Ahmd.)

Issue: - Whether the Cenvat credit should be taken only on receipt of material? Whether the second time reversal is required when the duty is already reversed on as such removal of goods? Whether the penalty is imposable for non following of procedure?

Brief Facts: - Respondent-assessee were engaged in the manufacture of M.S. Barrels. During October 2006 to December 2006, they purchased MS Barrels from other manufacturers, availed cenvat credit on the same and thereafter sold the goods to their buyers. Respondent paid duty equivalent to the credit availed while selling the goods. The goods were not brought in the factory but were directly diverted from manufacturer’s factory to their buyers. Department raised demand of duty by denying the credit taken by the respondents. Adjudicating Authority confirmed the demand and also imposed penalty. In appeal, the Commissioner (Appeals) held that the respondents have already paid the duty equivalent to the Cenvat credit so availed by them and as such the entire exercise was revenue neutral. Accordingly, he set aside the order of the Adjudicating Authority. Revenue has come in appeal before the Tribunal.

Reasoning of the Judgment: - The Tribunal agreed with the findings of the Commissioner (A) that the credit availed by the respondents was utilised for payment of duty on the final products. As such the credit, even if wrongly availed, stood paid back to the Revenue, when the duty was paid on the final product, which even is admitted by Revenue, they were not required to pay. As the entire situation is revenue neutral, there was no justification in confirmation of demand of Modvat credit.

The Tribunal further held that the Respondents were required to follow the procedure as laid down by CBEC for such a situation and by not following the same, there was procedural infraction to that extent. For such lapse penalty is required to be imposed in terms of Rule 27 of the Central Excise Rules which prescribes maximum penalty of Rs. 5,000/-.

Decision: - Appeal partly allowed.

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Case: - C.C.E., C. & S.T., Bhubaneswar-I v/s Paradeep Ohosphates Ltd

Citation: - 2009 (238) ELT 690 (Tri.-Kolkata)

Issue: - Whether the Commissioner (Appeal) should see the documents himself or remand the matter to lower authorities? If the lower authorities do not follow the remand order then he can accept the contention of appellant or pass the order on merit?

Brief Facts: - Respondent-assessee filed refund claim. The documentary evidence was also produced by the respondent. Adjudicating Authority rejected the claim on the ground that respondent has not produced enough evidence to show that there is no unjust enrichment. In appeal, the Commissioner (A) remanded the matter back to the Adjudicating Authority. However, the Adjudicating Authority again rejected the claim of the respondent on the same ground. In appeal to the Commissioner (A), it was held that the Adjudicating Authority had not examined the evidence produced by the Respondent and on this ground allowed the appeal of the respondent without giving a finding on merit. Department has filed appeal against the said order.

Appellant’s Contentions: - Department contended that respondents have not submitted adequate records to prove that the impugned amount has not been included in the cost of inputs and that the same has not been recovered from the buyers as selling price or from the Government as subsidy. It was also contended that the CA certificate only relied on the balance sheet and has not certified that the said amount has not been included in the cost of finished goods. They have also relied upon the judgment given in the case of Hanil Era Textiles Ltd v/s CC Ex, Raigad [2008 (225) ELT 117 (Tri.-Mum)] in which it was held that CA certificate is not sufficient to discharge the burden cast on the assessee to prove that the incidence of duty has not been passed on to the customers.

Respondent’s Contentions: - The respondents have shown the amount to be refunded as receivables from the Department in Balance Sheet records. They have produced the cost sheet submitted to the Ministry of Chemicals and Fertilizers in support of their claim that there is no unjust enrichment. They have submitted a letter from the Ministry of Chemicals and Fertilizers allowing them retention price for their finished product.

Reasoning of Judgment: - The Tribunal held that the Commissioner (A) has allowed the appeal of the respondent on peculiar reasoning. The Commissioner should have directed the Adjudicating Authority to carry out his order. Alternatively, nothing prevented him from examining the matter before him and he could have passed an order on merits in earlier proceedings as well as in the subsequent proceedings before him. Allowing the appeal on the reasoning that the Adjudicating Authority had not examined the evidence in logical manner and therefore accepted the respondent’s claim; lowers the dignity of tax administration.

On merits, The Tribunal held that the Balance Sheet records showed the amount of refund claimed as receivables from the Department. The Cost sheet included only the undisputed duty amount for calculating the cost and not the total paid to Customs including disputed excess duty. The documents showed that the cost of finished goods did not include excess duty. Their selling price to their buyers was only as per the Notification issued by Ministry of Agriculture. The letter from the Ministry of Chemicals and Fertilizers allowed them retention price for their finished product. Thus it was clear that their selling price and retention price are below the cost price excluding excise duty. In view of the above details alongwith the Cost Accountant’s Certificate and mentioning in balance sheet of the amount as receivable, it was clear that differential Excise duty has neither been passed on to buyers nor to Government of India. The grant of refund would not result in unjust enrichment. Direction given to Adjudicating Authority to pay the respondents the amount claimed as refund.

Decision: - Appeal dismissed.

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Case: - M/s Transpek Industry Ltd v/s CCE, Vadodara

Citation: - 2009-TIOL-1488-CESTAT-AHM

Issue: - Whether the receiver of inputs is liable for payment of duty when he has reasonable belief that the goods are duty paid? Whether the duty should be recovered from original manufacturer or from the person who has under bonafide belief has taken the credit?

Brief Facts: - Appellant-manufacturer procured capital goods from a registered dealer M/s NC under the cover of Central Excise invoices issued by the said dealer and availed credit of duty. The dealer had in turn purchased the goods from the manufacturer M/s NH. During investigation conducted by DGCEI, it was found that the Central Excise invoices issued by M/s NH (the manufacturer) were fake and no duty was paid by the said manufacturer on the capital goods cleared by him. Department initiated proceedings against the appellant for denial of Modvat credit to them. Lower Authorities held that appellants having failed to follow the provisions of Rule 3 and Rule 7 of the Cenvat Credit Rules, 2002/2004, which required them to take reasonable steps to ensure that the proper Central Excise Duty has been paid on the capital goods, they are liable to penalty. Order was passed demanding wrongly availed Modvat credit and interest alongwith penalty. Appellant have come in appeal before the Tribunal.

Appellant’s Contentions: - Appellant contended that they had nothing to do with the manufacturer as they had purchased the goods from the dealer under the cover of Central Excise invoices which were not fake. It was further contended that they entertained a bona fide belief that the capital goods so supplied to them would be in accordance with law. They had taken requisite reasonable steps to ensure that the duty was paid on the invoices. The registered dealer’s identity was known to them and the invoices issued by him were genuine. Therefore, they are not guilty of contravention of Rule 7. It was submitted that the manufacturer had subsequently paid the duty and in such case denial of credit was not justified.

Reasoning of Judgment: - The Tribunal found force in the contentions of the Appellant. As per Rule 7, when the goods are supplied by a person other than the manufacturer, it is sufficient if the assessee satisfies himself about the identity of such supplier, which the appellant had done. An assessee buying goods from registered dealer cannot be expected to go beyond that and examine as to whether the credit availed by such dealer is in accordance with law or not. The remedy before the Revenue was to initiate proceedings against the manufacturer who had cleared the goods under the cover of fake invoices without payment of duty. As the original manufacturer had subsequently discharged the duty, the credit cannot be denied and penalty could not be imposed. Impugned order set aside.

Decision: - Appeal allowed with consequential relief.

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Case: - M/s Tata Motors Ltd v/s Commissioner of Central Excise, Pune-I

Citation: - 2009-TIOL-1427-CESTAT-MUM

Issue: - Whether Cenvat credit shall be allowed on the inputs used by the job worker in the processing of goods received under Rule 4 (5) (a) of Cenvat Credit Rules, 2004?

Brief Facts: - M/s Fiat India Auotmobiles Pvt. Ltd (known as FIAPL) were clearing goods to Appellant for jobwork and the said goods were returned after jobwork under job work challans without payment of duty as per provisions of Rule 4 (5) (a). The inputs used in the said goods were from the on-stock of the appellant-jobworker. Appellants were availing cenvat credit on the inputs used in doing jobwork. This is an application before the Tribunal for waiver of pre-deposit and stay.

Appellant’s Contentions: - Appellants are relying upon the judgment of the Larger Bench of the Tribunal in the case of Sterlite Industries (I) Ltd v/s CCE, Pune [2005 (183) ELT 353 (Tri-LB)]. It was submitted that looking from another angle i.e. by resorting to clearances of the inputs under Rule 3 (5) to M/s FIAPL on reversal of credit taken on the said inputs, to which the appellants were entitled to. M/s FIAPL were entitled to take credit of duty reversed by the appellants and M/s F could in turn send the said inputs to the appellants under Rule 4 (5) (a).

Respondent’s Contentions: - Revenue has tried to distinguish the facts and law in M/s Sterlite Industries Case from the instant case. They have contended that the judgment given by the Supreme Court in Escorts Ltd. [2004 (171) ELT 145 (SC)] was not correctly applied in the case of M/s Sterlite Industries. It was contended that the Hon’ble Tribunal in that case has adopted an interpretation on the basis that there cannot be mechanical application of Rule 57C and also on the basis that additional paper work should be avoided. It is submitted that the interpretation adopted in that case was not in line with the pronouncements of higher forums i.e. the High Court and the Apex Court. It is well settled that provisions of the Rule have to be interpreted in the way they are written and no intendment can be adduced, even if it leads to mechanical application of the said Rules, or it leads to additional paper work. Reliance has been placed on the judgment in the case of UOI v/s Dharmendra Textile Processors [2008-TIOL-192-SC-CX-LB].

Reasoning of Judgment: - The Tribunal perused the provisions of the Cenvat Credit Rules, 2004 and concluded that from the said rules, it was clear that a manufacturer of final product can avail the Cenvat credit on inputs received and used in the factory in or in relation to the manufacture of said final product and such credit can be utilised for payment of duty on such final product cleared from his factory.

Accordingly, no credit can be allowed to the jobworker (appellant herein) for processing of goods received under Rule 4 (5) (a).

The Tribunal further held that the principles laid down by the Apex Court in Escorts case have not been applied correctly in Sterlite case. Rule cannot be given a go bye to avoid additional paper work.

The Tribunal held that in the case of Amrit Paper v/s CC, Ludhiana [2008 (12) STR 536 (SC)] it was clearly held that provisions of Rule 57C of erstwhile Central Excise Rule, 1944 provide mandatory and categorical terms for non-availability of credit on input if final product is exempt from duty or is chargeable to nil rate of duty. Since the question of payment of duty on job worked goods, as per the Rules, does not arise, Rules have clearly provided for the availment of the Cenvat Credit by the manufacturer of final product, which are cleared on payment of duties.

The Tribunal held that the appellants contention about clearance of inputs to manufacturer under Rule 3 (5) on reversal of cenvat credit and then the manufacturer can avail credit is not acceptable. There is no question of any assumptions or presumptions, as the appellants have not resorted to the facility provided under Rule 3 (5). It also strengthens the view that cenvat credit can only be taken when the resultant product is cleared on payment of duty or on reversal of the Cenvat credit. Compliance with Rules is mandatory and non compliance will result into denial of cenvat credit.

The Tribunal held that appellants have not made out an irresistible case for waiver of full amount of duties, interest and penalties. Pre-deposit of full amount ordered.

Decision: - Pre-deposit ordered.

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Case: - Pump Engineering Co. Pvt Ltd v/s CCE, Ahmedabad

Citation: - 2009 (93) RLT 855 (CESTAT-Ahmd)

Issue: - Refund application can be sanctioned on other evidences of deposit of duty. It is not essential that the original copy of TR-6 challan should be produced.

Brief Facts: - Appellant became entitled to refund of duty deposited by virtue of the order passed by the Tribunal in their case. Accordingly, they filed a refund claim. The refund claim was rejected by the authorities below on the ground that appellants were not able to produce the original TR-6 challans and the photocopies of the challan produced by them gave rise to suspicion that the same were fabricated.

Appellant’s Contentions: - Appellant have produced TR-6 challans on record and have submitted that since a long period has passed, they have only photocopies available with them.

Reasoning of Judgment: - Tribunal held that apart from the challans, the revenue would have parallel evidence to show deposition of disputed duty or penalty amount. Accordingly, impugned order is set aside and matter remanded to Adjudicating Authority to decide the claim afresh, after giving an opportunity to the appellant to produce parallel evidence. The records maintained by the Revenue would also reflect upon the fact of payment of dues by the appellant. Impugned order set aside.

Decision: - Matter remanded.

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Service Tax Section:

Case: - CCE, Chandigarh v/s M/s Bindra Tent Service & Another

Citation: - 2009-TIOL-1428-CESTAT-DEL

Issue: - Whether the income surrendered by the appellants to the Income Tax Department can be taken as the value of taxable service for charging service tax?

Brief Facts: - Respondent-assessees were engaged in providing taxable service of “pandal and shamiana service”. They surrendered certain amount to the Income Tax Department during the survey on 06.01.06. Department issued show cause notice demanding tax on the amount so surrendered by the respondents. The Adjudicating Authority confirmed the demand and also imposed penalties of equal amounts. It was held that the respondents had failed to produce any evidence regarding income of the said amount to the IT Department that the same was from other source. However, in appeal, the Commissioner (A) set aside the adjudication order. Revenue has come in appeal before the Tribunal against that order.

Appellant’s Contentions: - Revenue contended that the respondents were providing taxable service of ““pandal and shamiana service” w.e.f. 10.09.04 but had not obtained registration. The respondent surrendered the amount to the IT Department without explaining the sources of income, which implied that the said amounts were generated from “pandal and shamiana service”. It was further contended that the burden of proof was on the respondents that the amounts were not collected from the business and other sources.

Respondent’s Contentions: - Respondents re-iterated the findings of Commissioner (A). They have given explanation that the amount accumulated to earlier 6 years. They also submitted that there was no material available that the said amount related with the “pandal and shamiana service”. They had deposited the amount of tax in connection with the services along with interest, which was appropriated by the Original Authority.

Reasoning of Judgment: - The Tribunal relied upon the findings of the Commissioner (A) which had relied upon the judgment in Kipps Education Centre, Bhatinda v/s CCE, Chandigarh has held that income voluntarily disclosed before the income tax authorities which was suppressed by the party could not be added to the taxable value unless there is evidence to prove the same. The Commissioner (A) has held that the burden was on the Department to establish that the amount surrendered by the respondents to the IT authorities related to the taxable service provided during 10.09.04 to 31.03.05. The allegation of the Revenue that since appellant had no other source of income except the service provided by them is an assumption and not legally sustainable evidence. It has to be supported by evidence. But the said burden has not been discharged by the Department.

The Tribunal held that no inquiry was made in the nature of statement and otherwise. No inquiry was conducted with regard to the explanation given by the respondents. It is well settled that the demand of tax cannot be sustained on the basis of mere presumption.

Decision: - Appeals rejected. Cross Objections disposed of.

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Case: - Commissioner of Service Tax, Ahmedabad v/s Amola Holdings (P) Ltd

Citation: - [2009] 22 STT 161 (AHD-CESTAT)

Issue: -Whether reversal of Cenvat credit amounts to non taking of Cenvat credit?

Brief Facts: - Respondent-assessee was engaged in the business of providing “Commercial or Industrial Construction Service” which became taxable from 10.09.04. Notification No. 01/2006-ST dated 01.03.06 provided benefit of 67% abatement from service tax, subject to condition that Cenvat credit is not availed by the service provider on capital goods, inputs and input services. Respondent had availed the Cenvat Credit facility as well as the benefit of abatement under the said Notification. When it was pointed out to them that they cannot avail the benefit of Notification if they have availed the benefit of service tax credit on input services, respondent reversed the entire Cenvat credit and paid interest thereon. Department initiated proceedings against respondent. Adjudicating Authority passed an order by which demand was confirmed and penalties imposed. However, the Commissioner (A) in appeal set aside the penalties imposed on the respondents by relying upon the decision of the Apex Court in Chandrapur Magnet Wires (P) Ltd v/s Collector of Central Excise [1996 (81) ELT 3]. Hence, Revenue has filed this appeal.

Appellant’s Contentions: - Revenue contended that the respondents had availed cenvat credit on input services in March 2006 and once, credit was availed by them, they became ineligible for abatement @ 67% and subsequent reversal of credit is of no help. The exemption Notification has to be construed strictly and relied upon the judgment in the case Eagle Flask Industries Ltd v/s CCE [2004 (171) ELT 296] and in Noida Medicare Centre Ltd v/s Commissioner of Customs [2007 (220) ELT 230 (Trib-Delhi)]. Reliance was also placed on judgment given in CCE v/s Bombay Dyeing & Mfg Co. Ltd [2007 (215) ELT 3/10 STT 286] to support their contention that only when credit was never utilised, on reversal of the same the benefit of exemption Notification could be extended.

Respondent’s Contentions: - Respondent contended that the issue was squarely covered by the decisions given in Precot Mills Ltd v/s CCE [2006 (201) ELT 356 (Trib-Chennai)] and in Hello Minerals Water (P) Ltd v/s Union of India [2004 (174) ELT 422]. It was also submitted that the judgment given in Bombay Dyeing & Mfg Co. Ltd case. It was contended that in the said case the credit had never been utilised and based on this contention, the Hon’ble Supreme Court had made this observation. This was not the ground on the basis of which the matter was decided by the Hon’ble Supreme Court in that case. The Hon’ble Supreme Court had not considered utilization of credit or otherwise before reversal in detail and it was only an observation made on the submission of the advocate.

Reasoning of Judgment: - The Tribunal held that the decision of the Hon’ble Supreme Court in Bombay Dyeing & Mfg Co. Ltd case was not applicable in the present case. The Respondent had rightly pointed out that since the advocate submitted that the credit was never utilised and question as to whether availment of credit and subsequent reversal would disentitle the assessee from exemption was not considered by the Hon’ble Supreme Court.

The Tribunal further held that the decision given in Precot Mills Ltd was directly applicable in the present case in which it was held that appellant’s right to claim benefit of the Notification for the period first above-mentioned stood restored to them with the above payment of duty subsequently made for the period second-above-mentioned (1997-98 and 1998-99). The Tribunal further held that the decision given in the case of Hello Minerals Water (P) Ltd was also applicable in which it was held that reversal of the credit can be made even subsequent to the clearance of final products. No merits were found in Revenue’s appeal.

Decision: - Appeal rejected.

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Case: - A. Srinivas Rao v/s Commr of Cus and Central Excise

Citation: - 2009 (15) S.T.R. 745 (A.P.)

Issue: - Whether the successor of personal property of a director is also liable for arrears of revenue of company?

Brief Facts: - The petitioner had purchased personal property of one of the Directors of a company. The Company was in arrears and therefore, Revenue issued a notice to the petitioner seeking attachment of the property purchased by him from the Director. Petitioner is seeking a direction that the Revenue should not give effect to the said Notice issued to him.

Petitioner’s Contentions: - Petitioner contended that since he had knowledge that the property was liable to be auctioned for collection of dues from the company, he was a bona fide purchaser. The property purchased by him did not belong to any company but belonged to an individual. Moreover, the notice issued on 28.12.06 was served upon him on 13.01.07 and the sale was effected on 05.01.07. The said notice was bad and was liable to be struck down.

Respondent’s Contentions: - Revenue has relied upon the proviso to Section 11 of the Central Excise Act, 1944 to suggest that even purchaser of the property, which had cloud, was liable for making good the dues to the department.

Reasoning of Judgment: - Tribunal held that on perusal of the proviso to Section 11 it becomes clear that where a person from whom duty or any other sum of any kind was recoverable disposes of his business or trade in whole or in part, the subsequent owner shall be equally responsible for its payment. The Tribunal held that the said proviso applied only where the transfer was of business or trade in whole or in part. In the present case, there was no transfer of business or trade in whole or in part, but the petitioner had purchased the personal property of a director of the company. The said proviso to Section 11 was not helpful to the Revenue since the private property of a director was purchased by the petitioner bona fidely and he had no knowledge that the director had any liability on account of the arrears of the company of which he was the director. Therefore, impugned notice was not sustainable and is therefore, set aside.

Decision: - Writ Petition allowed.

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Customs Section:

Case: - Crown Milk Specialties Pvt Ltd v/s CC, New Delhi

Citation: - 2009 (93) RLT 881 (CESTAT-Del)

Issue: - Whether the valuation of machine imported under EPCG can be challenged by the custom authorities? Whether the valuation of machine is to be done after major reconditioning or the valuation prior to reconditioning will be acceptable?

Brief Facts: - Appellant imported used dairy equipment (Machine) under EPCG Scheme. The Bill of entry was submitted based on a certificate issued by overseas Chartered Engineer. The Customs Authority after investigation observed that the value of the machinery imported was mis-declared and that its value was on higher side. Accordingly, the said machine was seized. Valuation was done by the Customs department showed the value to be on higher side. Show cause notice was issued. The Commissioner held that the import was fraudulently made suppressing the correct transaction value and that appellant had contravened Section 14 & 46 of the Customs Act, 1962 r/w Section 3 and 11 of the Foreign Trade (Development & Regulation) Act, 1992, Rule 11 and Rule 14 of the Foreign Trade (Regulation) Rules, 1993 and Rule 3 of the Foreign Trade (Exemption from Application of Rules in Certain Cases) order, 1993, with intent to evade duty. Accordingly, the said machine was confiscated. Benefit of EPCG licence was denied to the appellant. It was also held that the accuracy and truthfulness of the certificate issued by overseas Chartered Engineer was doubtful. Appellant has filed further appeal.

Appellant’s Contentions: - It was contended that there was no under valuation of the imported machinery. The certificate issued by overseas Chartered Engineer was accurate. No major re-conditioning was done. The price declared in the invoice was reasonable and fair. It was further contended that the EPCG licence was granted by DGFT and any valuation discrepancy was to be examined by DGFT and not Customs Authority. Reliance was placed on the judgment of Jindal Vijaynagar Steel Ltd v/s CC [2001 (45) RLT 491 (CESTAT-Del)]. Appellants have not accepted the valuation made by the Chartered Engineer engaged by the Department. Reliance has also been placed on judgments given in the case of Hy-Grade Pellets Ltd v/s CC [2005 (67) RLT 178 (CESTAT-Del)] and in case of Handtex v/s CC [2008 (86) RLT 533 (CESTAT-Del)].

Respondent’s Contentions: - It was contended that in the certificate issued by overseas Chartered Engineer the place of loading was different and material particulars were not given therein which is contravention of Circular No. 4/2008-Cus, dated 12.02.08. They have relied upon the value certified in the department valuer’s certificate.

Reasoning of Judgment: - The Tribunal perused the valuation certificates of the Overseas Valuer and that of the department valuer. The certificate issued by overseas Chartered Engineer stated that major reconditioning was done but it did not show the price of new machine in the year of its manufacture while the certificate of the Department valuer stated the serial number, year of manufacture and model were not mentioned on the machine. The Departmental Valuer’s certificate was not rebutted by the Appellant by leading cogent evidence or by any cogent reason. Therefore, the enhancement of declared value of the said machine on the basis of the Departmental Valuer’s certificate is upheld.

The Tribunal further held that customs can question the valuation of goods covered by the EPCG scheme when the notification was issued under Section 25 of the Customs Act, 1962. Further, it was held that the judgments cited by the Appellant were not helpful to them as they were distinguishable from the facts of their case.

Imposition of penalty is upheld. However, fine has been reduced as the machine was put to use by appellant. Penalty is also reduced to 20% of the duty amount payable as a measure to prevent recurrence of such practice. The said order is to be communicated to EPCG scheme licensing authority to do needful under law by that Authority.

Decision: - Appeal partly allowed.

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Case: - Bharti Telecom Ltd v/s CC, New Delhi

Citation: - 2009 (94) RLT 73 (CESTAT-Del)

Issue: - Whether the machine imported under EPCG scheme should be used for manufacture of export goods?

Brief Facts: - Appellant was allowed to import capital goods under EPCG License on concessional rate of duty. The said capital goods were installed in their Ludhiana Factory. Accordingly, the appellants were required to make use of the said capital goods to fulfill the export obligation under the licence. However, the appellants exported goods manufactured in their Gurgaon Factory. Revenue initiated against the appellants to proceedings to recover the concession availed by the appellant. Appellant obtained clarification from DGFT in this regard. DGFT clarified that the goods manufactured should have been from imported machinery. Accordingly authorities directed that the appellant was not entitled to the concession basing on the clarification issued by ministry of law. The ministry had clarified that exclusive use of capital goods is necessary for grant of concession.

Reasoning of Judgment: - The Tribunal held that the commissioner had passed appropriate order making his observation that the goods manufactured in Gurgaon were only subjected to discharge of export obligation by the appellant. The capital goods installed at Ludhiana factory did not result in discharge of export obligation. In the absence of such nexus, the appellant has failed to discharge its EO. Revenue have rightly relied upon the Apex Court judgment in Jacsons Thevara v/s CCE [1992 (61) E.L.T. 343 (SC)]. Appellant have defeated the purpose of concession under the law.

Decision: - Appeal dismissed.

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