Excise case laws

Central Excise - SHALIMAR WIRES INDUSTRIES LTD. Versus COMMR. OF C. EX., KOLKATA-IV = 2008

Date of Decision: June 11, 2008 - CESTAT KOLKATAWoven greig fabric produced during the manufacture of FWC - Demand raised is in respect of heat treated fabric, before it is processed into FWC - Leviability of basic excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 – held that duty is leviable unless goods are specifically exempted – revenue has not proved marketability of intermediate product - matter remanded to re-determine the marketability of product

Central Excise - BRAKES INDIA LTD. Versus COMMISSIONER OF C. EX., DELHI-III = 2008 Date of Decision: June 5, 2008 - CESTAT NEW DELHIValuation of goods which are transferred inter-units - goods cleared were assessed on provisional basis, paying higher amount of duty - appellant adopted a higher profit margin of 30% - appellant explained this adoption of higher margin only to take care of value fluctuation in respect of inputs which have gone into the manufacture of the goods cleared from their Chennai units – since there is no allegation of fraud, whatever duty paid is taken as credit by another unit, credit is not deniable
Central Excise - HINDALCO INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., BELGAUM = 2008

of Decision: May 22, 2008 - CESTAT BANGLORESteel plates and strips used in mfg. of capital goods (steel tanks) – in view of Explanation 2 in Rule 2(k) of the Cenvat Credit Rules, impugned goods can be treated as inputs because these goods are used in the manufacture of tanks falling under Chapter 84, which is specifically mentioned in the definition of capital goods – credit cannot be denied merely for the fact that steel tank are exempted under Notification No. 67/95
Central Excise - COROMANDAL PAINTS LTD. Versus COMMR. OF C. EX. & CUS., VISAKHAPATNAM-I = 2008

Date of Decision: May 16, 2008 - CESTAT BANGLORESupervision expenditure by buyer to ensure the correct quality - issue involved is whether the expenditure incurred by the buyer is to be included in the assessable value – impugned expenses are not incurred on behalf of manufacturer - department proceeded against the appellants holding that they are includible – action of department is not acceptable – appeal of assessee is allowed

Self Credit Scheme under Excise

Self Credit Scheme under Excise
(BY MOHAN,EDITOR,JAB WE MET CA)
Self Credit Scheme is one of the privilege given to an establishment in the state of Jammu and Kashmir by giving benefits of Central Excise
Original notification 57/2002…….. Exempts the goods specified in the schedule cleared from a unit located in the state of Jammu & Kashmir, from so much of amount of excise livable thereon under excise act as equivalent to amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under CER 2002.

The point to be noted here is its only the amount of Excise which is exempted , the Assesee is required to pay the amount of CESS out of PLA, in other words we can say it can not be used for the payment of CESS.

Manufacturer has two Options
Either take refund of Duty paid on Cash or Take Credit of That Amount

Eg…..

Excise Payable on Output Rs100
Less:-
CENVAT Availed Rs 40

Excise Paid In Cash Rs 60


Now either he can take refund of this amount or…….

Next Month Excise Payable RS 200
Less;-
CENVAT Availed Rs 80
Less:-Self Credit Rs 60

(the amount paid in cash of last Month)
Payment to be made in Cash RS 60

Next Month Self Credit Available Will be 120 (I.e 60+60) as the amount paid as self credit will also be treated as paid in cash.
Now……… Notification 57/2002 is amended by Notification 22/2008

The amount of Self Credit taken is reduced by inserting following words

Credit Available……………….is of … Duty payable on VALUE ADDITION undertaken in the manufacture of the said goods by said unit

Duty Payable on Value Addition

Total Duty Payable (Gross) * %age specified in notification

Credit Available is of Duty Payable on Value Addition
Or
Amount paid in Cash
Which ever is less

Article by:-
Mohan Chand

IMPORTANT & RECENT EXCISE CASES

Central Excise - Godrej Industries Ltd. Vs. D.G. Ahire Assistant Collector Of Central Excise & Another = 2008

Date of Decision: July 9, 2008 - SUPREME COURT Liquid hair dyes – classification - there was no specific entry relating to "hair dyes" under CET however, "hair lotion" is specified under Tariff Item 14F - Demand under Tariff Item 14F of the First Schedule to the Central Excise and Salt Act, 1944 – said product could not be treated as a lotion to be used as a scalp or hair nourisher or for medicinal purposes - appellant's preparation was poisonous and had to be used with great care – demand according to Tariff Item 14F was erroneous

Central Excise - OMEGA CABLES LTD. Versus DEPUTY COMMISSIONER, CHENNAI-II = 2008

Date of Decision: January 31, 2006 - HIGH COURT MADRASThere is an order of Tribunal, fixing the liability on the petitioner to pay the duty and when there is admittedly no stay against that order is passed, the first respondent (Revenue) is entitled to make a demand for payment of the duty - Such a demand is perfectly legal and the first respondent cannot be restrained from making the demand - The petitioner has not made out a case for issuing the writ

Central Excise - COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Versus VALLABH STEEL LTD. = 2008

Date of Decision: August 7, 2006 - HIGH COURT OF PUNJAB & HARYANA Commissioner while accepting the abatement claim of the assessee recovery of demand & penalty was ordered – Tribunal quashed the demand & penalty - contention raised by Revenue that the Tribunal could not go into the issue which was not subject matter of the order appealed against, is totally misconceived & liable to be rejected - CBEC should look into the matter with regard to filing of appeals in the matters involving petty amount, as in the present case
Central Excise - RAYALASEEMA PAPER MILLS LTD. Versus COMMISSIONER OF C. EX., HYDERABAD-II = 2008

Date of Decision: December 7, 2005 - CESTAT, BANGALOREAction of the department of issuing SCN to initiate proceedings of penal provisions after the adjudication, is not sustainable in the eye of law - issue is also decided in a similar matter by the Calcutta (sic) imposition of penalty, once decided as held by the Calcutta High Court - Commissioner was bound by the said judgment yet he has not followed the same, which is not correct – SCN can’t be held legal hence penalty are not imposable

IF YOU NEED MORE SUMMARIES OF CENTRAL EXCISE CASES, MAIL TO ME AT casatbirgill@gmail.com

WITH REGARDS

SATBIR SINGH

PRESIDENT

JAB WE MET CA

REDEFINING PROFESSIONALISM.......

19 steel companies under scanner on excise evasion

19 steel companies under scanner on excise evasion

NEW DELHI: The Directorate General of Central Excise Intelligence has issued showcause notices to 19 steel firms for alleged duty evasion of about Rs 108 crore. Parmarth Industries, Kamakhya Steel and Jain Steel are among the defaulters. Taxmen had raided the premises of Parmarth, an Uttar Pradeshbased saria maker about a year ago and recovered Rs 1.78 crore, sources said.