EXCISE
Place Of Removal In FOR Sales Cannot Be Presumed As Factory Gate: CESTAT Chennai Reiterates
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has reiterated that the “place of removal” in FOR (Free on Road or Rail) destination sales cannot be mechanically assumed to be the factory gate and must be determined on the basis of facts and contractual terms. The tribunal set aside and remanded a service tax order denying CENVAT credit on outward transportation services after finding that the tax authorities had confirmed the demand without examining...
Kopiko Is Sugar Confectionery, Not Coffee-Based Product; 6%, Not 12%, Excise Duty Applies: CESTAT Hyderabad
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, answering a reference made after conflicting rulings by its Hyderabad and Ahmedabad benches, has held that Kopiko, the coffee-flavored candy sold in India, is classifiable as sugar confectionery under the central excise tariff and not as a coffee-based preparation. As a result, the product falls under tariff heading 1704 9090, which attracts 6% excise duty, and not under heading 2101 1200, which carries a 12% duty. The...
Limitation Plea Can Be Raised At Any Stage As Long As Facts Are On Record: Madras High Court
In a recent ruling, the Madras High Court held that a belated plea of limitation cannot be entertained where the factual foundation necessary to examine such a plea is absent on record. The ruling came from a bench of Justice Dr. Anita Sumanth and Justice P Dhanabal while dismissing an appeal filed by Modern Engineering & Plastics Pvt. Ltd. The court noted that "Normally, limitation, if it were to be a pure question of law may be raised at any stage of the proceeding, and it would not...
CESTAT Mumbai Allows CENVAT Credit On Kinder Joy Plastic Toys Despite Excise Exemption On Toys
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed CENVAT credit on duty paid inputs and capital goods used to make plastic toys supplied with Kinder Joy chocolates. It held that such credit cannot be denied only because the toys were exempt from central excise duty. A coram of Judicial Member C.J. Mathew and Technical Member Ajay Sharma said that entitlement to CENVAT credit arises once duty-paid inputs or capital goods enter the factory. It can be...
Mere Stock Shortage Not Proof Of Clandestine Removal: CESTAT Allahabad
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Allahabad has held that a shortage of goods found during a departmental inspection cannot, by itself, justify allegations of clandestine removal. The final outcome came after a split verdict was resolved by a third member, S.S. Garg, who agreed that stock shortages alone cannot be treated as proof of illegal clearances. Garg underlined that “mere shortage of goods does not lead to the conclusion that the goods have been removed...
Bihar Excise Act | Patna High Court Reduces Penalty From 50% To 30% For Release Of Rental Car Seized With Liquor
The Patna High Court has slashed a 50 percent penalty imposed for releasing a rental car seized with nearly 318 litres of liquor. It ordered that the vehicle be released on payment of 30 percent of its insured value and struck down an additional 3 per cent charge as illegal. A Division Bench of Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey noted that the vehicle owner was not an accused in the case and said the confiscation orders needed correction. The court observed, “This Court...
Customs Cannot Withhold Part Of Consignment After Accepting Full Bond, Guarantee : CESTAT Kolkata
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal recently held that Customs authorities were not justified in continuing to detain part of a consignment of used digital multifunction print and copying machines once the importers had furnished the required bond and bank guaranteef for the entire consignment. A coram consisting of Judicial Member Ashok Jindal and Technical Member K Anpazhakan directed provisional release of 63 machines that had been withheld, noting...
[Bihar Excise Act] Patna High Court Slashes 90% Penalty On Insurance Declared Value Of Seized Motorcycle To 10% In Liquor Case
The Patna High Court has relaxed an excessive penalty of 90% of Insurance Declared Value (IDV) to 10% on a motorcycle seized in a liquor-related offence. A Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey held that, considering the quantum of liquor (18 litres), applying Rule 12A of the Bihar Prohibition and Excise Rules, 2021, which prescribes 10% of the insured value as the minimum penalty. The police intercepted the petitioner while riding his...
No Interest On Excise Duty Payable In Revenue-Neutral Situation Even Though Duty Demand Attained Finality: Calcutta High Court
The Calcutta High Court held that statutory interest under Section 11AB of the Central Excise Act is not leviable where the entire transaction is revenue-neutral and the duty paid is available as Cenvat Credit to downstream units, causing no loss to the exchequer. Justices Rajarshi Bharadwaj and Uday Kumar stated that the Tribunal has recorded a clear finding that the situation is revenue-neutral, inasmuch as the duty paid by the assessee was available as Cenvat credit to its ...
Excise | Cutting/Slitting HR-CR Coils Not Manufacturing; Duty Paid On Non-Excisable Activity Cannot Make It Excisable: CESTAT Chennai
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that cutting and slitting of HR-CR coils does not amount to manufacture and therefore, payment of duty on such non-excisable activity cannot create a legal fiction to treat it as excisable. The bench further held that CENVAT (Central Value Added Tax) credit availed in respect of such activity is inadmissible, even if duty was paid. P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical ...
Re-Look Into Composition, Usage, Product Patent, Similarity Of Sun Pharma's Muscle Relaxants For DTA Sales Entitlement: CESTAT Ahmedabad
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), in a matter involving similarity of Muscle Relaxant sold domestically vis-à-vis exported by a Pharma major and benefit concessional duty thereof, has remanded back to the Adjudicating Authority for fresh consideration. Sun Pharmaceuticals Industries Limited, cleared/sold multiple products in Domestic Tariff Area (DTA) at concessional rate of duty in terms of Notification No. 23/2003-CE dated March...