INDIRECT TAXES

Central Excise & Customs

Vipin Jain

1. Merger of orders: Apex court order under Special Leave Petition (SLP) is an order under Article 136 of Constitution of India, a discretionary remedy.

SLP if dismissed with reasons, the order gets merged with said order. However the order does not get merged if the SLP is dismissed without recording any reasons, does not amounts to precedent.

In this case the order of High court of Andhra Pradesh was challenged before the Apex court. Apex court held that the SLP dismissed without reasons cannot have binding precedent.

Gangadhara Palo vs Revenue Divisional Officer-2011(266) ELT 3 (SC).

2. Interest: CENVAT credit wrongly availed and reversed voluntarily before its utilization, amounts to not taking of the credit. Revenues contention that there was strict liability to pay interest irrespective of factors such as there was no mala fide intention or reversed voluntarily, rejected by Hon’ble Gujarat High court.

In the instant case the appellants have availed credit and reversed voluntarily before utilization. Adjudicating authority, commissioner (appeals) as well as Tribunal held that no interest is payable in such situations. Revenue however challenged the said order before Hon’ble Gujarat High court which was rejected.

Commissioner of Central Excise vs. Dynaflex Pvt Ltd. 2011 (266) ELT41 (Guj-HC).

3. Job Work-No duty liability can be fastened on Principal Manufacturer in case of non-receipt of goods after job work. Such waste & scrap generated at job workers end not dutiable in the hands of principal manufacturer as held by Hon’ble Bombay High court.

Appellants got certain goods manufactured under job work where the waste and scrap generated in the process were not returned to principal manufacturer. Department demanded the duty for said goods from the principal manufacturer who is not the manufacturer of goods. Hence duty cannot be demanded from the appellants.

Fag Engineering (I) Ltd vs. CCE-2011 (266) ELT 193 (Tti.-Ahd)

4. Manufacture: Manufacturing includes all process enumerated in section 2(f) of Central Excise Act, 1944, however all processes are not manufacture. Cutting paper back aluminium foil and embossing same for purpose of packing cigarettes not amounts to manufacture.

Appellants were merely cutting and embossing the said aluminium foil for the purpose of packing the cigarettes. The process of cutting foil to size on the continuos basis does not amount to manufacture.

Commissioner vs. GTC Industries Ltd. 2011 (266) ELT 160 (HC-Bom.)

5. Compounded Levy Scheme-Demand & Limitation-Time limit under section 11A of Central Excise Act not applicable. Time limit prescribed under one scheme could be unwarranted for another scheme. Importing one scheme of Tax administration to a different scheme inappropriate.

Appellants are engaged in the manufacture of Iron & Steel products falling under chapter 72 & 73 of CETA, 1985. The goods manufactured by the appellants were chargeable to duty in terms of section 3A of the Act and duty was supposed to be paid under the "Hot Rolling Steel Mills Annual Capacity Determination Rules 1997. However the demand was raised under section 11A of Central Excise Act 1944 which is held to be not applicable by the Apex Court.

Hans Steel Rolling Mill vs. CCE 2011(265) ELT 321 (SC)

6. Dutiability of samples-Samples drawn for testing not cleared from factory. Demand for duty not arises when goods not cleared from factory but proper accounts of such samples maintained.

Assessees are engaged in the manufacture of Bulk Drugs . The duty is demanded on the control samples drawn for testing and used within the factory.

RPG Life Sciences Ltd vs. CCE 2011(264) ELT 346 (HC-BOM.).