Indirect Taxes

Excise & Customs – Case Law Update

1. Commissioner of Customs & Central Excise, Guntur vs. Empee Sugar & Chemicals Limited [2007 (211) ELT 293]

In the present Appeal the Department had challenged the order of the Commissioner (Appeals), whereby he allowed the refund claim of the Appellant of Rs. 30,000/-, paid by them towards Educational Cess on 3000 MTs of molasses. The Department contended that the applicants are not entitled for the refund as they had not proved that the incidence of duty had not been passed on to the buyer. The Department did not want to accept the Chartered Accountant’s Certificate certifying that the incidence of cess had not been passed to the customers. Rejecting the contention of the Department, the Tribunal held that the Chartered Accountant’s Certificate has evidentiary value and it cannot be false or incorrect as it will otherwise have penal consequences. The Department’s Appeal was hence rejected.

2. Commissioner of Customs, Visakhapatnam vs. Navabharat Ferro Alloys Limited [2007 (211) ELT 280]

In the present Appeal the Department had challenged the order of the Commissioner (Appeals) setting aside the Order-in-Original and allowing the refund claim of the assessees, who are manufacturers of sugar. The assessees were clearing both “ Free-Sale Sugar” and “ Levy Sugar”. They separately classified the same as the items suffered different rates of Excise duty. On account of paucity of space within the factory, the appellants took permission from the Commissioner to store the sugar of both types in their godowns. While shifting the sugar from the factory they paid duty applicable to free sale sugar and filed a letter dated 22nd June, 2001 stating that they would be effecting clearance of levy sugar and subsequently claiming refund of duty differential. They made the clearance of the levy sugar from the godowns on 26th June, 2001 and thereafter filed the Refund claims. The Department took the view that the refund claim was barred by time as the date of clearance from the godown is not relevant and date of clearance is reckoned from the date of payment of duty from factory. The Commissioner (A) held that the communication dated 26th June 2001 be treated as an original claim and so did the Hon’ble Tribunal. The Department’s Appeal was accordingly rejected.

3. U.P. State Sugar & Cane Development Corporation Limited vs. CCE, Meerut-II [2007 (80) RLT 270-CESTAT-Del]

In the present appeal, the appellant filed an Appeal against Order-in-Appeal, whereby the demand in respect of molasses which was deteriorated in the factory was made on the ground; i.e., molasses was shifted from the covered tank to open tank without permission. Since the molasses are controlled item, they cannot be cleared without permission and hence the appellants could not clear them without permission. The appellants further contended that the molasses had deteriorated during storage and therefore no demand could be made. The Tribunal upheld the contention of the appellant and allowed the Appeal of the appellant.

4. CCE, Pune-III & Another vs. Fleetguard Filters Private Limited & Anr { 2007 (80) RLT 278}

In the present appeal filed by the Department, the issue involved was regarding the imposition of penalty under section 11AC of the Central Excise Act, 1944. The Appellants contended that as the duty was paid before the issuance of the show cause notice, no penalty was payable under section 11AC of the Act. The Tribunal upheld the contention of the appellants and allowed their appeal.