Excise & Customs -Case Law update

1. CCE, Bhopal vs. M/s. Vidhya Cylinder Private Limited [2006-TIOL-1191-CESTAT-Del]

In this case, the Department challenged the order of the Commissioner (Appeals) allowing the refund claim of the respondent. The Commissioner (Appeals) had allowed the refund application of the Respondents on the ground that the bank guarantee executed by the respondents in lieu of the redemption fine was not executed on a quantified amount of fine. No recovery could be sought to be made on the amount which was not quantified by the Department and hence the invocation of the bank guarantee was not proper. The Hon’ble Tribunal upheld the order of the Commissioner (Appeals) and held that the Commissioner (Appeals) has correctly allowed the refund appropriated by the authority against the unquantified amount. As a result the Appeal filed by the Department was dismissed.

2. Commissioner of Central Excise, Chennai vs. Johnson Lifts (Pvt.) Limited [2006 (201) ELT 337 (Tri-Chennai)]

In the present case the issue involved was whether section 11AC and section 11AB were liable to be invoked, respectively, for imposing penalty on the assessee and for levying interest from them, notwithstanding the fact that they had paid the entire amount of duty (for the period 13-1-1999 to 23-6-1999) prior to the date of issue of the relevant show-cause notice. It was held that involuntary payment of duty does not necessarily involve any of the elements specified in section 11AC of Central Excise Act, 1944 and hence penalty was not impossible.

3. Commissioner of Central Excise, Mumbai vs. Charisma Cosmetics Private Limited [2006 (201) ELT 564 (Tri-Mumbai)]

In the present case the issue before the CESTAT was that ‘whether multi piece packages of cosmetics containing lipsticks and nail polishes attract the provisions of section 4A of the Central Excise Act, 1944 requiring valuation on the basis of MRP’. The CESTAT following the larger bench decision in the case of CCE, Mumbai vs. Urison Cosmetics Limited [2006 (198) ELT 508 (Tri-L.B.)] held that Rule 34 of the Standard of Weights and Measures Act, under sub-rule (b) exempts packages containing the commodities net weight of which is less than 10 gm or 10 ml if sold by weight or measure from the entire SWMR including provisions of Rule 17, which is applicable to multi piece packages. In view of the same, subject to the limits prescribed under Rule 34(b) of SWMR, packages of cosmetics would remain outside the purview of the Rules and would be assessed under section 4 of the Central Excise Act, 1944. The Revenue’s Appeal was hence rejected.

4. Century Laminating Company Limited vs. CC, Delhi-I [2006 (76) RLT 151 (CESTAT-Delhi)]

In the present case the issue before the Hon’ble CESTAT was whether the bar of unjust enrichment was applicable to refund applications under section 27 of the Customs Act, 1962, when the provisional assessment was ordered by the High Court by way of a writ of mandamus in the appellant’s case?’ The Hon’ble CESTAT following the orders passed by the High Court in the appellant’s case and as per the law laid down by the apex Court in the case of ‘Mafatlal Industries [1996 (17) RLT 907 (SC)], the Hon’ble CESTAT held that, in this case the refund of duty has arisen due to mandamus of the Hon’ble High Court in the appellant’s Writ Petition and as such the bar of unjust enrichment would not be applicable in the facts of the case. As such the Appeal of the appellants was allowed.

5. Steel Authority of India Limited vs. Commissioner of Central Excise, Raipur [2006 (201) ELT 580]

In the present case the issue before the Hon’ble CESTAT was when the conveyor belts manufactured by the appellants , which were worn out were scraped and removed. The Department sought to charge excise duty on the scraped conveyor belts. The appellant contended that the same were not excisable as no manufacture was done by the Appellants in this case. The Hon’ble CESTAT allowed the Appeal filed by the appellant’s and set aside the impugned order.