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(See 'The Cob(Web) Column) Export to SEZ units from DTA – Receipt in Indian Rupees (See 'DDT' Column) ST - Notification 12/2005 does not indicate that assessee has to export services on or after 19.04.2005 to avail rebate of CENVAT credit - in absence of specific embargo substantial benefit should not be denied: CESTAT (See 'Breaking News') Immovable Property Returns by babus – 94% IRS officers are defaulters (See 'DDT' Column) Withdrawal of exemption of CVD on import of certain Drugs, Medicines, Diagnostic kits and Life Saving Drugs - An Analysis (See 'Guest Column') SICA & SARFAESI Act - Whether reference pending before Board for Industrial & Financial Reconstruction can be revived once secured creditors of company have initiated steps u/s 13 of SARFAESI Act - NO: SC (See 'Breaking News') Readying for GST - some suggestions (See 'Budget Run-up') Defective Revenue Appeals lying in defect for more than three years dismissed by Delhi High Court (See 'DDT') I-T - Whether sum received at time of retirement can be treated as 'non-compete fee' even if he has continued to serve employer for 9 months after retirement & his age was about 83 at time of retirement - NO: HC (See 'Breaking News') ST on works contract - Is rule laid by CESTAT on issue of free supplies a good law? (See 'ST se GST tak') CX - Quantum of deemed credit revised by amending notifn but appellant availed credit as per earlier notification - credit reversed upon being pointed out - no malafide can be attributed to impose penalty - interest, however, payable: CESTAT (See 'Breaking News') Cus - Classification - 'Paddle Wheel Aerators' used in aqua farming are classifiable as agricultural equipment under CTH 84368090 - aqua farming is an integral part of agricultural activity: CESTAT (See 'Breaking News') When good intentions go bad… (See 'ST se GST tak') Indian exporters got tariff relief worth USD 4.4 bn through GSP in 2014: US Ambassador (See 'Mixed Buzz') SC refuses to restrain states from banning mobile internet, saying that such steps are necessary to maintain law and order Service tax evasion case booked by DGCEI - Makemytrip deposits Rs 42 Crore (See 'Mixed Buzz') Cus - Refusal by Appellate Commissioner to grant refund on ground that department's appeals are pending before HC would tantamount to ensuring stay against CESTAT order & is patently illegal - HC (See 'Breaking News') Customs - Board revamps SVB + Revamped Special Valuation Branch guidelines.. Better late than never!!! (See 'DDT') ST - No liability arises on appellant prior to 16.06.2005 on repairs of transformers received from various SEBs as tender process through which appellant got contract is only a 'work order' and contract for repair: CESTAT (See 'Breaking News') FTP - Procedure for export of sesame seeds to the European Union countries - Deferment of implementation (See 'DDT') VAT - Whether consequential order passed by Appellate Authority in Stay Petition is non-est in eye of law, when Appellate Authority holds that there is no jurisdiction to adjudicate issues raised? - Yes, rules HC (See 'Breaking News') Focus on CENVAT scheme and procedural simplification (See 'Budget Run-up') I-T - Whether assessee can be treated as assessee in default, for not deducting TDS on 'likely to be paid interest', which was ultimately reversed in books - NO: HC (See 'Breaking News') Are two registrations required under CE Law for a dealer? (See 'Budget Run-up') CX - Notf. 214/86 only facilitates principal supplier of raw material and jobworker to avoid payment of duty at intermediate stage - jobworked goods cannot be said to 'exempted' goods - Rule 6(3)(b) of CCR has no application: CESTAT (See 'Breaking News') About 5300 villages electrified in last six months: PM Banks need deep surgery, says RBI Governor 1982-batch IAS officer Ramesh Abhishek appointed as DIPP Secretary Indian Railways signs MoU with Telangana for JV (See 'Mixed Buzz') Related party import cases - CBEC streamlines procedure for investigation by SVB and also for renewal of SVB orders (See Circulars in 'What's New') Economic empowerment of women a must: SC Frustrating to see order on checking traffic congestion in the city not implemented: Delhi HC Indian stock market not an exception, but better off than other global markets: Shaktikanta Das Harinder Sidhu to be new Australian High Commissioner to India Govt will revise small savings interest rates every quarter, instead of annually: Shaktikanta Das Diminishing Political Commitment & The Undented 'Black'! (See 'The Cob(Web) Column) Export to SEZ units from DTA – Receipt in Indian Rupees (See 'DDT' Column) ST - Notification 12/2005 does not indicate that assessee has to export services on or after 19.04.2005 to avail rebate of CENVAT credit - in absence of specific embargo substantial benefit should not be denied: CESTAT (See 'Breaking News') Immovable Property Returns by babus – 94% IRS officers are defaulters (See 'DDT' Column) Withdrawal of exemption of CVD on import of certain Drugs, Medicines, Diagnostic kits and Life Saving Drugs - An Analysis (See 'Guest Column') SICA & SARFAESI Act - Whether reference pending before Board for Industrial & Financial Reconstruction can be revived once secured creditors of company have initiated steps u/s 13 of SARFAESI Act - NO: SC (See 'Breaking News') Readying for GST - some suggestions (See 'Budget Run-up') Defective Revenue Appeals lying in defect for more than three years dismissed by Delhi High Court (See 'DDT') I-T - Whether sum received at time of retirement can be treated as 'non-compete fee' even if he has continued to serve employer for 9 months after retirement & his age was about 83 at time of retirement - NO: HC (See 'Breaking News') ST on works contract - Is rule laid by CESTAT on issue of free supplies a good law? (See 'ST se GST tak') CX - Quantum of deemed credit revised by amending notifn but appellant availed credit as per earlier notification - credit reversed upon being pointed out - no malafide can be attributed to impose penalty - interest, however, payable: CESTAT (See 'Breaking News') Cus - Classification - 'Paddle Wheel Aerators' used in aqua farming are classifiable as agricultural equipment under CTH 84368090 - aqua farming is an integral part of agricultural activity: CESTAT (See 'Breaking News') When good intentions go bad… (See 'ST se GST tak')
 
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CX - Notfn No 32/99 is meant for encouraging industrial growth in N-E, hence deserves to be interpreted liberally - Revenue seeking denial of refund on ground that caps are not integral part of tubes, is illogical - appeal dismissed: CESTAT

By TIOL News Service

KOLKATA, OCT 16, 2012: THIS is a Revenue appeal.

The facts of the case are that the appellant had filed a refund claim for Rs.20,55,749/-paid by them through their account current (PLA) during the month of March, 2006. The said refund claim was filed in terms of paragraph 3(A) of the Notification No.32/99-CE dated 08.07.1999 being a new industrial unit which commenced its commercial production on or after 24.12.1997. After due verification, the adjudicating authority had sanctioned part of the refund claim.

In reducing the refund claim the adjudicating authority had put forth the following reasons -

+ the appellant purchased caps and availed CENVAT Credit on the same and after fitting it on the tubes cleared the same on payment of duty.

+ caps of the empty tubes are not an integral part of such tubes and the value of such caps are not includible in the assessable value.

+ that since no manufacturing activity is involved in the process of procuring and selling out the caps along with manufactured tubes hence the amount paid against clearance of such caps is not admissible for refund in terms of Notification No.32/99-CE dated 08.07.1999.

The Commissioner(A)allowed the appeal filed by the assessee by observing that the caps along with sized laminates and shoulders are placed in the machine and what comes out is a complete tube fitted with cap and hence the value had been correctly included and refund was correctly claimed. The apex court decisions in UOI vs. Metal Box - 1996 (87) ELT 327 (SC) and Burn Standard Co. v. UOI - 1992 (60) ELT 671 (SC) were relied upon by the lower appellate authority.

As mentioned, Revenue is not pleased with this order and is, therefore, before the CESTAT.

The Revenue representative reiterated the findings of the adjudicating authority and also placed reliance inter alia on the decision in M/s. Plasmac Machine Co. Pvt. Ltd. Vs. CCE - (2002-TIOL-455-SC-CX) wherein the judgement of the Supreme Court in M/s. Burn Standard Co. Ltd. had been distinguished.

The respondent submitted that the issue relates to availability of exemption Notification No.32/99 dt. 08.07.1999 and did not relate to determination of value of excisable goods, namely, Lamitubes fitted with the caps; that the duty paid caps are purchased by them from open market and used in the automatic process of manufacture of Lamitubes and the complete product cleared by them is Lamitubes fitted with caps on which excise duty was paid by them; that the cases cited by the Revenue are distinguishable; that the department for subsequent period has allowed refund on the said Lamitubes in remand proceedings and the said order has been accepted as no appeals were filed against those orders.

The Bench observed -

“6. Heard both sides and perused the records. The issue involved in the present case revolves around a narrow compass. It relates to the eligibility of exemption Notification No.32/99-CE dt.08.07.1999 extended to the industrial units situated in north-east area. The applicants are manufacturers of Lamitubes which are used in packaging of goods, namely, cosmetics. The applicant manufactured the bare tube in their factory and purchased the caps from outside and after fitting the caps on the Lamitubes in an integrated manufacturing process cleared the Lamitubes fitted with caps on payment of duty. The Revenue has not disputed the said payment of duty but objected that benefit of Notification No.32/99-CE dated 08.07.1999 could not be entered to the value of caps as the said caps were not manufactured in the factory of the applicants, but procured from outside. We do not find merit in the contention of the Revenue....

7. On a plain reading of the said Notification, it is clear that the manufacturers situated in north-eastern region were entitled to the benefit as allowed under the said Notification on the duty leviable on the goods manufactured and cleared by them from their factory. Hence it is illogical and incorrect to allege that the Lamitubes fitted with caps were not subjected to levy of any duty but only the bare Lamitubes which were manufactured and cleared by the applicant and leviable to duty....”

Placing reliance on the Supreme Court decisions in Commissioner of Customs, Kolkata vs. Rupa & Co. Ltd. (2004-TIOL-65-SC-CUS) & Commissioner of Customs(Preventive), Mumbai vs. M.Ambalal and Company (2010-TIOL-111-SC-CUS) that a beneficial Notification should be given a liberal interpretation, the Bench further observed -

“10. Applying the principles laid down in the above cases we find that the present Notification No.32/99-CE dated 08.07.1999 is meant for encouraging industrial growth as well as expansion of existing industrial units in the north-eastern sector. Therefore, the Notification No.32/99-CE deserves to be interpreted liberally so as to give effect to its objective and purpose. Hence, we are of the view that for calculating the refund amount as per the said Notification No.32/99-CE dated 08.07.1999 the value of the complete tube is relevant but not the bare tube excluding the value of caps. We find that refund of the duty paid through PLA during the relevant period had not been disputed in the present case. Also, we find that for the subsequent period, the adjudicating authority on de novo adjudication of order-in-original No. 54/R-03/2006 dated 31.03.2006 on a remand from this Tribunal had accepted the interpretation that for extending the benefit of Notification No.32/99-CE dated 08.07.1999, the value of caps ought to be included in the total value of Lamitubes. In these circumstances, we do not find any merit in the appeal filed by the Revenue, and accordingly, the same is dismissed...”

In fine, the Revenue Appeal was dismissed.

(See 2012-TIOL-1424-CESTAT-KOL)


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