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CX - Review order passed by two senior CCs is an absurd order passed with absolutely no application of mind and as such there is absolutely no merit in Revenue appeal: CESTAT (See 'Breaking News') Government amends Black Money Act to give it effect from July 1, 2015 - Can Govt amend an Act passed by Parliament? (See 'DDT Column') I-T - Whether when assessee's case is pending before CIT(A), it can still go in writ against conduct of search and seizure operations - NO: HC (See 'Breaking News') The Henry VIII Clause? (See 'DDT') CENVAT - Employee was involved in fraudulent act of taking credit for his personal gain - such act cannot be attributed to appellant co as mala-fide act, as act of fraud admittedly is not authorized and can never be authorized by management: CESTAT (See 'Breaking News') Minister calls for use of self-attested certificates (See 'Mixed Buzz') CX - Al dross, oily flash generated during manufacture of MV Aluminium parts given to jobworker situated within same factory for conversion into ingots - clearances not captive consumption but to be considered as covered u/r 4(5)(a) of CCR, 2004: CESTAT (See 'Breaking News') Child Care Leave - Income Tax Department in appeal against own employee (See 'DDT') I-T- Whether consideration received from sale of land can be treated as long term capital gain, where such land are agricultural land and beyond 8 KMs from municipal limits - NO: ITAT (See '2015-TIOL-1031-ITAT') CBEC notifies New Customs Exchange rates effective from 3th July (See Notification No 66 in 'What's New') Aizawl Customs seizes FICN worth Rs 9.7 lakh in Rs 1000 denomination; One person arrested Black Money Act to come into force from July 1, 2015 + Sept 30 notified as last date under 'Compliance Window' (See Notifications in 'Black Money Basket' in TIOL Library) Roadmap for Corporate tax reduction - CBDT resorts to economic-cum-political compulsions FILTER to select Exemptions to be guillotined Digital India is welcome but PM needs to do more for e-Commerce (See 'The Cob(Web) Column) CX - Car air conditioners - Division Bench Ruling upheld; Rules of interpretation always subject to context and not binding commands on iron cast imperatives - Supreme Court (Larger Bench) (See 'Breaking News') Tariff Entries - Rules of interpretation always subject to context and not binding commands on iron cast imperatives: Supreme Court (See 'DDT') CX - Service is not tangible unlike inputs or capital goods - Scope of service is not limited within four corners of factory - ST paid on renting of Gala which was not part of manufacturing activity is also admissible as CENVAT credit: CESTAT (See 'Breaking News') FTZ 2015 - 2020 - Discrimination between exporters of DTA and SEZ (See 'Guest Column') I-T - Whether any disallowance u/s 40(a)(ia) is warranted when AO has accepted in his remand report that assessee has discharged all its TDS obligations - NO: ITAT (See 'Breaking News') Orders of appellate authorities should be followed unreservedly by the subordinate authorities Contemptible Order of CIT(A): ITAT (See 'DDT') Appeals by State Govt undertakings - High Court allows restoration of appeal of 2004 dismissed in 2011 for want of COD clearance in light of ECIL case (See 'Breaking News') GSTN wants Vice-President and Senior Manager (See 'DDT') 'Compliance Window' under New Black Money Act - CBDT notifies Sept 30 as deadline for making declaration and Dec 31, 2015 as last date for making payment with penalty Najib Shah gets Addl Charge of CBEC Chairman (See 'Service News' in Pitara) PM to launch programme on digital empowernment of citizens today (See 'Mixed Buzz') Whether developers entering into agreements for sale of constructed apartments or flats prior to or during construction would be covered under term 'works contract' and hence were chargeable to VAT (See '2015-TIOL-1521-HC') New post-2020 climate change targets add up to 60% of global emissions (See 'Mixed Buzz') CBEC grants NFSG benefits to 113 JCs (See 'Promotion' in Pitara) Income tax - Whether Long term capital loss on sale of equity shares can be set off against Long term capital gain arising on sale of land - YES: ITAT (See 'Breaking News') Audit: Frequently Asked Questions (See 'DDT' Column) CBEC promotes 100 officers as JCs + promotes 177 Superintendent of Central Excise + Customs + Jai Prakash transferred from Bhopal to ADG (Inspection), Chennai + CC, Bhubaneswar gets addl charge of Kolkata (See 'Pitara') CX - Erroneous payment of duty on exempted goods does not make them non-exempted - No error in order of Tribunal in allowing exemption under Notification 89/95 to waste and scrap arising in manufacture of such goods: HC (See 'Breaking News') Income Tax e-filing is ready (See 'DDT') Core Sector growth doubles in May (See 'Mixed Buzz') Cus - Brokers Licencing Regulations - Under Regulation 20(1), notice to be issued within 90 days from date of receipt of offence report - SCN issued beyond 90 days is invalid and is quashed: HC (See 'Breaking News') Najib Shah - New Chairman of CBEC - Please clarify Education Cess (See 'DDT') Transfer Pricing - CBDT signs first APA in IT/ITes industry Monitoring of effluents: 920 out of 2800 industries begin 24x7 vigil (See 'Mixed Buzz') MAT on FII - Bombay HC stay on demand to continue as Revenue expresses desire to wait for Apex Court verdict in two pending cases Nagpur Airport Customs seizes 3 kg gold concealed in music system CBEC reduces tariff value across the board, including that of gold and silver (See 'What's New') CX - Review order passed by two senior CCs is an absurd order passed with absolutely no application of mind and as such there is absolutely no merit in Revenue appeal: CESTAT (See 'Breaking News') Government amends Black Money Act to give it effect from July 1, 2015 - Can Govt amend an Act passed by Parliament? (See 'DDT Column') I-T - Whether when assessee's case is pending before CIT(A), it can still go in writ against conduct of search and seizure operations - NO: HC (See 'Breaking News') The Henry VIII Clause? (See 'DDT') CENVAT - Employee was involved in fraudulent act of taking credit for his personal gain - such act cannot be attributed to appellant co as mala-fide act, as act of fraud admittedly is not authorized and can never be authorized by management: CESTAT (See 'Breaking News') Minister calls for use of self-attested certificates (See 'Mixed Buzz') CX - Al dross, oily flash generated during manufacture of MV Aluminium parts given to jobworker situated within same factory for conversion into ingots - clearances not captive consumption but to be considered as covered u/r 4(5)(a) of CCR, 2004: CESTAT (See 'Breaking News') Child Care Leave - Income Tax Department in appeal against own employee (See 'DDT') I-T- Whether consideration received from sale of land can be treated as long term capital gain, where such land are agricultural land and beyond 8 KMs from municipal limits - NO: ITAT (See '2015-TIOL-1031-ITAT') CBEC notifies New Customs Exchange rates effective from 3th July (See Notification No 66 in 'What's New') Aizawl Customs seizes FICN worth Rs 9.7 lakh in Rs 1000 denomination; One person arrested Black Money Act to come into force from July 1, 2015 + Sept 30 notified as last date under 'Compliance Window' (See Notifications in 'Black Money Basket' in TIOL Library) Roadmap for Corporate tax reduction - CBDT resorts to economic-cum-political compulsions FILTER to select Exemptions to be guillotined Digital India is welcome but PM needs to do more for e-Commerce (See 'The Cob(Web) Column) CX - Car air conditioners - Division Bench Ruling upheld; Rules of interpretation always subject to context and not binding commands on iron cast imperatives - Supreme Court (Larger Bench) (See 'Breaking News') Tariff Entries - Rules of interpretation always subject to context and not binding commands on iron cast imperatives: Supreme Court (See 'DDT') CX - Service is not tangible unlike inputs or capital goods - Scope of service is not limited within four corners of factory - ST paid on renting of Gala which was not part of manufacturing activity is also admissible as CENVAT credit: CESTAT (See 'Breaking News') FTZ 2015 - 2020 - Discrimination between exporters of DTA and SEZ (See 'Guest Column') I-T - Whether any disallowance u/s 40(a)(ia) is warranted when AO has accepted in his remand report that assessee has discharged all its TDS obligations - NO: ITAT (See 'Breaking News') Orders of appellate authorities should be followed unreservedly by the subordinate authorities Contemptible Order of CIT(A): ITAT (See 'DDT') Appeals by State Govt undertakings - High Court allows restoration of appeal of 2004 dismissed in 2011 for want of COD clearance in light of ECIL case (See 'Breaking News') GSTN wants Vice-President and Senior Manager (See 'DDT') 'Compliance Window' under New Black Money Act - CBDT notifies Sept 30 as deadline for making declaration and Dec 31, 2015 as last date for making payment with penalty Najib Shah gets Addl Charge of CBEC Chairman (See 'Service News' in Pitara) PM to launch programme on digital empowernment of citizens today (See 'Mixed Buzz') Whether developers entering into agreements for sale of constructed apartments or flats prior to or during construction would be covered under term 'works contract' and hence were chargeable to VAT (See '2015-TIOL-1521-HC') New post-2020 climate change targets add up to 60% of global emissions (See 'Mixed Buzz') CBEC grants NFSG benefits to 113 JCs (See 'Promotion' in Pitara) Income tax - Whether Long term capital loss on sale of equity shares can be set off against Long term capital gain arising on sale of land - YES: ITAT (See 'Breaking News') Audit: Frequently Asked Questions (See 'DDT' Column) CBEC promotes 100 officers as JCs + promotes 177 Superintendent of Central Excise + Customs + Jai Prakash transferred from Bhopal to ADG (Inspection), Chennai + CC, Bhubaneswar gets addl charge of Kolkata (See 'Pitara') CX - Erroneous payment of duty on exempted goods does not make them non-exempted - No error in order of Tribunal in allowing exemption under Notification 89/95 to waste and scrap arising in manufacture of such goods: HC (See 'Breaking News') Income Tax e-filing is ready (See 'DDT') Core Sector growth doubles in May (See 'Mixed Buzz') Cus - Brokers Licencing Regulations - Under Regulation 20(1), notice to be issued within 90 days from date of receipt of offence report - SCN issued beyond 90 days is invalid and is quashed: HC (See 'Breaking News') Najib Shah - New Chairman of CBEC - Please clarify Education Cess (See 'DDT') Transfer Pricing - CBDT signs first APA in IT/ITes industry Monitoring of effluents: 920 out of 2800 industries begin 24x7 vigil (See 'Mixed Buzz') MAT on FII - Bombay HC stay on demand to continue as Revenue expresses desire to wait for Apex Court verdict in two pending cases Nagpur Airport Customs seizes 3 kg gold concealed in music system CBEC reduces tariff value across the board, including that of gold and silver (See 'What's New')
 
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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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