Jurisprudentiol- Recent Supreme Court Judgements
Central Excise - Valuation - Cost of free issue materials. Tribunal remanded the case to adjudicating authority for fresh adjudication. Assessee challenges that order in the Supreme Court. In the meanwhile adjudicating authority passes order again on remand. Against that order, assessee's appeal allowed by CESTAT. Against CESTAT Order, Revenue in appeal before Supreme Court: Assessee's appeal infructuous; Revenue Appeal Dismissed: The question of law in this case is not important, the tortuous journey of litigation is. The assessee is a manufacturer of Earth Moving equipments which they supply to Bharat Earth Movers Limited. The material is supplied by the BEML free of cost and after manufacturing the equipments the same are supplied to the BEML by the assessee. The question is whether that cost is to be included in the value for the purpose of excise duty in the hands of the assessee. The CESTAT remanded the case to the adjudicating authority, against which the assessee is in appeal before the Supreme Court, because its plea of limitation was rejected by the CESTAT. By the time the case came up for hearing before the Supreme Court, the adjudicating authority had already decided the issue a second time - naturally confirming the demand. Against this order, the assessee approached the Tribunal and the Tribunal set aside the order of the Commissioner. This time Revenue approached the Supreme Court. So, now there are two appeals in the Supreme Court, one by the party and one by Revenue, both arising out of the issue whether the cost of free issue material has to be included.
An interesting Turn: When the case of the assessee was called for hearing, the counsel for the Revenue stated that he has not been given any instructions to appear in this appeal and he was not aware as to whom this appeal is granted for arguments. However he has agreed to appear in this appeal and the Revenue appeal at the request of the Court. (That's how Revenue manages its cases)
Since the show cause notices and consequent thereto the order passed by the adjudicating authority itself stands set aside by the CEGAT on merits, the Supreme Court held that the assessee's appeal has become infructuous.
That leaves the Revenue appeal yet to be decided. The Revenue's Counsel (by Court Request) requested for two days time to prepare that case. The Supreme Court found that the case is covered by the judgment of this Court in International Auto Ltd - and dismissed the Revenue Appeal.
Please see Ghatge Patil Industries Ltd Vs Commissioner of Central Excise -
Central Excise - No exemption for an intervening period - Compounded rubber was exempted from 25.5.1987. This was withdrawn on 1.3.1994 (by mistake), along with exemption for 389 products. On 28.3.1994, the exemption was restored. Thus there was no exemption for the period from 1.3.94 to 27.3.94..:
Compunded Rubber manufactured and captively used was exempted since 1987. On 1.3.1994, the Government rescinded 389 notifications and this rubber also got swept away in the flood. The mistake was realised and on 28.3.1994, Government again issued a notification allowing the exemption. Thus there was no exemption for the period from 1.3.1994 to 27.3.1994. Whoever issued this notification knew pretty well that they were correcting a mistake, but the Revenue has no qualms about punishing the assessee for the babu's mistake.
And this case reached the Supreme Court. After about twenty years of raising the issue, the Supreme Court decided that the assessee was eligible for the exemption following the decision in the case of W.P.I.L. Ltd. vs. Commissioner of Central Excise, Meerut, U.P. -
During the pendency of the appeal, the assessees were asked to make pre-deposit, which is now directed to be refunded. We don't know whether the Department will follow the Apex Court's directions or start a new litigation. Ease of doing business ?
Please see Ralson (India) Ltd Vs Commissioner of Central Excise -
Central Excise - Exemption to goods manufactured in rural areas by registered co-operative societies - it has been established by the respondent that the conditions contained in the exemption Notification are satisfied. Not only this, the respondent is armed with a certificate issued by the Department of the Electronic to the effect that the individual components were assembled in the factory of the respondent which is in a rural area. No question of law..: The dispute is as to whether the assessee is entitled to exemption under the Notification 88/88 C.E. dated 1.3.1988 which gives exemption to village industries i.e. where such goods are manufactured in rural areas by registered co-operative societies, or by women's societies or by the institution recognised by village Industries Commission or Board on certain conditions which are laid down in the said Notification. One of the conditions specified is that the exemption shall be applicable only if individual components of such electronic goods are assembled in rural area of such societies.
The Commissioner was satisfied that the assessee, a Cooperative society satisfied the conditions, but the revenue took the matter to the Tribunal where its appeal was dismissed. Never the one to say, no to an appeal, the Revenue filed an appeal against the Tribunal order to the Supreme Court.
The Supreme Court observed, it has been established by the respondent that the conditions contained in the exemption Notification are satisfied. Not only this, the respondent is armed with a certificate issued by the Department of the Electronic to the effect that the individual components were assembled in the factory of the respondent, which is in a rural area.
The Supreme Court did not find any question of law for consideration in the appeal, which is accordingly dismissed.
Please see Commissioner of Central Excise Vs SANNIHITA ELECT W W IND COP SOC LTD -
Central Excise - SSI Exemption - Brand Name - No exemption if the brand name of another person is used.
Facts: Tata Iron and Steel Company Ltd. (TISCO) has given authorization to the respondent to manufacture TISCOG. This not only gives authorization to the respondent to manufacture the goods i.e. Steel Cog Stool as per the TISCO patent design but also gives right to the respondent to market the said goods. The respondent has been receiving orders from various parties to manufacture and supply it to them the Steel Cog Stools with the patent design for which authorization is given by TISCO Ltd...: The respondent did not pay any excise duty on the premise that it was entitled to the exemption under the Notification 1/93-CE. When the show cause notice was issued to the respondent to pay the excise duty, defence of the respondent was that the respondent was not affixing the said brand name TISCOG on the goods which were supplied by respondent to the parties from which he received the orders. It was stated that such a name was mentioned only in the invoices which were raised by the respondent. This contention was not accepted by the Commissioner in his order, but Tribunal allowed the appeal. Revenue is before Supreme Court.
Held: the impugned order of the CEGAT is untenable and not in accordance with law. It is not necessary that there has to be affixation of the name or mark on the goods.
Penalty: non-payment of duty by the respondent was bona fide act, having nurtured a belief that it was not liable to pay the excise duty on the goods. Penalty set aside.