Jurisprudentiol - Recent Supreme Court Judgements
Central Excise - Modvat Credit - Defective inputs - once the inputs have gone into the manufacturing process, Modvat credit is to be allowed: Settlement Commission - High Court has the power to decide the principle of law on the admitted facts:
In this case, the Settlement Commission had disallowed modvat credit on damaged inputs which have gone into the process of manufacture. The assessee appealed to the High Court and the High Court agreed that the assessee is eligible for such credit, as each step towards production would be a process in relation to the manufacture. The High Court remanded the matter to the Settlement Commission. Against the remand order, the Department is before the Supreme Court. The Supreme Court upheld the High Court order, dismissed the Revenue appeal and directed the Settlement Commission to decide the case again - after 13 years.
Please see Breaking News - Union of India Vs Asahi India Safety Glass Ltd -
Central Excise - Valuation (prior to 2000) - Clearance to own unit - Comparable price correct method - Highest price to other buyer of a single unit cannot be the basis for assessable value:
The Revenue/Department found that the price shown for various models of VIT cleared for captive consumption of the appellant's own unit at Nasik is much lesser than the price at which the appellant had been selling such products to the other parties. A differential duty of Rs.94,48,210/- was proposed to be demanded in the SCN. The respondent replied to the show cause notice in which the prime contention raised was that even if Nasik unit was its own unit and it would be treated as related party, the prices at which the goods were cleared, for Nasik unit was negotiated price and at arms length. On that basis it was pleaded that the price declared for clearance of such goods for Nasik unit should be accepted. The Assessing Officer rejected the plea of the appellant and confirmed the demand raised in the show cause notice. The rejection was on the ground that Nasik unit was to be treated as "related party", such price as declared cannot be taken into consideration in view of the provision of Section 4(1)(a) of the Central Excise Act, 1944. For the purpose of valuation the adjudicating authority resorted to the Valuation Rules. He took into consideration the instance of those models of VIT which were identical in nature and supplied to third party and the highest comparable price i.e. the highest price at which the goods were sold to the third party.
Please see Crompton Greaves Ltd Vs Commissioner of Central Excise, Aurangabad -
Central Excise - in relation to manufacture - Material handling equipment:
The Supreme Court Held : It is an admitted position, as explained by the appellant itself, that these pallets which are manufactured/assembled in the factory of the appellant are in the nature of material handling equipment, to keep and carry work in progress goods from one machine to the other. Thus, the use of the pallets is for carrying out the material from one machine to the other. It cannot, therefore, be said that these goods are used in relation to the manufacture in or in relation to the manufacture of the final products.
Please see Gajra Gears Ltd Vs Commissioner of Customs and Central Excise, -
Central Excise - Classification- yarn - the goods in question, viz., manufacturing yarn out of synthetic waste, rags, silk waste and wool waste are subject to levy of excise duty under entry 5509.90. Tribunal's order upheld.:
After going through the order of the tribunal Supreme Court found that the Tribunal has come to the right conclusion that the goods in question, viz., manufacturing yarn out of synthetic waste, rags, silk waste and wool waste are subject to levy of excise duty under entry 5509.90. Supreme Court was also of the view that the extended period of limitation was rightly invoked. Therefore, it did not find any merit in the appeal preferred by the assessee.
Tribunal has reduced the amount of demand of Rs. 26,35,780/- as contained in the order of the Commissioner to Rs.7,28,540/- on the ground that the period prior to 26.5.1995 could not be taken into consideration. The Tribunal has given valid reasons for this conclusion. Thus, the appeal of the Revenue also, challenging this part of the order, is dismissed.
Please see Commissioner of Central Excise, Chandigarh Vs Oswal Yarns Ltd -
Central Excise - valuation - bought out items.:
It is contended that the assessee had removed boilers in unassembled form at the factory site according to the excise authorities. The Tribunal has decided this issue in favour of the Revenue accepting its plea that without these parts a boiler cannot function. It is this part of the Tribunal's order which is assailed in the present appeal. Counsel pointed out that though in the show cause notice such bought out parts were mentioned in annexure D thereto, while computing the demands which were raised in the show cause notice, no excise is demanded on the above item. If that be so, there is no need to go into the issue raised by the appellant in this appeal as the decision of this appeal either way would not affect the appellant if the duty itself is not demanded thereupon. While dismissing this appeal, it is clarified that if there was no such amount demanded in the show cause notice, the direction contained in para 10 and 11(b) of the impugned order of the Tribunal to the jurisdictional officer to determine and recover the duty from the appellant shall have to go. However, it is only if the Officer is satisfied that no demand was made in respect of aforesaid items while computing the demand.
Please see Thermax Babcock and Wilcox Ltd Vs Commissioner of Central Excise, Pune -
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