December 26, 2024 11:33 pm

Customs & Excise

Labelling and Re-Labelling of Containers Qualifies as ‘Manufacture’ for CENVAT Credit Under Excise Act

Bysclaw

May 26, 2024

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By sclaw

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Customs & Excise

Customs Act, 1962 — Sections 28, 28AB and 125 — When goods are confiscated under Section 125 of the Act, 1962, and later redeemed by paying a fine, the owner of the goods is liable to pay customs duty under Section 28 of the Act — This duty obligation arises only after the option to pay the fine is exercised, and it is a precondition for redemption — The court also held that the interest on delayed payment of duty under Section 28AB of the Act is also applicable in such cases — The decision settles the confusion regarding the applicability of Section 28 and Section 28AB in confiscation proceedings under Section 125 of the Act.

Jul 27, 2024 sclaw

Customs & Excise

“Supreme Court Expands Definition of ‘Manufacture’: Labeling Alone Qualifies for Cenvat Credit and Rebate” Central Excise Act, 1944 – Section 35L(1)(b) – qualification as ‘manufacture’ under the Act – The primary issue is whether the labeling activity constitutes ‘manufacture’ as per Note 3 to Chapter 18 of the Central Excise Tariff Act, thereby making respondent eligible for cenvat credit and rebate on exported goods – The revenue (petitioner) argued that the additional labeling done by Respondent did not amount to manufacture and hence, they were not entitled to the cenvat credit and rebate claims – Respondent contended that the labeling activity is deemed as manufacture according to Note 3 to Chapter 18 of the Central Excise Tariff Act, justifying their claims for cenvat credit and rebate – The Supreme Court affirmed the CESTAT’s order, dismissing the revenue’s appeal and upholding Jindal Drugs Ltd.’s entitlement to cenvat credit and rebate on the duty paid – The Court reasoned that the amendment to Note 3, which replaced ‘and’ with ‘or’, broadened the scope of activities considered as manufacture, including labeling – The Court interpreted the definition of ‘manufacture’ in the Central Excise Act and the amended Note 3 to Chapter 18, concluding that labeling alone suffices as manufacture – The Supreme Court concluded that the labeling activity carried out by respondent amounts to manufacture, entitling them to cenvat credit and rebate, with no order as to costs.

May 5, 2024 sclaw

Customs & Excise

“Central Excise Dispute: Fresh Start Ordered! Court Remands Case for Tribunal to Reassess Impact of Missing Letter on Show Cause Notices” Central Excise Act, 1944 – Section 35C (2) – Orders of Appellate Tribunal – The appellant, M/S Madura Coats is involved in a legal dispute with the Commissioner of Central Excise regarding the clearance of goods without payment of duty – The case involves multiple orders and appeals, with the primary contention being the non-furnishing of a crucial letter dated 20.01.2001 – The main issue is whether the non-furnishing of the letter dated 20.01.2001 has caused prejudice to the appellant’s ability to respond to the show cause notices effectively – The appellant contends that the final order by the tribunal, which directed the respondent to furnish the letter dated 20.01.2001, is binding and its non-compliance should result in the appeals being allowed – The respondent argues that the letter dated 20.01.2001 is the appellant’s own document and its absence does not prejudice the appellant’s case – They also assert that the appellant has been delaying the adjudication process – The court affirmed the High Court’s decision to remand the matter back to the tribunal for fresh adjudication of the show cause notices, subject to the appellant demonstrating how the non-furnishing of the letter has caused prejudice – The court reasoned that the letter dated 20.01.2001 was not relied upon adversely against the appellant and that the appellant should have retained a copy of their own document – The court found that the non-furnishing of the letter did not violate principles of natural justice as it was not used to draw adverse inferences against the appellant – The appeals were disposed of with no order as to costs, and the matter was remanded back to the tribunal for fresh adjudication, with the appellant’s contentions kept open

May 5, 2024 sclaw

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