2015 (12) TMI 1608 - AT - Central Excise

Demand - Contravention of Rule 8 (1), 8(3) and 8(3A) of Central Excise Rules, 2002 and Rule 3 (4) of CCR 2004 - appellants defaulted payment of duty on consignment basis through PLA and the duty paid through cenvat credit should be treated as improper duty payment - Held that - reliance placed on the decision of the case of M/s. Malladi Drugs & Pharmaceuticals Ltd. Versus The Union of India, The Commissioner of Central Excise 2015 (5) TMI 603 - MADRAS HIGH COURT , where it was held that duty payment through cenvat credit is treated as proper duty payment - the orders of the adjudicating authority demanding duty along with interest and penalty are set aside and the appeals are allowed - decided in favor of assessee.

Summary

Issues involved:
Appeals filed against common orders, default in payment of central excise duty, contravention of Central Excise Rules, demand confirmation, penalty imposition, interest order.

Analysis:

Issue 1: Appeals against common orders
The appeals were filed against common orders by two separate entities, M/s. Faithful Engineers Pvt. Ltd. and M/s. Sri Sivasakthi Auto Ancillaries Madras Pvt. Ltd. The appeals were taken up together for disposal due to the common issue involved in both cases.

Issue 2: Default in payment of central excise duty
The appellants, manufacturers of excisable goods, defaulted in payment of central excise duty on consignment basis through P.L.A during the relevant period. Show cause notices were issued for contravention of Central Excise Rules, leading to demand confirmation by the lower authorities.

Issue 3: Contravention of Central Excise Rules
The appellants were found to have contravened Rule 8 (1), 8(3), and 8(3A) of Central Excise Rules, 2002, and Rule 3 (4) of CCR 2004 by defaulting in payment of duty on consignment basis through PLA. The duty paid through cenvat credit was considered as improper duty payment.

Issue 4: Demand confirmation and penalty imposition
The adjudicating authority confirmed the demand for excise duty on consignment basis without utilizing cenvat credit, imposed penalty under Rule 25, and ordered for interest. However, the appellants challenged these orders through their representatives.

Issue 5: Legal arguments and precedents
The representatives of the appellants relied on previous tribunal orders and judgments from the Hon'ble High Court to support their case. They highlighted the similarity of the present appeals with earlier cases where the Tribunal had ruled in favor of the appellants based on the precedents set by higher courts and tribunals.

Issue 6: Tribunal's decision
The Tribunal, after considering the arguments and legal precedents, decided to set aside the orders of the adjudicating authority demanding duty along with interest and penalty in the appeals filed by M/s. Faithful Engineers Pvt. Ltd. The appeals were allowed. In the case of appeals filed by M/s. Sri Sivasakthi Auto Ancillaries Madras Pvt. Ltd., the impugned orders of the Commissioner (Appeals) were set aside, and the appeals were allowed with consequential relief if any. All six appeals were disposed of accordingly.

This detailed analysis of the judgment highlights the issues involved, legal arguments presented, and the Tribunal's decision based on the applicable laws and precedents.