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2011 (6) TMI 414 - AT - Central ExciseBenefit under Rule 8 of Central Excise Rules for discharge of duty liability - Short payment of duty - Held that - The appellant having paid the amount of Central Excise duty for the period August, 2006 to June, 2007 within the time, utilized the Cenvat credit availed by him under Cenvat Act cannot be said to have violate Rule 8(3) for an amount of Rs.13,287/- for the month of July, 2007. As regards the amount to be paid by the appellant for the month of February and March, 2007, it is seen from the records that the appellant had despite having the credit balance did not utilized Cenvat credit and made the payment of Rs.182,859/- for the month of February, 2007 and Rs.5,882/- for March, 2007. Both these amounts were repaid by the appellant in the month of June, 2007. Lower authorities have confirmed these demands also. The appellant having already discharged duty liability through PLA for the month of June, 2007 these demands of duty for two months from PLA needs to relooked. The violation of rule may be due to ignorance, thus remand the matter back to the adjudicating authority for the purpose of quantification of the demand of duty.
Issues:
- Appellant's liability for duty payment under Central Excise Rules - Utilization of Cenvat credit by the appellant - Default in payment for specific months - Penalty imposition by lower authorities - Adjudication of the case Issue 1: Appellant's liability for duty payment under Central Excise Rules The appellant, engaged in manufacturing, availed benefits under Rule 8 of Central Excise Rules but failed to pay the full duty amount for certain months. The appellant utilized Cenvat credit for clearance of goods, contrary to the rules. Lower authorities issued a Show Cause Notice for duty demand from August 2006 to May 2007, holding the appellant liable for duty, penalty, and interest. Issue 2: Utilization of Cenvat credit by the appellant The appellant utilized Cenvat credit for months where duty should have been paid through PLA, leading to non-compliance with Central Excise Rules. The appellate judge found the demand for the period of August 2006 to June 2007 to be harsh and disproportionate, setting it aside. Issue 3: Default in payment for specific months The appellant defaulted in paying the duty for February and March 2007 but later repaid the amounts in June 2007. Lower authorities confirmed these demands, and the judge agreed that the demands for these two months need to be reexamined, suggesting a relook at the demands from PLA. Issue 4: Penalty imposition by lower authorities The appellant argued against the penalty, citing no intention to evade duty payment, referencing previous court judgments. The judge noted the violation might be due to ignorance, remanding the matter to the adjudicating authority for quantification of the duty demand and appropriate penalty imposition. Issue 5: Adjudication of the case After considering submissions and records, the judge found that while the appellant had paid the duty for most months in time, there were errors in utilizing Cenvat credit and timely filing of returns. The judge set aside the demand for the period of August 2006 to June 2007 but upheld the demands for February and March 2007, remanding the case for further quantification and penalty imposition. The appeal was disposed of with these decisions.
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