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2017 (1) TMI 1604 - AT - Central ExciseConstitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - Utilization of cenvat credit for payment of excise duty for default in payment of duty - demand of duty in cash - Held that - The issue involved in the present case is no longer res integra and decided by various High Courts as well as in several decisions of the Tribunal in favor of the appellant - Tribunal in the case of M/S PIONEER LABORATORIES PVT. LTD. VERSUS CCE INDORE 2016 (10) TMI 909 - CESTAT NEW DELHI placed reliance on the decision of the case Indsur Global Ltd. vs. Union of India 2014 (12) TMI 585 - GUJARAT HIGH COURT where it was held that Condition contained in sub-rule (3A) of rule 8 for payment of duty without utilizing the cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore the portion without utilizing the cenvat credit of sub-rule (3A) of rule 8 of the Central Excise Rules 2002 shall be rendered invalid. The Rule itself has been stuck down as unconstitutional - demand do not sustain - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Demand for payment of Excise duty with interest and penalty. 2. Imposition of penalty for non-payment of duty within the specified time frame. 3. Treatment of goods cleared without payment of duty under Rule 8 of the Central Excise Rules, 2002. 4. Validity of Rule 8(3A) of the Central Excise Rules, 2002. Analysis: Issue 1: Demand for payment of Excise duty with interest and penalty The appellant, a manufacturer of medicines, failed to deposit an amount within the specified time frame, resulting in the Department demanding a sum of money for clearances made without payment of duty. The Original Authority confirmed the demand for payment of Excise duty, interest, and imposed penalties. The Commissioner (Appeals) upheld this decision, leading to the present appeals. Issue 2: Imposition of penalty for non-payment of duty within the specified time frame The appellant argued that the duty sought to be paid in cash had already been paid using the Cenvat credit account, which should be considered as a proper payment of duty. The appellant also cited various decisions supporting their stance and challenged the constitutionality of Rule 8(3A) of the Central Excise Rules, 2002. Issue 3: Treatment of goods cleared without payment of duty under Rule 8 Goods cleared during a specific period without payment of duty were treated as such under Rule 8 of the Central Excise Rules, 2002. A redemption fine was imposed on the appellant due to the unavailability of the goods for confiscation. Issue 4: Validity of Rule 8(3A) of the Central Excise Rules, 2002 The Tribunal found that the issue regarding Rule 8(3A) had been decided in favor of the appellant by various High Courts and Tribunal decisions. The Tribunal cited a specific case where Rule 8(3A) was declared unconstitutional by the Hon'ble Gujarat High Court, leading to the decision to set aside the impugned order and allow the appeals with consequential relief. In conclusion, the Tribunal set aside the impugned order and allowed the appeals based on the decisions of various High Courts and the unconstitutionality of Rule 8(3A) of the Central Excise Rules, 2002.
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