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2019 (11) TMI 1620 - AT - Central ExciseDefault in making payment of duty - amount required to be paid in cash, was not paid by the due date - case of Revenue is that during the default period, the appellant was required to make payment of Central Excise duty on consignment to consignment basis, only in cash, without making use of the credit accumulated in the Cenvat account - Rule 8 (3A) of the Central Excise Rules, 2002 - HELD THAT - The provisions of Rule 8 (3A) of the Central Excise Rules, 2002, based on which the demand for duty has been raised by the Department has been struck down by the various High Courts as ultra vires - the Jurisdictional High Court at Calcutta, in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA OTHERS 2017 (8) TMI 1515 - CALCUTTA HIGH COURT has followed the decision of the Gujarat High Court in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 2014 (12) TMI 585 - GUJARAT HIGH COURT and has held the portion of rule 8 (3A) as ultra vires. There is no bar in making use of the accumulated Cenvat Credit in making payment of Central Excise Duty even during default period - Appeal dismissed - decided against Revenue.
Issues:
Appeal against Order-in-Appeal for non-payment of Central Excise duty using Cenvat Credit; Applicability of Rule 8(3A) of Central Excise Rules, 2002; Validity of demand for duty in cash during default period; Interpretation of various High Court decisions on Cenvat Credit usage during default. Analysis: The case involved an appeal against Order-in-Appeal No.338/HWH/CE/2017-18 concerning the non-payment of Central Excise duty by an assessee utilizing Cenvat Credit. The appellant, engaged in manufacturing excisable goods, failed to pay the balance amount in cash by the due date, leading to default in duty payment. The Revenue contended that duty should have been paid in cash during the default period, without using the accumulated Cenvat Credit. The Show Cause Notice invoked Rule 8(3A) of the Central Excise Rules, 2002, proposing cash payment for duty already debited from the Cenvat Credit account. The adjudicating authority confirmed a demand of &8377; 17,80,183/- along with interest and penalty. On appeal, the lower authority allowed the appeal, prompting the appellant department to challenge the decision. In the absence of the respondent, the appeal was taken up for disposal with the consent of the Authorized Representative. The Authorized Representative argued that various High Courts had deemed Rule 8(3A) ultra vires, with the matter pending before the Supreme Court. The Tribunal reviewed these decisions and found that the Rule had been struck down by multiple High Courts, allowing the use of Cenvat Credit for duty payment during default. Citing specific High Court cases like Indsur Global Ltd. v. Union of India and Goyal MG Gases Pvt. Ltd. v. Union of India, the Tribunal concluded that there was no prohibition on utilizing accumulated Cenvat Credit during a default period. Following the decisions of the Jurisdictional High Court and the Gujarat High Court, the Tribunal upheld the Impugned Order, dismissing the appeal filed by the appellant Revenue. In summary, the Tribunal ruled in favor of the assessee, confirming the legality of using Cenvat Credit for Central Excise duty payment even during a default period, based on the striking down of Rule 8(3A) by various High Courts. The decision aligned with the interpretations of relevant High Court judgments, ultimately dismissing the appeal brought by the appellant Revenue.
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