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2019 (9) TMI 1553 - AT - Central ExciseDefault in making payment of Excise Duty - bar in making use of the accumulated Cenvat Credit for making payment of Central Excise Duty during default period or not - constitutional validity of Rule 8 (3A) of the Central Excise Rules, 2002 - HELD THAT - 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. Thus, there is no bar in making use of the accumulated Cenvat Credit in making payment of Central Excise Duty even during default period - appeal allowed - decided in favor of appellant.
Issues: Alleged wrong availment of cenvat credit, contravention of Rule 8 (3) of Central Excise Rules, 2002, legality of Rule 8 (3A)
In the case, the appellant, a refractories manufacturer, was accused of wrongly availing cenvat credit and contravening Rule 8 (3) of the Central Excise Rules, 2002. The Adjudicating Authority disallowed a cenvat credit of &8377; 14,44,343/- for May 2008 and demanded &8377; 25,83,63,285/- for the period from July 2008 to March 2009, imposing a penalty as well. The appellant argued that Rule 8 (3A) was struck down by various High Courts as ultra vires, citing relevant cases. The Advocate contended that accumulated cenvat credit could be used for payment even during a default period, based on court decisions. The Department, however, mentioned that the issue was pending before the Supreme Court as they had challenged the High Court decisions. The Tribunal considered the High Court rulings and noted the Calcutta High Court's decision declaring a portion of Rule 8 (3A) as ultra vires. Consequently, the Tribunal concluded that there was no restriction on using accumulated cenvat credit for paying Central Excise Duty during a default period. As a result, the impugned order was set aside, and the appeal was allowed.
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