2018 (2) TMI 214 - AT - Central Excise

Constitutional validity of Rule 8(3A) of Central Excise Rules, 2002 - utilisation of cenvat credit and default in payment of duty - whether the provisions of Rule 8(3A) of the Central Excise Rules 2002, are invocable in the facts of the case or not? - Held that - The said issue has been decided by the Hon ble High court of Gujarat in the case of Indsur Global Ltd. 2014 (12) TMI 585 - GUJARAT HIGH COURT wherein it has been held that the provisions of Rule 8(3A) of the Central Excise Rules, are ultra virus - the demand is under Rule 8(3A) of Central Excise Rules, 2002 is not sustainable against the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Rule 8(3A) of Central Excise Rules, 2002 in the case.

Analysis:
The appellant appealed against an order demanding duty under Rule 8(3A) of Central Excise Rules, 2002 for delayed payment of excise duty. The appellant had cleared goods and paid duty partially from Cenvat account and PLA, resulting in a balance amount due. The appellant paid the outstanding amounts after delays, leading to demands and proposed confiscation of goods. The issue revolved around the applicability of Rule 8(3A) in the case.

The appellant contended that the provisions of Rule 8(3A) were ultra vires, citing a decision by the Hon'ble High Court of Gujarat in the case of Indsur Global Ltd. The High Court of Delhi in the case of M/s Space Telelink Ltd. observed that a stay order does not erase the underlying reasoning of a judgment. Based on this, the court held that the demand under Rule 8(3A) was not sustainable against the appellant, leading to the setting aside of the impugned order. The decision aligned with previous judgments from various High Courts, resulting in the dismissal of the appeals and allowing relief for the appellant.

In conclusion, the judgment delved into the interpretation of Rule 8(3A) of Central Excise Rules, 2002 in the context of delayed duty payment by the appellant. The court's analysis considered the legality of the rule based on precedents and ultimately ruled in favor of the appellant, setting aside the demand under Rule 8(3A) and allowing the appeal with any consequential relief.