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2018 (2) TMI 543 - AT - Central ExciseDefault in payment of duty - Rule 8(3) and 8(3A of the CER 2002 - Held that - The Hon ble High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India 2014 (12) TMI 585 - GUJARAT HIGH COURT had held that the relevant portion of Rule 8(3A) relates to bar of utilization of CENVAT credit by such defaulters to be ultra vires - the appeal is allowed by way of remand to the adjudicating authority for denovo consideration.
Issues involved: Default in payment of duty beyond 30 days under Rule 8(3) and 8(3A of the Central Excise Rules, 2002; Applicability of Rule 8(3A) of the Central Excise Rules 2002; Stay order by the Hon'ble Supreme Court regarding the decision of the Hon'ble Gujarat High Court; Remand of the appeal for denovo adjudication based on the final ruling of the Hon'ble Supreme Court.
Analysis: 1. The primary issue in this case revolves around the default in payment of duty beyond 30 days, which is a violation of Rule 8(3) and 8(3A) of the Central Excise Rules, 2002. The central excise duty amount of ?4,07,52,744/- was confirmed in the adjudication proceedings, along with interest and penalty imposed under Rule 25(1)(a) of the Central Excise Rules, 2002. The Tribunal initially dismissed the appellant's appeal for non-compliance with the stay order under section 35F of the Central Excise Act, 1944. However, upon the appellant's application for restoration of the appeal, the Tribunal restored the appeal based on the directions of the Hon'ble High Court of Madras. 2. The main contention in dispute pertains to the applicability of Rule 8(3A) of the Central Excise Rules 2002. Citing the judgment of the Hon'ble High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India, it was argued that the relevant part of Rule 8(3A) concerning the bar of utilization of CENVAT credit by defaulters was deemed ultra vires. Additionally, references were made to the decisions of the Hon'ble High Court of Madras in cases such as A.R. Metallurgicals P. Ltd. Vs. CESTAT and Malladi Drugs and Pharmaceuticals Ltd. Vs. Union of India, where Rule 8(3A) was struck down. 3. During the hearing, it was brought to light that the decision of the Hon'ble Gujarat High Court in the case of Indsur Global Ltd. had been stayed by the Hon'ble Supreme Court. The Supreme Court's order, which included an interim stay of the High Court's judgment, was noted. Considering the Tribunal's past actions of remanding similar matters back to the adjudicating authority pending the final ruling of the Supreme Court, it was deemed appropriate to remand the present appeal as well. 4. Consequently, the impugned order was set aside, and the appeal was allowed for remand to the adjudicating authority for denovo consideration after the final judgment of the Hon'ble Supreme Court in the case of Union of India Vs. Indsur Global Ltd. This decision was made in line with the Tribunal's approach in similar circumstances, awaiting the outcome of the Supreme Court's ruling for further adjudication.
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