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2019 (4) TMI 1340 - AT - Central ExciseBar on utilization of CENVAT Credit - default in making payment of Central Excise Duty - 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. There is no bar in making use of Cenvat Credit in making payment of Central Excise Duty even during default period, in view of the fact that the Rule 8 (3A) ibid which steps otherwise, has been struck down as ultra vires. The portion of the order imposing penalties as well as demand for Central Excise Duty is set aside - appeal disposed off.
Issues:
1. Restoration of appeal against Order-in-Original dated 25.11.2008. 2. Default in payment of Central Excise Duty by the appellant. 3. Validity of making payment through CENVAT Credit account. 4. Interpretation of Rule 8 (3A) of the Central Excise Rules, 2002. 5. Applicability of High Court decisions on the demand of duty. Analysis: 1. The appeal (E/76/2009) was filed against Order-in-Original No.10/Commissioner/CE/Kol-IV/2008 dated 25.11.2008, which was dismissed for failure to make a pre-deposit ordered by the Tribunal. The appellant filed a Misc. Application for restoration of the appeal, which was allowed, and the appeal was restored to its original number. 2. The appellant, engaged in the manufacture of furnace and ovens, defaulted in paying Central Excise Duty in October and November 2005. The entire defaulted amount was paid later, but a dispute arose regarding the mode of payment. The Revenue contended that duty should be paid in cash on a consignment to consignment basis, while the appellant argued that payment through CENVAT Credit should be considered valid. 3. The appellant's position was that payment through CENVAT Credit should be accepted as valid duty payment. The Revenue, citing Rule 8 (3A) of the Central Excise Rules, 2002, insisted on cash payment during default periods. The appellant challenged this interpretation. 4. The Tribunal noted that Rule 8 (3A) has been declared ultra vires by various High Courts, including Gujarat, Punjab & Haryana, and Madras. The Calcutta High Court also followed the Gujarat High Court's decision, holding the relevant portion of the rule as ultra vires. Consequently, the Tribunal concluded that accumulated CENVAT Credit could be used for duty payment even during default periods. 5. As a result, the impugned order demanding duty payment in cash was set aside, and the appeal was allowed based on the interpretation of Rule 8 (3A) and the applicability of High Court decisions. The Tribunal's decision aligned with the rulings of various High Courts, emphasizing the legality of using CENVAT Credit for duty payment during default periods.
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