2023 (6) TMI 7 - AT - Central Excise

Reversal of CENVAT credit for payment of duty in terms of the provisions of Rule 8 (3A) of the Central Excise Rules 1944 - failure to deposit the duty on due date therefore in terms of the provisions of Rule 8 (3A) of the Central Excise Rules 1944 - debarred from utilizing the cenvat credit towards payment of duty - HELD THAT - The impugned issue has already been settled by various judicial pronouncement latest by this Tribunal in the case of COMMR. OF CENTRAL EXCISE-KOLKATA-IV VERSUS M/S. STAR BATTERY LTD. VICE-VERSA 2019 (4) TMI 1254 - CESTAT KOLKATA wherein the provisions of Rule 8 (3A) of the Central Excise Rules 1944 was declared as ultra vires. The observation of this Tribunal held that 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. As the issue has already been settled therefore we hold that the provisions of Rule 8 (3A) of the Central Excise Rules 1944 are ultra vires. Therefore the impugned demand is not sustainable against the appellant. Accordingly the same is set aside - appeal allowed.

Summary

Issues:
The judgment involves the issue of the demand being confirmed against the appellant for clearing old and rejected capital goods by reversing cenvat credit, leading to failure to deposit duty on due date and subsequent issuance of a show-cause notice for contravention of Rule 8 (3A) of the Central Excise Rules, 1944.

Summary:

Issue 1: Contravention of Rule 8 (3A) of the Central Excise Rules, 1944
The appellant was debarred from utilizing cenvat credit towards duty payment due to failure to deposit duty on time, resulting in the issuance of a show-cause notice. The Tribunal referred to a previous case where Rule 8 (3A) was declared ultra vires, allowing the use of cenvat credit for duty payment even during default period. Consequently, the Tribunal set aside the penalties and demand for Central Excise Duty, holding Rule 8 (3A) as ultra vires and the impugned demand not sustainable against the appellant.

Conclusion:
The Tribunal allowed the appeal, providing consequential relief to the appellant, as the issue regarding the contravention of Rule 8 (3A) of the Central Excise Rules, 1944, had been settled in favor of the appellant based on the previous judicial pronouncement.