2024 (3) TMI 688 - AT - Central Excise

Recovery of amount already discharged as duties of central excise for the period from March 2011 to July 2011 by debit of CENVAT balance - assessee had not been subjected to the requirement of rule 8(3A) of Central Excise Rules, 2002 - HELD THAT - There is a clear finding that, in view of all declarations having been made and the deficiency noted therefrom, none of the ingredients permitting imposition of penalty under section 11AC of Central Excise Act, 1944 were existent. The appeal has not controverted this finding. The impugned order also found that the stipulation on manner of payment of duty has been breached for March 2011 to July 2011 but that, in the absence of recovery mechanism in Central Excise Rules, 2002, only penal consequences may arise. This, too, has not been controverted in the appeal. It was also held that the disputed amount, as arrears of duty, was payable either by deposit or debit of CENVAT balance in much the same way as regular discharge of duty liability. The grounds of appeal put forth the unheard of, and perverse, proposition that law, in the form of Act and Rules, will always prevail over judgements; apparently, these worthies are unaware that law comprises streams which include legislated statutes and judge-rendered opinions. They also seem to be in ignorance of interpretative function which vests exclusively in the judicial institutions. If that is the comprehension of law among enforcers of an enactment that is also the author of their being, it is a saddening to those who believe in rule of law. Indeed, Montesquieu, and several of those who followed, would surely be turning over in their graves at this patent disrespect for this fundamental foundation of rule of law. The impugned order has directed that duty discharge must be accompanied by interest. There is no appeal against that part of the order - there are no reason to interfere with impugned order - appeal dismissed.

Summary

Issues Involved:
The issues involved in this case include compliance with Rule 8(3A) of the Central Excise Rules, 2002, the imposition of penalty under Rule 25 of the Central Excise Rules, 2002, the application of judicial precedents in decision-making, and the determination of duty liability and interest payment.

Compliance with Rule 8(3A) of the Central Excise Rules, 2002:
The appeal was prompted by a review under section 35E of the Central Excise Act, 1944, challenging an order regarding the recovery of central excise duties. The reviewing authority was aggrieved that the assessee had not been subjected to the requirement of Rule 8(3A) of the Central Excise Rules, 2002. The appeal contended that the reviewing authority overlooked the provisions of the law by relying solely on a precedent, thus defeating the essence of the said rule. The appellant argued that the reviewing authority failed to consider the binding nature of the precedent and the need for a contrary decision to challenge it.

Imposition of Penalty under Rule 25 of the Central Excise Rules, 2002:
The appellant raised concerns regarding the imposition of a penalty under Rule 27 of the Central Excise Rules, 2002, instead of Rule 25 as proposed in the Show Cause Notice. The appellant argued that the penalty should have been imposed under Rule 25 since the assessee intentionally avoided paying the duty. The appeal contended that any penalty should have a deterrent effect to prevent intentional acts against the law.

Application of Judicial Precedents:
The appeal highlighted the importance of judicial discipline and the binding nature of precedents. The appellant argued that the reviewing authority failed to consider that law, in the form of Acts and Rules, should prevail over judgments. The appeal contended that the reviewing authority's reliance on a single judgment without considering the provisions of the law was inappropriate.

Determination of Duty Liability and Interest Payment:
The impugned order directed that duty discharge must be accompanied by interest, and there was no appeal against this part of the order. The adjudicating authority had found that all liabilities had been discharged by the stage of adjudication, and only the imposition of penalty under section 11AC remained, along with the issue of tax liability discharge for the succeeding months. The order concluded that there was no reason to interfere with the impugned order, and the appeal was dismissed accordingly.