2015 (6) TMI 261 - AT - Central Excise

Rectification of mistake - Tribunal held that when there is a default in payment of excise duty which continues for a period beyond thirty days from due date then the assessee has to pay excise duty on each consignment at the time of removal without utilising the Cenvat credit till the date the assessee pays the outstanding amount including interest thereon envisages under Rule 8(3A) of the Central Excise Rules, 2002 - Held that - Supreme Court has not passed any law stating that Rule 8(3A) of Central Excise Rules, 2002 is ultra vires. It is only the Gujarat High Court 2014 (12) TMI 585 - GUJARAT HIGH COURT which has taken that particular view. This view of the Gujarat High Court is also contrary to the decision of the Hon ble Karnataka High Court 2013 (4) TMI 534 - KARNATAKA HIGH COURT and the Madras High Court 2013 (12) TMI 1398 - MADRAS HIGH COURT wherein it has been held that in case of default in payment of duty within due date and the defaults continues for a period beyond thirty days from the due date, the utilisation of Cenvat credit is nullity in law and therefore, the duty liability has to be discharged on the subsequent clearance in cash. Further in the Kashmi Conductors case cited 1997 (7) TMI 186 - CEGAT, COURT NO. II, NEW DELHI , another Large Bench of this Tribunal has held that the decision of a High Court is applicable only within the jurisdiction and not outside the jurisdiction. In these circumstances, we are not inclined to agree with the contentions raised by the appellant. - Adjudicating authority has committed an error and therefore, we remanded the matter back to the adjudicating authority for fresh consideration and to pass an order in accordance with the law. Therefore, such a direction canoe be said to be a mistake or an error apparent on the face of the record. - Rectification denied.

Summary

Issues:
Rectification of mistake in the final order passed by the Tribunal regarding the payment of excise duty and utilization of Cenvat credit.

Analysis:
The Tribunal's final order stated that if there is a default in excise duty payment beyond thirty days, the assessee must pay the duty in cash without utilizing Cenvat credit, based on decisions by the Karnataka and Madras High Courts. The matter was remanded due to the adjudicating authority's failure to follow this law. The appellant argued for rectification citing the Gujarat High Court's ruling that Rule 8(3A) is ultra vires, but the revenue contended that the Tribunal's decision was based on the Karnataka and Madras High Court decisions and that the Gujarat High Court's ruling was challenged in the Apex Court. The Tribunal found no merit in the rectification request, as the Supreme Court had not declared Rule 8(3A) ultra vires, and the Gujarat High Court's view contradicted the decisions of other High Courts.

Regarding the contention that the Tribunal exceeded the scope of the show-cause notice and adjudication order, the Tribunal clarified that it interpreted the law based on the Karnataka and Madras High Court decisions. The Tribunal remanded the matter to rectify the error made by the adjudicating authority, which did not constitute a mistake on the face of the record. The Tribunal dismissed the rectification application, stating that the direction given was not an apparent error.

In conclusion, the Tribunal rejected the rectification application, emphasizing that the decision was based on existing High Court rulings and that the Gujarat High Court's view did not invalidate the Tribunal's decision. The Tribunal maintained that its interpretation of the law and the subsequent remand were not errors on the face of the record.