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2015 (10) TMI 1660 - AT - Central ExciseWaiver of pre deposit - Utilizaton of CENVAT Credit - interest under Section 11 AB/11AA - penalty under Section 11 AC - Held that - Though the Hon ble Madras High Court in the case of Unirols Airtex Vs. Assistant Commissioner of Central Excise (2013 (12) TMI 1398 - MADRAS HIGH COURT) has held that during the period of delay in discharge of monthly duty liability, which is beyond the period of one month from the due date, the duty is required to be paid through PLA only, without utilizing the cenvat credit, in this judgement the Hon ble High Court has not gone into the vires of this provision, while the Hon ble Gujarat High Court in its judgement in the case of Indsur Global Ltd. (2014 (12) TMI 585 - GUJARAT HIGH COURT) has gone into the question of constitutionality of the condition in Rule 8(3A) that during the period of forfeiture, the duty is required to be paid without utilizing the cenvat credit held that this provision is un-constitutional. In view of this, we are of the prima facie view that the impugned order is not sustainable and as such, the appellant have strong prima facie case in their favour. The requirement of pre-deposit of the duty demand, interest and penalty is, therefore, waived for hearing of the appeal and recovery thereof is stayed. - Stay granted.
Issues:
Delay in discharge of monthly duty liability and applicability of Section 8(3A) of the Act, constitutionality of Rule 8(3A) based on judgments of different High Courts, duty payment during forfeiture period, utilization of cenvat credit, duty demand confirmation, interest imposition, penalty under Section 11 AC of the Act, appeal against Commissioner's order, stay application. Analysis: The judgment addresses a case involving a delay in the discharge of monthly duty liability beyond one month from the due date, leading to the applicability of Section 8(3A) of the Act. The assessee forfeited the facility to pay duty on a monthly basis and utilize cenvat credit, resulting in duty payment for goods cleared during the forfeiture period without utilizing cenvat credit. The Commissioner confirmed a duty demand of &8377; 64,86,695/-, imposed interest under Section 11 AB/11AA of the Central Excise Act, and penalty under Section 11 AC of the Act, prompting the filing of an appeal along with a stay application. The appellant's counsel cited the judgment of the Hon'ble Gujarat High Court in a similar case, where the constitutionality of Rule 8(3A) was questioned, leading to a declaration of the provision as unconstitutional. This argument challenged the sustainability of the impugned order based on the precedent set by the Hon'ble Gujarat High Court in the case of Indsur Global Ltd., emphasizing the unconstitutionality of the duty payment requirement without utilizing cenvat credit during the forfeiture period. In contrast, the Departmental Representative defended the impugned order by referencing a judgment from the Hon'ble Madras High Court, which emphasized duty payment through PLA only, without utilizing cenvat credit, during a delay in discharging monthly duty liability beyond one month from the due date. However, the Madras High Court did not address the constitutionality of this provision, unlike the Gujarat High Court's stance. Upon considering both sides' submissions and the records, the Tribunal found that the Madras High Court did not delve into the constitutionality of the provision in question, unlike the Gujarat High Court. Given the conflicting judgments and the constitutional aspect raised by the Gujarat High Court, the Tribunal held a prima facie view that the impugned order was not sustainable. Consequently, the appellant was granted a waiver on the pre-deposit of duty demand, interest, and penalty for the appeal hearing, with the recovery thereof stayed, allowing the stay application.
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