2015 (10) TMI 1831 - AT - Central Excise

Denial of CENVAT Credit - Held that - The appellants are discharging duty on monthly basis under Rule 8 of Central Excise Rules, 2002. There was a delay in discharging of duty on monthly basis. The appellant paid duty partly from CENVAT account during the defaulted period. By the impugned order, the Adjudicating Authority disallowed the utilization of the amount from CENVAT account during the period from 05.07.2010 to 29.09.2010 in terms of provisions of Rule 8(3A) of Central Excise Rules, 2002 and confirmed the demand of duty along with interest and imposed penalty for not paying the amount by cash from PLA. We find that the Hon ble Gujarat High Court in the case of Indsur Global Ltd Vs Union of India - 2014 (12) TMI 585 - GUJARAT HIGH COURT held that the portion without utilizing the CENVAT Credit of sub-rule (3A) of Rule 8 of Central Excise Rules, 2002, shall be rendered invalid. - impugned order is not sustainable. The impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of utilization of amount from CENVAT account during a specified period under Rule 8(3A) of Central Excise Rules, 2002.
2. Validity of the portion "without utilizing the CENVAT Credit" of sub-rule (3A) of Rule 8 of Central Excise Rules, 2002 based on a decision of the Hon'ble Gujarat High Court.

Analysis:
1. The appellants were involved in manufacturing excisable goods and discharging duty on a monthly basis under Rule 8 of Central Excise Rules, 2002. Due to a delay in discharging duty, the appellant paid duty partly from the CENVAT account during a specific period. The Adjudicating Authority disallowed this utilization of the amount from the CENVAT account during the mentioned period, citing Rule 8(3A) of the Central Excise Rules, 2002. However, referring to a decision of the Hon'ble Gujarat High Court in a related case, it was held that the portion "without utilizing the CENVAT Credit" of sub-rule (3A) of Rule 8 shall be rendered invalid. Consequently, the impugned order disallowing the utilization of CENVAT credit was deemed unsustainable, and the appeal was allowed with consequential relief.

2. The judgment further addressed the issue of payment of interest by the appellant for each consignment at the time of removal of goods. The Revenue contended that duty was not paid for each consignment at the time of goods removal, making the appellant liable to pay interest. The Tribunal ruled that the appellant must pay excise duty for each consignment at the time of goods removal until the outstanding amount, including interest, is paid. The Revenue was granted the liberty to demand interest, if applicable, in accordance with the law.

This judgment by the Appellate Tribunal CESTAT AHMEDABAD highlights the importance of adhering to legal provisions regarding the utilization of CENVAT credit and the timely payment of excise duty, as well as the significance of judicial decisions in interpreting and applying relevant rules and regulations in excise matters.