9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2197 - AT - Central ExciseDenial of Cenvat Credit - Duty paid through PLA - Rule 8(3A) - Held that - As Rule 8(3A) of Central Excise Rules, 2002 has been declared unconstitutional, consequently proceedings against the appellant are not sustainable. Further I find that appellant has contravened the provisions of Central Excise Rules, 2002, therefore, general penalty under Rule 27 of Central Excise Rules, 2002 is imposable. Therefore, I impose penalty under Rule 27 of Central Excise Rules, 2002 on the main appellant i.e. M/s. Space Telelink Ltd. of ₹ 5,000. Further, I hold that the Managing Director has not contravened, penalty on Managing Director are set aside. - Relying on Decision of Indsur Global Ltd. 2014 (12) TMI 585 - GUJARAT HIGH COURT - Decided partly in favour of assessee.
Issues:
Denial of Cenvat Credit and confirmation of penalties on the main party and Director. Analysis: The case involved the denial of Cenvat Credit and confirmation of penalties on the main appellant and Director for defaulting in making payment of Excise duty within 30 days and utilizing Cenvat Credit account for payment of Central Excise duty, which was deemed unauthorized under Rule 8(3A) of the Central Excise Rule, 2002. Three show cause notices were issued to the appellant, leading to the denial of Cenvat credit and imposition of penalties by both lower authorities. The main contention was the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, with the appellant citing the decision of the Hon'ble Gujarat High Court in a similar case. The appellant argued that procedural lapses warranted a penalty under Rule 27 of the Central Excise Rules, 2002, up to a maximum of Rs. 5000, and not on the Director. The appellant also referenced a previous Tribunal decision supporting their entitlement to Cenvat credit and a penalty of Rs. 5000 under Rule 27. The respondent, however, opposed the appellant's arguments, citing various High Court decisions upholding contraventions under Rule 8(3A) of the Rules, 2002. The respondent emphasized the decisions of High Courts and this Tribunal, maintaining the validity of the Rule and the consequences for non-compliance. The respondent also highlighted the pending challenge to the Gujarat High Court decision before the Supreme Court, indicating the issue's uncertainty. After hearing both parties, the Tribunal considered the case law presented by the respondent but ultimately relied on the Gujarat High Court's decision in declaring Rule 8(3A) unconstitutional. Consequently, the Tribunal held that the proceedings against the appellant were not sustainable due to the Rule's invalidity and imposed a general penalty of Rs. 5000 under Rule 27 on the main appellant while setting aside the penalty on the Managing Director. In conclusion, the Tribunal allowed the appellant to avail Cenvat Credit, confirmed a penalty of Rs. 5000 on the main appellant under Rule 27, and set aside the penalties on the Managing Director. The appeals were disposed of accordingly, aligning with the Gujarat High Court's decision on the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002.
|
