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2018 (7) TMI 839 - AT - Central ExciseCENVAT Credit - failure to pay duty from PLA account - Rule 8 (3A) of the Central Excise Rules, 2002 - demand of duty with Interest and Penalties u/r 25 of the Central Excise Rules - Held that - The issue of demand raised by invoking of provisions of Rule 8 (3A) ibid came up before this Tribunal in the case of M/s R. K. Machine Tools 2018 (1) TMI 39 - CESTAT CHANDIGARH , where it was held that the demand is under Rule 8(3A) of Central Excise Rules, 2002 is not sustainable against the appellant - demand of duty with interest set aside. Demand of Penalties u/r 25 of the Central Excise Rules - Held that - Identical issue decided in the case of COMMISSIONER OF C. EX. & CUSTOMS VERSUS SAURASHTRA CEMENT LTD. 2010 (9) TMI 422 - GUJARAT HIGH COURT , where it was held that no intention on the part of the respondent assessee to evade any payment of duty, penalty could not be levied under Rule 25 of the Rules and for the alleged default, the penalty was restricted to ₹ 5,000/- in each matter under Rule 27 of the Rules - decided partly in favor of assessee. Appeal allowed in part.
Issues involved:
Appeals challenging demand of duty under Rule 8 (3A) of Central Excise Rules, 2002; Penalties imposed under Rule 25; Interpretation of judgments by High Courts and Tribunal; Applicability of stay orders on judgments; Imposition of penalty under Rule 27; Consequential relief for demand of duty and interest. Analysis: 1. Demand of Duty under Rule 8 (3A): The appeals involved a common issue of challenging the demand of duty under Rule 8 (3A) of the Central Excise Rules, 2002. Both appellants and respondents had cleared goods but defaulted in duty payment for over 30 days. The Tribunal considered precedents like Indsur Global Ltd. case and M/s R. K. Machine Tools case. The Tribunal held that the demand under Rule 8 (3A) was not sustainable, following the decision in MIs Space Telelink Ltd. case. Consequently, the demand of duty and interest was set aside for some appellants and dismissed for others. 2. Penalties under Rule 25 and Rule 27: The Tribunal discussed penalties imposed under Rule 25 of the Central Excise Rules. Citing the Saurashtra Cement Ltd. case, it held that penalties could not be levied under Rule 25. Instead, penalties were restricted to ?5,000 under Rule 27 due to financial constraints causing delayed duty payments. The Tribunal dismissed Revenue's appeals and partially allowed appeals by some appellants, limiting penalties to ?5,000. 3. Interpretation of Judgments and Stay Orders: The Tribunal analyzed the impact of stay orders on judgments, emphasizing that a stay order does not erase the legal reasoning of the original judgment. It highlighted the distinction between quashing an order and staying its operation. Relying on various High Court judgments, the Tribunal concluded that the impugned orders did not warrant interference, aligning with decisions of multiple High Courts. 4. Consequential Relief and Disposal: Following the precedents and legal interpretations, the Tribunal set aside demands of duty and interest for specific appellants while dismissing Revenue's appeals. It also restricted penalties to ?5,000 under Rule 27 for delayed duty payments. The appeals were partly allowed for some appellants and dismissed for others. Cross objections and applications for condonation of delay were also disposed of in the judgment.
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