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2018 (12) TMI 155 - AT - Central ExciseVires of Rule 8(3A) of Central Excise Rules, 2002 - Default in payment of duty in terms of Rule 8 of Central Excise Rules, 2002 - confirmation of demands, required to be paid in cash - imposition of penalties - Held that - The Hon ble Gujarat High Court in the case of M/s Indsur Global Ltd. vs. UOI 2014 (12) TMI 585 - GUJARAT HIGH COURT has declared the provisions of Rule 8(3A) of Central Excise Rules, 2002 as unconstitutional. The said decision of the Hon ble Gujarat High Court stands followed by the Tribunal in number of cases - Subsequently the said decision of the Hon ble Gujarat High Court in the case of Indsur Global Ltd. stands considered and followed by the Hon ble Madras High Court in the case of M/s A. R. Metallurgicals Pvt. Ltd. vs. CESTAT, Chennai 2015 (5) TMI 661 - MADRAS HIGH COURT . It is noticed that though the issue has been held in favour of the assessee by the above referred decisions of various High Courts but Revenue has challenged the Hon ble Gujarat and Madras High Court s decision by filing a Special Leave Petition against the said judgment before the Hon ble Supreme Court. The SLP stands admitted by the Hon ble Supreme Court alongwith grant of stay of proceedings - Tribunal in the case of Principal Commissioner of Central Excise, Delhi vs. Space Telelink Ltd. 2017 (3) TMI 1599 - DELHI HIGH COURT has taken note of the said development of staying the proceedings by the Hon ble Supreme Court. However it stands observed that the said submission of the Revenue is fallacious because the Hon ble Supreme Court in the case of Shree Chamundi Mopeds Ltd. vs. Church of South India Trust Association 1992 (4) TMI 183 - SUPREME COURT OF INDIA has observed that an order keeping in abeyance the judgment of a Lower Court or Authority does not deface the underlying basis of the judgment itself i.e. its reasoning. Inasmuch as the issue stands decided by various decisions, the impugned orders set aside - appeal allowed - decided in favor of appellant.
Issues:
Appeal against non-payment of duty under Rule 8 of Central Excise Rules, 2002. Analysis: The appellants were found in default of payment of duty as per Rule 8 of Central Excise Rules, 2002, leading to the debarring of Cenvat credit usage and imposition of penalties. However, the Hon'ble Gujarat High Court in the case of M/s Indsur Global Ltd. declared Rule 8(3A) unconstitutional, a decision followed by various High Courts and the Tribunal. Despite Revenue's challenge in the Supreme Court with a stay order, the Tribunal noted that a stay does not negate the judgment's reasoning. The Tribunal also considered its previous decisions, granting relief to the assessee based on the Gujarat High Court's decision. Consequently, the Tribunal set aside the impugned orders against the appellants, allowing the appeals with consequential relief. Conclusion: The judgment dealt with the issue of default in duty payment under Rule 8 of Central Excise Rules, 2002, following the precedent set by the Hon'ble Gujarat High Court and other High Courts. Despite Revenue's challenge and stay order in the Supreme Court, the Tribunal upheld the decisions based on the underlying reasoning of the judgments. The appellants were granted relief, and the impugned orders were set aside, highlighting the significance of judicial precedents in similar cases.
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