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2019 (6) TMI 683 - HC - Central ExciseBar on utilization of CENVAT Credit on payment of excise duty - vires of Rule 8(3) of CER - Whether the Tribunal was justified in holding that the respondent during the default period can pay its excise duty liability on its final products through its Cenvat account and not only through its PLA in the face of Rule 8(3) of the said Rules? HELD THAT - Once Rule 8(3A) of the said Rules has been declared as unconstitutional to the extent it prohibited utilizing Cenvat credit, the discharge of payment of duty on the final products, the said provision to the above extent ceases to apply. The Act and the said Rules being all India in its application, the decision rendering a part of it as unconstitutional would equally apply within the State of Maharashtra, in the absence of any contrary view or the appellant showing that the view of the Gujarat High Court in Indsur Global Ltd. 2014 (12) TMI 585 - GUJARAT HIGH COURT is ex-facie unsustainable. The question as proposed does not give rise to any substantial question of law. Thus, not entertained. Both the appeals are dismissed.
Issues:
Challenge to Tribunal's order under Section 35G of the Central Excise Act, 1944 regarding excise duty payment through Cenvat account instead of PLA as per Rule 8(3) of the Act. Analysis: The High Court heard two appeals challenging the Tribunal's order regarding excise duty payment through a Cenvat account instead of PLA under Rule 8(3) of the Central Excise Act, 1944. The Revenue questioned the Tribunal's decision on whether the respondent could pay excise duty on final products through Cenvat account during the default period. An identical issue was previously dismissed by the High Court. The respondent, a manufacturer of copper tubes, defaulted in paying excise duty as per Rule 8(1), triggering Rule 8(3) which restricts Cenvat credit utilization for duty payment. Despite default, the respondent continued clearing goods using Cenvat credit. Show-cause notices were issued, confirmed by authorities, and appealed. The Tribunal allowed the appeal following the Gujarat High Court's decision that Rule 8(3A) was unconstitutional, permitting Cenvat credit use. The Revenue argued the impugned order lacked reasoning and cited a pending appeal before the Supreme Court challenging the Gujarat High Court's decision. The High Court noted the unconstitutionality declaration of Rule 8(3A) by the Gujarat High Court, making it inapplicable. Referring to precedents, the High Court upheld the Tribunal's decision, stating that until a contrary decision by a competent High Court, the ruling stands. The High Court dismissed the appeals, emphasizing that filing an appeal does not stay the previous ruling's effect. The High Court found no distinguishing features justifying a different view in these cases. The Court acknowledged a previous order related to a similar issue adjourned for the Supreme Court's decision on the Gujarat High Court's ruling. Despite not being informed of this order initially, the High Court examined the issue on merits and passed a final order. Given the previous order's decision on the issue, the High Court followed the same and disposed of the present appeals accordingly. Both appeals were ultimately dismissed based on the reasons provided in the judgment.
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