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2023 (4) TMI 766 - AT - Central ExciseConstitutional Validity of Rule 8(3A) read with Rule 8(1) and Rule 8(3) of Central Excise Rules, 2002 - default in payment of Central Excise Duty - It is the submission in the grounds of appeal that the Commissioner should have appreciated that the provisions of Rule 8(3A) would apply only till the date the assessee pays the outstanding amount including the interest thereon - HELD THAT - The issue is no more res integra and is squarely covered by the judgement of the Hon ble Calcutta High Court in the case of M/S. GOYAL MG GASES PVT. LTD VERSUS UNION OF INDIA OTHERS 2017 (8) TMI 1515 - CALCUTTA HIGH COURT , wherein it is categorically held that when Rule 8 (3A) is declared ultra vires by the different High Courts then the Revenue cannot take a different stand contrary to the said judgements. The Hon ble Court further declared Rule 8(3A) as invalid which is not stayed by the Hon ble Supreme Court. The Hon ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 2014 (12) TMI 585 - GUJARAT HIGH COURT has declared the words without utilizing Cenvat Credit under Rule 8(3A) as ultra vires which means that the assessee can discharge duty by utilizing Cenvat Credit which is what exactly has been done in the instant case by the Appellant. The said judgment has been followed by the Hon ble Calcutta High Court in the case of Goyal MG Gases Pvt. Ltd. v. UOI which is not stayed by the Hon ble Supreme Court. The Hon ble Calcutta High Court in the said case, has declared the provisions of Rule 8(3A) ibid as invalid and further has held that the Revenue cannot take a different stand and parity has to be extended to the assessee - the demand in the instant case has been raised for contravention of Rule 8(3A) ibid restricting utilization of Cenvat credit during the period of default which provision has been declared ultra vires/invalid by Court, hence the demand cannot be sustained. Appeal allowed.
Issues involved: Alleged contravention of provisions of Central Excise Rules regarding duty payment and CENVAT Credit utilization.
Summary: Issue 1: Alleged contravention of provisions of Central Excise Rules The Department alleged that the assessee continued to clear excisable goods without resorting to consignment-wise payment of duty and not utilizing CENVAT Credit, with an intention to evade payment of duty. The Appellant contended that they were late in paying duty in PLA and had paid the duty for the relevant months along with interest. The Appellate Tribunal found that the Appellants had paid the entire duty through CENVAT Credit along with interest, and cited a judgment of the Calcutta High Court declaring Rule 8(3A) as invalid, which was not stayed by the Supreme Court. The Tribunal held that since the provision was declared ultra vires, the demand for contravention of Rule 8(3A) could not be sustained, and thus allowed the appeal. Issue 2: Interpretation of Rule 8(3A) and CENVAT Credit utilization The Tribunal referred to a judgment of the Gujarat High Court which declared the words "without utilizing CENVAT Credit" under Rule 8(3A) as ultra vires. The Tribunal noted that the Appellant in the present case discharged duty by utilizing CENVAT Credit, in line with the interpretation provided by the Gujarat High Court. Additionally, the Calcutta High Court had also declared Rule 8(3A) as invalid and held that the Revenue cannot take a different stand, providing parity to the assessee. The Tribunal, therefore, set aside the impugned order and allowed the appeal with consequential reliefs.
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