2023 (12) TMI 840 - AT - Central Excise

Entitlement to pay the duty by utilizing their Cenvat credit account during the period when asked to pay the duty consignment wise, through PLA - Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT - In this case, the Appellant has partly used Cenvat credit for discharging their duty liability during the debarred period - It is observed that the issue is no longer res integra as 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 has declared Rule 8 (3A) as ultra vires - in the case of M/S. RANA SPONGE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, BBSR-I 2023 (3) TMI 689 - CESTAT KOLKATA , by following the decision of the Hon'ble Calcutta High Court, this Tribunal has set aside the demand confirmed. The Appellant is entitled to pay the duty by utilizing their Cenvat credit account during the period when they were asked to pay the duty consignment wise, through PLA, under Rule 8(3A) of the Central Excise Rules, 2002 - the impugned order confirming the demand is not sustainable. Since, the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise. The impugned order set aside - appeal allowed.

Summary

Issues:
The appeal against the Order-in-Appeal dated 30.12.2010 passed by the Commissioner (Appeals-I), Kolkata, confirming demands of Rs.1,15,689/- and Rs.2,91,476/- including Education Cess and SHE Cess, interest, and penalty under Rule 25 of the Central Excise Rules, 2002.

Issue 1: Duty Payment Utilizing Cenvat Credit
The Appellant defaulted in duty payment during specific months and was asked to pay duty consignment wise through PLA. The Assistant Commissioner confirmed demands by invoking Rule 8(3A) of the Central Excise Rules, 2002, which was upheld by the Commissioner (Appeals). The Appellant cited the Hon'ble Calcutta High Court's decision declaring Rule 8(3A) as ultra vires and a Tribunal decision setting aside a similar demand. The Tribunal observed that the Appellant used Cenvat credit to discharge duty liability during the debarred period. Citing relevant judgments, the Tribunal held that the demand based on Rule 8(3A) cannot be sustained, allowing the appeal.

Decision:
The Appellant is entitled to pay duty using Cenvat credit during the period specified under Rule 8(3A) of the Central Excise Rules, 2002. The impugned order confirming the demand was set aside as it was not sustainable. Consequently, no interest or penalty was deemed necessary. The appeals filed by the Appellant were allowed, following the precedent set by the Hon'ble High Court and the Tribunal's decision.