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TMI Blog2013 (9) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... d on Manipal Springs Ltd. (supra). Therefore no penalty under Rule 25 of the Central Excise Rules and under Section 11AC of Central Excise Act, 1944 is attracted in the case. Decided in favor of Assessee. - E/771/12 - A/10463/WZB/AHD/2012 - Dated:- 28-3-2013 - H K Thakur, J. For the Appellant : Shri N K Oza, Adv. For the Respondent : Shri P N Sarvaiya, AR. Per: H K Thakur: This is an appeal filed by the appellant against OIA No. 188/2012(Ahd-II)CE/AK/Commr(A)/Ahd, dt.23.07.12 under which the order in original dated 9.8.11 has been upheld. The issue involved in this case is that during the course of an audit of the appellant it was found that appellants have defaulted in payment of central excise duty of Rs.3,76,855/- for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise Rules. The main point thus required to be decided is whether payment made through cenvat credit during the default period instead of making the payment in cash invites recovery of duty and imposition of penalties. Rule 8(3A) of the Central Excise Rules is reproduced below: "Rule8(3A) If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notwithstanding anything contained in said sub-rule (1) and sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004. the assessee shall, pay excise duty for each consignment at the time of removal, without utilizing the CENVAT credit till the date the assessee pays the outstanding amount including interest thereon; and in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty will have to be paid and goods are liable to confiscation. In fact there is nothing in the Act which will bar payment of such short paid duty from Cenvat credit. Once the Act and Rule 8(3A) are read together a harmonious interpretation will be that during the period of default, payment through Cenvat credit will not be due discharge of duty. Interest will be payable so long as there is no proper discharge of duty. This is a consequence from Act but that will follow even if it is not mentioned in the Rules. That is to say duty paid during the defaulting period will be proper discharge once the default in payment from PLA, for the month of Dec 2006 in this case, is made good and applicable interest is paid. With the result the only co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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