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TMI Blog2014 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... Wadhwa And Manmohan Singh, JJ. For the Appellant : Shri Alok Arora, Adv. For the Respondent : Shri U K Srivastava, DR PER : Archana Wadhwa It is seen that total confirmed demand of duty of Rs.88,80,952/- stand deposited by the appellant, an amount of Rs. 16.70 lakh approx. was paid out of Cenvat credit and balance is cash. The said demand stand confirmed against the appellant for violation of provisions of Rule 8(3A) of Central Excise Rules, 2002. 2. Inasmuch as the appellant have late deposited the amount in terms of said Rule, we are of the prima facie view that he is liable to pay interest. Though the said interest stand confirmed vide impugned orders, but same has not been quantified. We accordingly, direct the Revenue to quantify the interest amount and appellant to deposit the same within a period of 8 weeks from the date of quantification of interest amount is informed to the appellant. 3. As regards payment of an amount of Rs.16.70 lakhs, revenues objection was to the effect that Rs.16.70 lakhs stand deposited from the Cenvat credit whereas the same was required to be deposited from cash, is not found favour with inasmuch as there are decisions of the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pitulated. Para 4.4 and Para 4.5 of commissioner Order-in-Original indicate the material fact bringing out violation of law and foregoing right of set off from Cenvat Credit in following terms. "During the course of scrutiny of ER-1 for March 2008 to June 2008, it was observed that the noticee had defaulted in payment of duty. The notice-company submitted ER-1 along with details of duty payment. The said duty payment were got verified from the respective Bank, where the cheques and challan were tendered by the notice. However, on enquiry, it transpired that Bank was regularly returning the cheques to the notice as there was insufficient balance in the bank account. Though Bank was regularly returning the cheques to the noticee even then they kept on issuing the cheques and depositing the same in the Bank. The said practice as adopted by the noticee clearly indicates that the notice kept the Department in dark by declaring the central excise duty payment in their monthly ER-1 returns but the same was not actually paid by them. Further security of ER-1 returns and subsequent enquiry revealed that the notcee has enclosed bogus counterfoils of the cheques having stamp of Punj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow." 11. It is also observed that appellants have been indulging in fraudulent activity and have been representing to the department that due amount has been paid through cheques. However, when details were checked from concerned Banks, it was found that majority of cheques as per details indicated in table below were returned back due to insufficient balance. Some cheques as indicated in table above were not even presented to Bank. Painting a gloomy picture Revenue was defrauded. That clearly brought out intention to defraud keeping revenue department in dark. Table (A) Sl. No. Month Date of deposition as mentioned on counterfoil Cheque no. as mentioned on counterfoil Amount as mentioned on counterfoil date of return of cheque to the party as reported by the Bank Status of cheque as reported by the Bank 1. July'08 12.07.08 079924 182591.00 22.08.08 Cheques returned due to insufficient fund Cleared on 04.08.08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06000.00 05.12.08 Cheques returned due to insufficient fund Total 61,56,591 12. There is also allegation that appellant has enclosed bogus counterfoils of the cheques having stamp of Punjab National Bank branch. However, fact is that there cheques were never presented to the Bank. This act of appellants misleading was with conscious and exclusive knowing well that appellant has no funds in the Bank but intended to avail the benefit at the cost of revenue. 13. Amount of demand except Rs.16.70 lakh were paid through PLA. Interest on that amount is payable. I concur regarding payment of interest. But regarding payment of Rs. 16.70 lakhs through cenvat credit, I am not agreeable as it is against the laid down provision of Rule 8 A and specially rule 8 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh Cenvat credit which is specifically barred. In my view and latest legal position, this amount cannot be allowed to be adjusted against demand for payment though cash/current account. Matter is already clarified by Gujarat High Court as above. 18. Further fraud has also been found and it is clear that only counterfeits of Bank with stamps were produced and on enquiry, no cheques were found to be presented to Bank at all. It is on record that branch manager of the Punjab National Bank vide its letter dated 29.12.2008, inter alia, confirmed that, out of 32 cheques, only one cheque of Rs.92,700.00 (mentioned at sl. No. 4 of Table-1 given under para 1.4), had been credited to the Govt. account on 04.08.2008 whereas another 18 cheques (as mentioned at Sl.No.1,2,3,5,7 to 18,31 of Table-1 given under para 1.4) amounting to Rs. 34,37,391/- were returned due to insufficient funds. It was further intimated that the remaining 13 cheques, (mentioned at sl. No. 6 19 to 30 of the Table-1 given under para 1.4) worth Rs.26,26,500/- were never presented by the noticee in the bank at all. 19. In view of these facts, I find that intent to defraud by way of mis-representation is clearly prove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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