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TMI Blog2014 (3) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... made good by them by depositing in PLA. However, as for the subsequent period they continued to clear their goods by debiting their duty from Cenvat credit account, Revenue entertained a view that in return of provisions of Rule 8, the appellant should have paid duty out of PLA instead of utilizing the Cenvat credit account. Accordingly, proceedings were initiated against the appellant resulting in confirmation of demand of Rs. 13,39,225/- along with confirmation of interest and imposition of penalty of Rs. 2,25,000/- in terms of provisions of Rule 25, Rule 26 and Rule 27. 2. For the purpose of interim stay, we find that the Tribunal has considered the said issue in number of decisions and has held that in case of default in payment of duty in terms of Rule 8, subsequent utilization of Cenvat credit for clearance of goods would result only in confirmation of demand of interest, inasmuch as there would be no Revenue loss. Reference in this regard can be made to the Tribunal's decision in the case of Solor Chemferts Pvt. Ltd. vs. Commissioner [2012 (276) ELT 273(Tri.Mum)] as also to a latest decision of Ahmedabad Bench in the case of F.S. Engineers vs. CCE, Ahmedabad [2013 (293) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court decision in the case of M/s Sarsashtra Cement 2010 (260) ELT 71 and penalty of Rs.5,000/- under rule 27 has been imposed. I concur on the account of imposition of penalty. 6. Secondly justification of duty payment consignment-wise by using Cenvat credit has also been justified. It is observed that draft decision by Member (Judicial) arrived at by relying on Tribunal's decision in Solar Chemferts Pvt. Ltd. Vs. CCE, Thane 2012 (276) E.L.T. 273 (Tri. Mumbai) and CESTAT, Ahmadabad' Bench decision in F.S. Engineers Vs. CCE Ahmadabad 2013 (293) ELT 61 (Tri. Ahmd.) wherein it has been held that utilization of Cenvat credit instead of payment of duty in cash, results in loss to the Revenue only to the extent of interest. I do not agree and record separate order. Utilization of Cenvat Credit instead of PLA (a) To appreciat payment of duty consignment-wise through utilization of Cenvat credit in respect of clearance after default in payment of duty, it is proper to refer Rule 8 and specifically rule 8(3A) of Cenvat credit rules 2002 Rule 8 (3A) provides a legal fiction according to which failure to pay duty consignment-wise through PLA shall be deemed that goods have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outstanding amount of including interest thereon: and in the event of any failure, 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. 4) The provision of section 11 of the Act shall be applicable for recovery of the duty as assessed under Rule 6 and the interest under sub-rule (3) in the same manner as they are applicable for recovery of any duty or other sums payable to the Central Government." To understand the whole issue, it is necessary to refer to brief facts. 7. The Noticee has not paid the duty on the goods removed from their factory premises for the period from April-10 to November-10, as per the returns filed by them, I find that as per the provisions of the Rule 8 of the Central Excise Rules, 2002 the duty on the goods removed from the factory during a month shall be paid by 5th day of the following month. As stated in the Notice, the Noticee was required to pay the duty by 5th day of May-10 in respect of the goods removed during the month of April-10, 5th day of June-10 in respect of the goods removed during the month of May-10,. 5th day of July-10 in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference: 9. As noticed earlier, the duty of central excise is recovered at the time of removal of the goods from the factory. Thus, as and when a consignment is cleared excise duty becomes payable thereon. However, sub-rule (1) of Rule 8 of the Rules provides a facility of fortnightly payment of duty on all goods removed from a factory or warehouse. Hence, instead of paying excise duty on each removal, by virtue of the provisions of sub-rule (1) of Rule 8, in respect of goods cleared during the first fortnight duty is required to be paid by the 20th of the said month and in respect of the goods cleared during the second fortnight by the 5th of the following month. Sub-rule (3) of Rule 8 provides for payment of interest in case of late payment of duty. Sub-rule (4) which is relevant for the present purpose provides for the consequences of non-payment of duty within the period prescribed and lays down that in case of default by the assessee in payment of any one installment beyond a period of thirty days from the due date, or in payment of installment for the third time in a financial year, the assessee shall forfeit the facility of payment of dues in installments for a period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputedly the assessee had defaulted in making payment of excise duty in terms of sub-rule (1) of Rule 8 of the Rules pursuant to which the facility for making payment on a fortnightly basis had been forfeited. The assessee was therefore, required to make payment of duty consignment-wise from the PLA only and could not have utilized Cenvat credit till the outstanding amount including the interest thereon had been paid. The assessee, however, instead of making payment from the PLA (account current), had made payment from the deemed credit in breach of the directions issued by the Deputy Commissioner in the order withdrawing the facility and thereby clearly contravened the provisions of sub-rule (4) of Rule 8 of the Rules. Legal provisions as contained in Rule 8(3A) are very clear "3A - If the assessee fails to pay the amount 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 excised duty for each consignment at the time of removal, without utilizing the CENVAT Credit till the date of assessee Pays the outstand ..... 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