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TMI Blog2012 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, payment made through Cenvat credit account is a good discharge of duty liability. The exception carved out in Rule 8(3A) is that payment through Cenvat credit is not a good payment when assessee is a defaulter. This exception will last only till the default lasts. Once default is made good, the payment made through credit account becomes good payment even if paid before paying the defaulted amount - Conditional stay granted. X X X X Extracts X X X X X X X X Extracts X X X X ..... od of 30 days during which they could have paid such outstanding amount with interest. Since this was not done, they became a defaulter within the meaning of Rule 8(3A) of Central Excise Rules, 2002. As per provision of Rule 8(3A) of Central Excise Rules, 2002, when assessee is in such default, they should not have utilized Cenvat credit for payment of excise duty but they continued to utilize Cenvat credit to the extent available. 3. Revenue made out a case that the clearance from November, 2007 to September, 2008 were made without proper discharge of excise duty and issued a demand notice for Rs. 30,90,255/- along with interest and also proposed penalty under Rule 25 of Central Excise Rules, 2002. On appeal filed with the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit till the default is over. Once they have made good the default by paying defaulted amount along with interest, payment through Cenvat credit will be a good discharge of the duty liability even if paid earlier. He submits that demanding excise duty paid through Cenvat credit to be paid again has the effect of denying such benefits and there is no ground for imposing penalty equal to such amount. Therefore, the appellants pray that pre-deposit of dues may be waived for admission of the appeal and collection of dues arising from the impugned order may be stayed during pendency of the appeal. 5. The learned AR for Revenue supports the arguments given in the impugned order. 6. We have considered the arguments of both sides. We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance also, interest will be payable from the date of clearance to date of payment. 7. Further we also find that the Gujarat High Court has decided in the case of CCE v. Saurashtra Cements Ltd. - 2010 (260) E.L.T. 71 (Guj.) that in this type of situation, penalty is imposable only under Rule 27 of Central Excise Rules which is of a much lower amount. Therefore, we direct the appellant to remit the interest as explained in para 6 above and pay the same within six weeks from the date of order and report compliance on 30-4-2012. Subject to such deposit, pre-deposit of the balance dues arising from the impugned order is waived for admission of appeal and there shall be stay on collection of such dues during the pendency of the appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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