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TMI Blog2015 (8) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and also binding on this Tribunal. By respectfully following the ratio of the Hon'ble High Court orders referred to supra, we hold that demand of duty under Rule 8(3A) is unsustainable as the said Rule has been struck down by the Hon'ble High Court and the demand of duty and penalty imposed in the impugned orders is liable to be set aside - Decided in favour of assessee. - E/11/2009 - FINAL ORDER No.40847-40873/2015 - Dated:- 7-7-2015 - Shri R. Periasami and Shri P.K. Choudhary, JJ. For The Appellant : J.Shankarraman S.Ramachandran, Consultant Per R. Periasami E/342/2009, E/138/2010, E/196/2010, E/40342/2013, E/40441/2013, E/S/40512/2013 E/40724/2013, E/40985/2013, E/41068/2013 E/CO/ 41549/2013, E/41239/2013, E/41504/2013, E/41516/2013, E/42130/2013, E/40404/2014, E/40405/2014, E/40406/2014, E/40407/2014, E/40408/2014, E/41452/2014, E/40187/2015, E/490/2011, E/41387/2013, E/41388/2013, E/41398/2015, E/42334/2013, E/40680/2014, E/S/41327/2014 E/41093/2014 Appellant M/s. Texcel International Pvt. Ltd. have filed stay petition E/S/40512/2013 E/40724/2013. Since the issues involved in these 27 appeals are identical in nature relating to demand of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the Tribunal's Final Order No.1105/2010 dt.21.10.2010 reported in 2011-TIOL-201-CESTAT-MAD and allowed the writ petitions and held in favour of assessees by following its earlier orders in Malladi Drugs (supra) Pharmaceuticals and Gujarat High Court judgements cited supra. He prayed that since the Hon'ble Gujarat High Court and the Hon'ble Madras High Court have struck down the Rule 8(3A) of CER 2002, the demand, interest and penalty confirmed in the impugned orders be set aside and the appellant-assessee's appeal may be allowed. 4. The Ld. Advocates/Counsels appearing for the other appellants reiterated the same and affirmed that the issues are identical and pleaded to set aside the order in view of recent High Court order. 5. Ld. A.R for the Revenue reiterated the findings of the order and also submits that in the present appeals adjudicating authority not only invoked Rule 8(3A) but also other Rules 8(1), 8(3) and Rule 6 have been invoked and also penalty provisions have been invoked. He also submits that in some cases wherever the appellants have paid the duty amount in P.L.A subsequently cenvat credit has been allowed as re-credit. 6. After hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the CENVAT credit till an assessee pays the outstanding amount including interest is unconstitutional. To be more precise, the Court held as follows:- ''36. In the result, the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the Cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion ''without utilizing the Cenvat credit'' of sub-rule (3A) of Rule 8 of the Central Excise Rules, 2002, shall be rendered invalid.'' ... ... .... 5. It is not the case of the Department in this batch of writ petitions that the petitioners-assessees have illegally or irregularly taken the CENVAT credit. It is to be mentioned herein that sub-rule (1) of Rule 8 provides for the manner of payment of duty on the goods removed from the factory or the warehouse as provided thereunder. Sub-rule (2) of Rule 8 extends the benefit of duty to the third party purchaser, who buys the excisable goods removed by the assessee and such goods are deemed to have suffered duty of excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has not been challenged. He drew our attention to the later portion of the said decision in case of Indsur Global Ltd. (supra) in which this Court even while striking down the portion of Sub Rule (3A) of Rule 8, did not disturb the orders passed by the revenue authorities as upheld by the Tribunal, since such dispute had achieved finality. Counsel would urge that in the present case also the same course should be adopted. 6. In our opinion, however, there is vital difference between the two sets of facts. In the present case, the petitioner had raised the challenge to the statutory provisions even before the adjudicating authority had taken a final decision. He had, along with rule, also challenged the show cause notice. In the case of Indsur Global Ltd. (supra) the petitioner had unsuccessfully challenged the order of the adjudicating authority. The appeal was dismissed by the Commissioner on the ground of delay beyond his power to condone. The Tribunal had dismissed further appeal on the ground of gross delay of three years in preferring the appeal before the Tribunal as also on the ground that in any case the Commissioner was right in not entertaining the appeal of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty without utilizing the CENVAT credit till an assessee pays the outstanding amount including interest is unconstitutional and that the subsequent proceedings initiated by the Department for demanding tax were set at naught, which were followed by us in a batch of writ petitions in W.P.Nos.2506 of 2011 etc., dated 27.3.2015 (M/s Malladi Drugs Pharmaceuticals Ltd., Ranipet etc., etc., v. Union of India rep. by its Secretary, Ministry of Finance etc.) deciding the issue in favour of the assessees therein for the reasons stated therein, following the same, this civil miscellaneous appeal is allowed and the substantial questions of law are answered in favour of the assessee and against the Department. Consequently, M.P.No.1 of 2011 is closed. No costs. 7. Both Hon'ble Gujarat High Court and Madras High Court have held that condition contained in Rule 8 (3A) of Central Excise Rules 2002 for payment of duty without utilisation of cenvat credit is contrary to the scheme of availment of cenvat credit under CCR and the said Rule 8(3A) is arbitrary and violative of Article 14 of the Constitution. Accordingly, the Hon'ble High Court has struck down the Rule 8(3A) as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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