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TMI Blog2015 (9) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of assessee. - Appeal No. E/42/2006, Appeal No. E/640/2006 - Final Order No.41236-41237/2015 - Dated:- 16-9-2015 - Shri R. Periasami, Technical Member and Shri P.K. Choudhary, Judicial Member, JJ. For the Petitioner : Shri J. Shankar Raman, Advocate For the Respondent : Ms. Indira Sisupal, AC (AR) ORDER Per R. Periasami The Revenue appeal is filed against Commissioner (Appeals) order dt. 21.11.2005 and the assessee's appeal is filed against the order of Commissioner of Central Excise, Chennai-II. 2. After hearing both sides, we find that the issue relates to applicability of Rule 8 (3A) of Central Excise Rules on the default payment. The adjudicating authority ordered for payment of excise duty on con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A) of the Central Excise Rules,2002 is unconstitutional, totally arbitrary, irrational, oppressive and contrary to the power delegated to the rule making authority. Several facets of the challenge to the said rule was considered by a Division Bench of the Gujarat High Court in the case of Indsur Global Ltd., v. Union of India, 2014 (310) E.L.T.833 (Guj.) = 2014-TIOL-2115-HC-AHM-CX, wherein the Court declared that 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 pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon. The right to pay duty by utilising the CENVAT credit that had accrued cannot be defeated, unless it is a case of illegal or irregular credit (See the decision of the Supreme Court in Dai Ichi Karkaria Ltd., referred supra). To that extent, we find this sub-rule (3A) arbitrary and therefore violative of Article 14. The right that has accrued to an assessee by way of CENVAT credit, that is duty paid on the inputs, cannot be taken away under a rule, which only provides for the manner and method of payment of duty and for levying of interest, if there is a default. The object of the term without utilizing the CENVAT credit'' would run counter to the scheme of availment of the CENVAT credit on the duty paid inputs. It is a legitim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, 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
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