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TMI Blog2023 (6) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... le Bombay High Court has in the case of TWENTY FIRST CENTURY WIRES RODS LTD., AND M/S. SEJAL GLASS LTD. [ 2019 (6) TMI 683 - BOMBAY HIGH COURT] has held Once Rule 8(3A) of the said Rules has been declared as unconstitutional to the extent it prohibited utilizing Cenvat credit, the discharge of payment of duty on the final products, the said provision to the above extent ceases to apply. The Act and the said Rules being all India in its application, the decision rendering a part of it as unconstitutional would equally apply within the State of Maharashtra, in the absence of any contrary view or the appellant showing that the view of the Gujarat High Court in Indsur Global Ltd. is ex-facie unsustainable. In view of the above decisions of Hon ble High Court there are no merits in the impugned orders and the same is set aside - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1944. (iv) I order payment of Interest at the appropriate rate, on the above said wrongly utilized Cenvat Credit and to be recovered from M/s. Hatkesh Chemicals & Pharmaceuticals Pvt. Ltd under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. (v) I impose Penalty of Rs. 70,92,658/- (for Differential Central Excise duty not paid) on M/s. Hatkesh Chemicals & Pharmaceuticals Pvt. Ltd, Plot No R- 83B, & Plot No R-865 as per the provisions of Rule 25 of the Central Excise Rules, 2002. (vi) I impose Penalty of Rs 1,25,12,073/- (for wrong utilization of inadmissible Cenvat Credit for payment of duty during the defaulting period) on M/s. Hatkesh Chemicals & Pharmaceuticals Pvt. Ltd, Plot No R-83B, & Plot No R- 865 as per the provisions of Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. (vii) I impose Penalty of Rs. 25,00,000/- on M/s. Hatkesh Chemicals & Pharmaceuticals Pvt. Ltd for contravention of Rule 4, and Rule 8 of the Central Excise Rules, 2002 under the provisions of Rule 25 of the Central Excise Rules, 2002. (viii) I impose Penalty of Rs. Rs. 25,00,000/- on ShriParesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )] of the Central Excise Act,1944 on the evaded duty at (i) above and the amount of Rs.39,995/- [Plot No W-359 = Rs 20,134/ + Plot No R- 420 = Rs 19,861/-] already deposited is appropriated towards Interest on the Central Excise duty on the goods removed without payment duty. iii) I order that the Cenvat Credit wrongly utilized by M/s. SMCIPL amounting to Rs. 25,39,609/-, during the period from September 2007 to January 2009 in respect of Plot No R-83A and Rs. 6,84,260/- during the period from September, 2009 to November 2009 in respect of Plot No W-359 and Rs. 7,59,971/- during the period from April, 2009 to October 2009 in respect of Plot No R-420 [total Rs 39,83,840/-] should not be recovered through PLA from M/s. Shree Mantralayam Chemical Industries Pvt. Ltd under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A (1) of Central Excise Act, 1944. (iv) I order payment of Interest at the appropriate rate, on the above said wrongly utilized Cenvat Credit and to be recovered from M/s. Shree Mantralayam Chemical Industries Pvt. Ltd under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. (v) I impose Penalty of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment has framed the Central Excise Rules, 2002. Rule 4 of the said Rules pertains to duty payable on removal. Sub-rule (1) thereof provides that every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in Rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place where they are produced or manufactured or from a warehouse unless otherwise provided. Rule 5 of the Central Excise Rules, 2002, pertains to date of determination of duty and tariff valuation. Sub-rule (1) thereof provides the rate of duty or tariff value applicable to any excisable goods other than khandsari molasses shall be the rate or value in force on the date when such goods are removed from a factory or a warehouse, as the case may be. As per rule 6, an assessee has to himself assess the duty payable on any excisable goods. As per Rule 7, if an assessee is unable to determine the value of excisable goods or determine the rate of duty applicable, he may request the Assistant Commissioner of Central Excise or the Deputy Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty for each consignment at the time of removal, without utilizing the CENVAT credit till the date the assessee pays the outstanding amount 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." As per this sub-rule, in case of an assessee who has defaulted in payment of duty beyond thirty days from the due date, has to pay excise duty for each consignment at the time of removal without utilizing the Cenvat credit till he pays the outstanding amount including interest. In the event of failure, it would be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in the rules would follow. 20. We may record that sub-rule (3A) which was introduced with effect from 1-6-2006 has since been substituted by notification, dated 11th July 2014 and the current applicable sub-rule (3A) reads as under : "(3A) If the assessee fails to pay the duty declared as payable by him in the return within a period of one month from the due date, then the assessee is liable to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us duties paid on the inputs which may either be raw material or capital goods in the manner provided in the said rules. In this context, sub-rule (3A) of Rule 8 makes two fold departure in case of an assessee who has been unable to pay the duty by the due date and such default continues for a further period of 30 days from the due date. If an assessee who was required to pay the entire months of excise duty by the 5th or 6th of the following month, does not do so for a further period of 30 days, the unpleasant consequences envisaged in sub-rule (3A) would follow. Such consequences would be that he would no longer enjoy the facility of payment of excise duty on monthly basis and he would have to clear each consignment on actual payment of duty and secondly that he would not be entitled to avail of Cenvat credit for such purpose. 27-11-2014 24. We may recall that the petitioner has challenged only that portion of sub-rule (3A) of Rule 8 which requires a defaulter to clear the finished product on payment of excise duty without availing the Cenvat credit. We may consider the petitioner's challenge to the vires of such rule in the background of the statutory scheme. Before doing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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