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TMI Blog2023 (8) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... US UNION OF INDIA AND OTHERS [ 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT] wherein it has been held that we hold that Rule 8(3A) of the 2002 Rules to the extent it contains the words without utilizing the Cenvat credit is held to be arbitrary and unreasonable and is struck down. In other words, the unamended Rule 8(3A) of 2002 Rules whereby the benefit of Cenvat credit for all the period till the actual payment was made, stands disallowed in the event of a minor default also is arbitrary and unreasonable. Thus, there is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Rules2002 read with Rule 15 of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act 1944. 5. In reply to the show cause notice, the respondent has submitted that they have filed all returns from February, 2011 to November, 2011 and deposited duty and interest in terms of Sub-Rule (3) of Rule 8 of the Central Excise Rules 2002 and submitted copy of Challans as evidence. 6. After following due process, the Adjudicating Authority has dropped the demand of Central Excise duty of Rs 1,00,98,054/- simultaneously allowing Credit of Rs. 32,79,450/-. Aggrieved by the said order, Revenue has filed the present appeal. 7. Heard both the parties and perused the case records. 8. Ld. DR appearing on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued interest to the Excise Department for the defaulting period. He further submitted that they have paid the duty through PLA and interest and penalty thereon has also been paid in cash and once they have paid the duty interest and penalty, there is no default in making the payment of duty. He further submitted that the provisions of Sub Rule 3A of Rule 8 of the Central Excise Rules, 2002 which require payment of duty only through account current and prohibits payment of duty through cenvat account has been struck down as unconstitutional by the Hon'ble High Court of Gujarat, Madras and Punjab and Haryana High Court in the following decisions:- Indsur Global Ltd. vs. UOI -2014 (310) ELT 833 (Guj) Shreeji Surface Coatings P. Ltd. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Cenvat credit for all the period till the actual payment was made, stands disallowed in the event of a minor default also is arbitrary and unreasonable. It may further be noticed that the respondents had themselves realized the unreasonableness of the provisions of Rule 8(3A) of 2002 Rules and had withdrawn the words 'without utilizing the benefit of Cenvat credit' and had amended the same w.e.f. 11-7-2014 by incorporation that now a penalty shall be imposed at the rate of 1% of the defaulted amount for each month or part thereof calculated from the due date." 13. Further, we find that the Tribunal in the case of Nasik Forge Pvt. Ltd. vs. Commissioner of Central Excise has held as under:- "It is a fact that the show-cause notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, beyond what is required in the interests of the public. Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by Clause (6) of Article 19, it must be held to be wanting in that quality. 33. In the case of Om Kumar (supra), the Supreme Court recognized the applicability of the principle of proportionality in judging the validity of a provision on the touchstone of reasonableness under Article 14 of the Constitution. 36. In the result, the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the Cenvat credit till a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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