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TMI Blog2024 (11) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty when in default is no more res integra and many judicial authorities have held that the provision of Rule 8(3A) of Central Excise Rules, 2002 as ultravires to the Main Act. The Hon ble Gujarat High Court in the case of INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 [ 2014 (12) TMI 585 - GUJARAT HIGH COURT ] struck down the condition in Rule 8(3A) for payment of duty without utilizing the CENVAT credit as unconstitutional and invalid. The Hon ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE CUSTOMS NASHIK II COMMISSIONERATE VERSUS M/S. NASHIK FORGE PVT. LTD. [ 2018 (9) TMI 1582 - BOMBAY HIGH COURT ] has held that Rule 8(3A) to be unconstitutional as it infringes upon the substantive right of an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 of the Central Excise Rules, 2002 in respect of Appellant-A1 and for imposition of penalty of Rs.10,00,000/- in respect of Appellant-A2. 1.2 As the issue involved in the above appeals is contravention of provisions of Rule 8(3A) of the Central Excise Rules, 2002, both the appeals are being taken up together for decision and disposal by this common order. 2.1 The above demand was consequent to an investigation conducted by the department during May 2011 wherein department alleged non-payment of excise duty within due date and belated filing of ER 1 returns during the period from October 2009 to November 2013, in as much as the removals were alleged to be non-duty paid goods in contravention of Rule 8(3A) of the Rules. A Show Cause Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014-TIOL-2211-HC]. ii. It was averred that it was only a case of belated payment of duty and there was no violation or wilful default as the entire liability was discharged during and after the investigation As there was no malafide on the part of the appellant to evade duty, as the department was fully aware of the facts, the invocation of Section 11A was not legally sustainable and in this regard reliance was placed on the ratio of decision in the case of M/s. Uniworth Textile Ltd. Vs. Commissioner of central Excise, Raipur [2013 (288) ELT 161 (SC)]. iii. It was submitted that the delayed payment of duty was on account of undue financial hardships and slowdown in the business and in these circumstances invocation of extended period was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s averred that being a case of wrong availment of CENVAT credit only CENVAT Credit Rules were applicable for invocation of penal provisions and not the penal provisions of Central Excise Act which are relevant only in cases of intentional / evading payment of excise duty relying the ratio of the decisions in the case of M/s Eicher Motor Ltd. [1999 (106) ELT 3 (SC)] and Dai Ichi Karkaria reported in [1999 (112) ELT 353 (SC)]. vii. It was submitted that the confirmation of interest was incorrect in view of the judgement in the case of Shreeji Surface Coatings Pvt. Ltd. Vs Union of India [2015 (320) ELT 764 (Guj.)]. 3. The Ld. Counsel for the Appellant reiterated the grounds of appeal and submitted that the Hon ble Tribunal in a batch of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voking the extending period and imposition of penalty is justified? 7. The main issue involved in the present appeals is whether an assessee who failed to make full payment of duty within prescribed time limit as provided under Rule 8 of Central Excise Rules, 2002 and defaulted in payment of excise duty in terms of Rule 8(1) and Rule 8(3) of the said Rules, would be bound by the provisions of Rule 8(3A) of Central Excise Rules, 2002 and whether he would be required to pay the entire default amount from his PLA account (in cash) and he is barred from making the default amount through his CENVAT Account. In the present appeals, the appellants are alleged to have defaulted in payment of duty for the month(s) of January 2010 to November 2013. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: - i. Shreeji Surface Coatings Pvt. Ltd. Vs Union of India [2015 (320) ELT 764 (Guj.)]. ii. Malladi Drugs and Pharmaceuticals Limited vs. Union of India [2015 (323) ELT 489 (Mad.)]. iii. Sandley Industries vs. Union of India [2015 (326) ELT 256]. iv. Nashik Forge Pvt. Ltd. [2019 (368) ELT 20 (Bom)] 9. We find that the issue is finally settled in favour of the Assessee in view of the stand taken by various High Courts which have already held that Rule 8(3A) of Rules, 2002 is ultra vires of Article 14 of Constitution being unreasonable, irrational, arbitrary and violative. The Gujarat High Court has struck down the aforesaid Rule in Indsur Global Limited vs. Union of India[2014 (310) ELT 833 (Guj.)], Madras High Court has done so in Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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