2018 (7) TMI 996 – CESTAT NEW DELHI – TMI – Default in payment of duty – Demand of duty on consignment basis without utilising CENVAT Credit – Rule 8(3A) of the Central Excise Rule, 2002 – whether during the defaulted period, the appellant was entitled to make use of the cenvat credit for discharge of duty at the time of clearance of the goods from the factory?
–
Held that:- The provision of rule 8(3A) has been the subject matter of much litigation. The Hon’ble Gujarat High Court in the case of Indsur Global Ltd. [2014 (12) TMI 585 – GUJARAT HIGH COURT] has held as ultra virus the provision of Rule 8(3A) – Similar view has been expressed by the Delhi High Court in the case of Space Telelink Limited [2017 (3) TMI 1599 – DELHI HIGH COURT]. The Delhi High Court has further held that even though the Gujarat High Court decision is stayed by the Apex Court in the appeal filed by Revenue, this does not deface the underlying basis of the judgement itself.
–
The Tribunal in the case o
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
14 respectively. The balance duty over and above what was paid through cenvat credit was paid in cash alongwith interest for such delayed payment. The Department was of the view that since the default in both the above cases continued beyond the period of 30 days, the provision of Rule 8(3A) of the Central Excise Rule, 2002 will come into play. Accordingly, Department was of the view that the appellant was required to pay duty on consignment basis without using cenvat credit on the clearances made during the period 06.06.2014 to 19.08.2014. For the goods cleared during the above period demand of duty was raised by way of show cause notice dated 06.07.2015. The original authority dropped the demand raised in the above show cause notice which was challenged before the Commissioner (Appeals) by Revenue. In the decision of Commissioner (Appeals) which is the impugned order, the demand was confirmed alongwith interest and penalty. Aggrieved by the impugned order, present appeals stand filed
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the issue in identical circumstances, in favour of the assessee in the case of Ess Ess Kay Engg. Co. Pvt. Ltd. vs. CCE, Jalandhar -2018-TIOL-744- CESTAT-CHD. Accordingly, he prayed that the impugned order may be set aside and penalty may also be set aside. 5. Ld. AR justified the impugned order. He submitted that the impugned order has been passed in terms of the provision of Rule 8(3A) of the Central Excise Rules, 2002. 6. Heard both sides and perused the appeal record. 7. The crux of the present dispute is whether during the defaulted period, the appellant was entitled to make use of the cenvat credit for discharge of duty at the time of clearance of the goods from the factory. In the impugned order, the lower authority has held that in terms of the provision of Rule 8(3A), the appellant will not be entitled to make use of such cenvat credit and hence ordered payment of duty in cash for goods cleared during the defaulted period. But, it is noted that the provision of rule 8(3A) has
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
td. and the Hon ble Delhi High Court in the case of Space Telelink Limited (supra), held that although the decision in the case of Indsur Global Ltd. has been stayed by the Apex Court but the decision of the Hon ble High Court is the law unless and until, the same is set aside, is not binding on us, therefore, the demands are to be set aside. Therefore, we hold that since utilisation of cenvat credit account, during the default period has been declared ultra vires, therefore the appellant has not violated the provisions of Rule 8(3A) of Central Excise Rules, 2002. If the availability of cenvat credit is taken into account, in that circumstances, no demand is sustainable against the appellant. Therefore, the demands confirmed by the impugned order are set aside. We further, hold that as appellant has paid the duty with a delay alongiwth interest, the payment of duty along with interest is correct and the same is confirmed. 7. In the impugned order, the goods were held liable for confisc
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =