M/s Glazetech Industries Pvt. Ltd. Versus CCE & CGST, Jaipur
Central Excise
2018 (7) TMI 996 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 12-7-2018
Excise Appeal Nos. 50893 – 50894 of 2018 – Final Order No. 52494 – 52495/2018
Central Excise
Hon'ble Sh. V. Padmanabhan, Member (Technical)
Shri Arun Goyal, Advocate for the appellant
Sh. P. Juneja, AR for the respondent
ORDER
Per : V. Padmanabhan
The present appeals are filed against the Order-in-Appeal Nos. 19-20 (AK)CE/ JPR/2017 dated 22.01.2018 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur.
2. Brief facts of the case are that the appellant is engaged in the manufacture of goods falling under Chapter 76 of the First Schedule to Central Excise Tariff Act, 1985. The appellant defaulted in payment of duty for the months of April and June, 2014. The default for April and June, 2014 was cleared on 10.07.2014 and 19.08.2014 respectively. The balance duty over and above what was paid
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cate for the appellant and Sh. P. Juneja, ld. AR for the Revenue.
4. The argument advanced on behalf of the appellant is summarised below:
(i) Ld. Advocate submitted that during the period of default, the appellant was entitled to make use of this cenvat credit for payment of duty. Such view has been taken by the Hon'ble Gujarat High Court in the case of Indsur Global Ltd. vs. Union of India -2014-TIOL-2115- HC-AHM-CX. Hon'ble Gujarat High Court held as ultra virus the provision of Rule 8(3A) of the Cenvat Credit Rules, 2002. Even though the Revenue has challenged the decision of the Gujarat High Court before the Apex Court, the Delhi High Court in the case of Principal Commissioner of C. Ex. Delhi-I vs. Space Telelink Ltd. – 2017 (355) ELT 189 (Del.) has held that the principle laid down in the Gujarat High Court decision will still be applicable. By following the above two decisions, the CESTAT Chandigarh Bench has decided the issue in identical circumstances, in favour of the ass
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Gujarat High Court in the case of Indsur Global Ltd. (supra) 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 (supra). 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. By following the above decision, the Tribunal in the case of Ess Ess Kay Engg. Co. Pvt. Ltd. (supra) has already taken the view that duty demands are not justified and also the penalties. The observations of the Tribunal is reproduced below:
“6. Considering the basis of show cause notice is that during the defaulted period, the appellant has paid duty by utilizing cenvat credit account. The provisions of Rule 8(3A) have been declared ultra vires by the Hon'ble Gujarat High Court in the case of Indsur Global Ltd. and the Hon'ble Delhi High Court in the case of S
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pellant has violated the provision of Rule 8(3A) which has been declared ultra vires, in that circumstances, the credit can be utilised but under the said provisions, the goods are to be cleared on consignment wise, therefore, the goods are liable for confiscation. As the goods are not available for confiscation and not cleared under any bond, therefore, redemption fine cannot be imposed on the appellant in the light of larger bench decision in the case of Shiv Kripa Ispat Pvt. Ltd. -2009 (235) ELT 623 (Tri. LB) = 2009-TIOL-388-CESTAT-MUM-LB. Therefore, redemption fine imposed on the appellant is set aside.
8. We find that the penalties have been imposed on the appellant under Rule 25 & 26 of the Central Excise Rules, 2002. As the penalty under these rules can be imposed subject to the condition of section 11AC of the Act but the ingredients of section 11AC are missing. Therefore, the penalties under Rule 25 and 26 are not imposable on the appellant. Therefore, the penalties imposed
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