2019 (2) TMI 750 – CESTAT HYDERABAD – TMI – Imposition of Penalty u/r 25(1)(a) of Central Excise Rules – Default in payment of central excise duty – amount of duty not paid within 30 days from the due date as required – Rule 8 (3A) of Central Excise Rules, 2002 – Held that:- Hon’ble High Court of Gujarat in the case of Indsur Global Limited vs. Union of India [2014 (12) TMI 585 – GUJARAT HIGH COURT] has struck down this Rule and the judgment of Hon’ble High Court of Gujarat has been stayed by Hon’ble Supreme Court. The Hon’ble High Court of Delhi in the case of Space Telelink Limited [2017 (3) TMI 1599 – DELHI HIGH COURT] held that the ratio of the judgment of Hon’ble High Court of Gujarat would still apply notwithstanding the fact that it has been stayed by Hon’ble Apex Court. It has been held that only the operation of the judgment is stayed and not the underlying basis of the judgment itself – the penalty imposed under Rule 25(1)(a) of Central Excise Rules for contravention of Rule
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terms of Rule 8 (3A) of Central Excise Rules, 2002, they are required to pay duty in respect of clearances after this 30 days grace period consignment wise and through PLA. The said Rule 8 (3A) prohibits use of CENVAT Credit for clearances made after the grace period of 30 days. The quantity of goods so removed was 139.55 M.Ts valued at ₹ 40,81,467/- involving a duty of ₹ 2,16,773/-. Apart from the above, the appellants also availed CENVAT Credit twice on the same invoice amounting to ₹ 4,620/-. 2. Initially the Superintendent issued a show cause notice which was contested by the appellant on the ground of lack of jurisdiction of the Superintendent. The Commissioner (Appeals) remanded the matter back to the Asst. Commissioner of Central Excise, Kakinada for adjudication, who imposed a penalty of ₹ 50,000/- on the appellant under Rule 25(1)(a) of Central Excise Rules, 2002 for contravention of Rule 8(3A) of Central Excise Rules and imposed a penalty of ₹ 2,
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io of the judgment would still apply and Rule 8(3A) of Central Excise Rules, 2002 will continue to be inoperative. In support of his argument on this point, he relied on the order of the Tribunal Delhi in the case of GEI Industrial System Limited vs. CCE, Bhopal [2016(11)TMI 227- CESTAT New Delhi] and Space Telelink Limited [2017(3)TMI 1599 – Delhi High Court]. In both these judgments, it has been held that staying of an order of the judgment by a lower Court or authority does not deface the underlying basis of the judgment itself i.e. its reasoning and therefore the ratio would still apply. Both these cases were on the specific point whether the judgment of Hon ble High Court of Gujarat in the case of Indsur Global Limited striking down Rule 8(3A) of Central Excise Rules, 2002 would apply considering the same has been stayed by Hon ble Supreme Court. On the second issue of penalty of ₹ 2,000/- imposed under Rule 15(1)(a) of CENVAT Credit Rules, 2004 for availing the CENVAT Credi
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dgment is stayed and not the underlying basis of the judgment itself. 6. In view of the above, I find that the penalty imposed under Rule 25(1)(a) of Central Excise Rules for contravention of Rule 8(3A) is liable to be set aside and I do so. As far as the penalty of ₹ 2,000/- imposed for availing the CENVAT Credit twice on the same invoice is concerned, I agree with the appellant that the amount involved is small but find that the penalty is equally small and commensurate with the violation of CENVAT Credit Rules, 2004 and therefore I find there is no reason to interfere with this part of the order. 7. In view of the above, I pass the following order. The impugned order is modified to the extent of setting aside the penalty imposed under Rule 25(1)(a) of Central Excise Rules, 2002 for contravention of Rule 8(3A) of Central Excise Rules, 2002. (Pronounced in open court on 25.01.2019) – Case laws – Decisions – Judgements – Orders – Tax Management India – taxmanagementindia – taxm
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