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2014 (2) TMI 772 - HC - Central ExcisePower to levy penalty for violation of CENVAT Credit Rules - Challenge to the validity of rule 13(2) of CCR 2002 and Rule 15(2) of CCR, 2004 as ultra-virus to Central Excise Act, 1994 - Delegated legislation - appellant were using non duty paid scrap for manufacturing the final product - duty paying documents obtained for availing credit without receiving Inputs - Held that:- In terms of section 37(1) and 37(4) of the Central Excise Act, 1944, the rule making authority had ample powers not only for providing for mechanism for collection of CENVAT and matters connected therewith but also to provide for penalties for breach of payment of such duty. We do not find that the rule making authority flows only from sub-section(1) of section 37 and can therefore, be stated to be general in nature without clothing the rule making authority with the power to levying penalty. As noticed section 11AC provides for penalty in case of unpaid duty by reason of fraud or collusion or any wilful mis-statement, etc., Such duty in terms of CENVAT Credit Rules, 2004, would be the central value added tax - we do not find any substance in the challenge raised by the petitioner to the rule 13(2) of the CENVAT Credit Rules, 2002 and rule 15(2) of the CENVAT Credit Rules, 2004 - Decided against Applicant.
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