TMI Blog2012 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... t payment through Cenvat credit is not a good payment when assessee is a defaulter. This exception will last only till the default lasts. Once default is made good, the payment made through credit account becomes good payment even if paid before paying the defaulted amount - Conditional stay granted. - E/2124/2011 - Stay Order No. 355/2012-EX(BR)(PB) - Dated:- 8-2-2012 - Ms. Archana Wadhwa and Shri Mathew John, JJ. Shri Bipin Garg, Advocate, for the Appellant. Shri S.K. Panda, Jt. CDR, for the Respondent. ORDER The appellants were manufacturers of excisable goods and they were expected to pay excise duty payable for each calendar month before the 5th of the next calendar month as per the provision of Rule 8 of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 20-9-2008 10 August, 08 17794 339800 357594 22-10-2008 11. September 08 21230 113100 134330 22-10-1998 Total 984355 2105900 3090255 2. Taking the example of December, 2007, the duty payable for December, 2007 should have been paid by 5th January 2008 and there was further grace period of 30 days during which they could have paid such outstanding amount with interest. Since this was not done, they became a defaulter within the meaning of Rule 8(3A) of Central Excise Rules, 2002. As per provision of Rule 8(3A) of Central Excise Rules, 2002, when assessee is in such default, they should not have utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, he confirmed that the demand of Rs. 9,84,355/- is to be paid through PLA. Further he also increased the penalty amount from Rs. 20,000/- to Rs. 9,84,355/-. Aggrieved by the order, the appellants have filed this appeal along with the stay petition. 4. The appellant submits that Rule 8(3A) does not have the effect of denying the benefit of Cenvat credit. It only puts restriction on utilization of Cenvat credit till the default is over. Once they have made good the default by paying defaulted amount along with interest, payment through Cenvat credit will be a good discharge of the duty liability even if paid earlier. He submits that demanding excise duty paid through Cenvat credit to be paid again has the effect of denying such ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate on which such payment was due to the date on which payment was actually made; (ii) During the period of default (i.e. from expiry of the grace period of 30 days to the date of payment of defaulted amount) interest on duty shown to have been paid through Cenvat credit should be calculated from the date of each clearance to the date on which the assessee came out of the default. For amounts paid in PLA on such clearance also, interest will be payable from the date of clearance to date of payment. 7. Further we also find that the Gujarat High Court has decided in the case of CCE v. Saurashtra Cements Ltd. - 2010 (260) E.L.T. 71 (Guj.) that in this type of situation, penalty is imposable only under Rule 27 of Central Excise Rules whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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