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2014 (9) TMI 663 - AT - Central ExciseWrongful availment of CENVAT Credit - Duty paid utilizing credit - Revenue contend that duty should have been paid consignment wise without utilization CENVAT Credit - Held that:- period of default exceeded 30 days from the due date only in respect of May’10, June’10, July’10, Aug.’10 & Sept.’10 and it is in respect of the default periods beyond 30 days from the due date that the provision of Rule 8(3A) would be attracted. There is, however, no dispute that duty for these months has been paid through PLA along with interest for the period of delay. Oce the defaulted amount of duty is paid with interest, the duty payment made through Cenvat Credit during forfeiture period become good payment, even if it is paid before the date on which the default amount has been paid and it is not necessary to ask the assessee to pay the same duty in cash and take re-credit of the equivalent amount debited in the Cenvat Credit Account earlier. Requirement of Rule 8(3A) operates notwithstanding anything contained in sub-rule (1) and sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2004 and when the failure to discharge duty liability for a particular month continues beyond a period of 30 days from the due date, during that period, in accordance with the provisions of Rule 8(3A), duty on the goods cleared would be required to be paid consignment-wise and without utilizing the Cenvat Credit. For the period of default in discharge of monthly duty liability beyond 30 days from the due date, duty on clearances made during the forfeiture period, would be required to be paid through PLA and if the duty had been paid through Cenvat Credit, the same would be required to be paid through PLA by permitting the re-credit of the amount debited in Cenvat Credit amount. Moreover, from the language of Rule 8(3A), it is clear that it is a non obstante provision which operates notwithstanding anything contained in sub-rule (1) & sub-rule (4) of Rule 3 of the Cenvat Credit Rules, 2004 and hence provisions of this sub-rule will have overriding effect over the provisions of the Cenvat Credit Rules, 2004. The total duty paid through Cenvat Credit during the forfeiture period to which the provision of Rule 8(3A) would apply, appears to be much less than ₹ 13,39,225/-, as in respect of in the months of April’10, Oct.’10 and Nov.’10, the period of delay in discharge of duty liability was within 30 days from the due date. In view of this, I direct the appellant to pay an amount of ₹ 6 Lakh through PLA in addition to payment of ₹ 5,000/- towards the penalty for compliance with the provision of Section 35F. No interest on the amount of ₹ 6 lakh is payable. Once the amount of duty of ₹ 6 Lakh is paid through PLA, the appellant would be eligible for re-credit of the equivalent amount in the Cenvat Credit which had earlier been debited by them. Decided partly in favour of assessee.
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