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2014 (12) TMI 906 - CESTAT AHMEDABADRestriction on utilization of cenvat credit under Rule 8A - meager amount - default in payment of duty or short payment of duty wrongly - Whether due to a calculation error, amounting to a short payment of ₹ 6,158/-, appellant can be slapped with a demand of approximately ₹ 457 Crores, along with interest and an equivalent amount of penalty - Held that:- Field formations are required to take recovery action under Section 11A of the Central Excise Act, 1944 if there is any calculation error and rate of duty difference. If a short calculation of duty is attributed to be a default of Rule 8(3A) of the Central Excise Rules, 2002 then every short payment paid on being pointed out by department, or suo-moto by an assessee, will be a case of default. At the same time any valuation/ classification dispute detected by department and upheld by any appellate authority up to Supreme Court will also be a case of default of Rule 8(3A). Such a situation may arise after years of litigation also and may lead to a position of chaos rather than harmony and certainity in taxation matters. We are, therefore, of the opinion that default in payment of duty mentioned in Rule 8 (3A) will be non payment of duty as assessed by an assessee. However, there could be situations where an assessee deliberately calculates less duty liability in order to avoid penal provisions. The default with respect to Rule 8(3A) should be a deliberate act in total defiance of the law and not for minor calculation errors. For such minor calculation errors the provisions of Section 11A of the Central Excise Act, 1944 are attracted as per circulars issued by CBEC. Appellant themselves detected short payment and paid the amounts along with interest and intimated the department. Appellant had sufficient balance in its duty payment accounts and is paying crores of duty by issuing thousands of invoices. A minor calculation error can not be categorised as defiance of law and will not amount to a default of Rule 8(3A) as these provisions will be applicable to non payment of duty as self assessed by an assessee. In the case of the appellant the short payment is so small that the judgment of Hon ble Gujarat High Court s order, in the case of Baman and Berry Bearing Private Limited vs. UOI (supra), will be applicable even if the act of the appellant is considered as default of Rule 8(3A) - appellant s case is not a default of Rule 8(3A) of the Central Excise Rules, 2002 - Decided in favour of assessee.
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