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2015 (10) TMI 2455 - HC - Central Excise
Constitutional validity of Rule 8(3A) of the 2002 Rules - Disallowance of the benefit of adjustment of CENVAT credit lying unutilised in its account by issuing show cause notices - Held that:- Rule 8(3A) of the 2002 Rules to the extent it contains the words 'without utilizing the CENVAT Credit' is held to be arbitrary and unreasonable and is struck down. In other words, the unamended Rule 8(3A) of 2002 Rules whereby the benefit of CENVAT Credit for all the period till the actual payment was made, stands disallowed in the event of a minor default also is arbitrary and unreasonable.
It may further be noticed that the respondents had themselves realized the unreasonableness of the provisions of Rule 8 (3A) of 2002 Rules and had withdrawn the words 'without utilizing the benefit of CENVAT Credit' and had amended the same w.e.f 11.7.2014 by incorporation that now a penalty shall be imposed at the rate of 1% of the defaulted amount for each month or part thereof calculated from the due date. - Decision in the case of Indsur Global Limited & Precision Fasteners Limited's cases (2014 (12) TMI 585 - GUJARAT HIGH COURT) and Malladi Drugs and Pharmaceuticals Limited's case (2015 (5) TMI 603 - MADRAS HIGH COURT) followed - matter remanded back - Decided in favour of assessee.