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2016 (2) TMI 144 - AT - Central ExciseReversal of credit during the defaulted period from Cenvat Account - Failure to discharge the duty liability on enrichment basis at the time of removal of goods, without utilizing the CENVAT credit - Constitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - duty demand alongwith interest and to impose penalty - Held that:- The short payment of ₹ 44,462.00 for the month of June 2013 is a bonafide mistake on the part of the appellant. It is noted that the appellant detected the mistake and reversed the amount alongwith interest. Thereafter, the Central Excise Officers visited the appellant's factory and directed the appellants to debit the amount of ₹ 10,09,097.00 from PLA, which was debited and re-credited by the appellant in the same month. The Adjudicating Authority observed that the appellant wrongly utilized the amount of ₹ 44,09,029.00 from the Cenvat Credit Account in contravention of Rule 8 (3A) of the Valuation Rules, 2002. The Hon'ble Gujarat High Court in the case of Indsur Global Ltd. vs Union of India (2014 (12) TMI 585 - GUJARAT HIGH COURT ) held that the condition contained in Sub Rule (3A) of the Rule 8 for payment of duty without utilizing Cenvat Credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion "without utilizing the Cenvat Credit" of Sub Rule (3A) of Rule 8 of the said Rules 2002 shall be rendered invalid. So, the demand of amount paid by utilizing CENVAT credit during the defaulted period is not sustainable. In the present case, the entire proceeding was initiated for contravention of Rule 8 (3A) of the said Rules for payment of duty from Cenvat Account during the defaulted period. The Hon'ble Gujarat High Court already struck down the portion of the Rule 8 (3A) of the said Rules, and therefore, the impugned order cannot survive. - Decided in favour of assessee
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