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2015 (10) TMI 1842 - CESTAT CHENNAIDelay in payment of duty - payment of duty without utilizing the cenvat credit - Held that:- This being a small scale unit, the appellant assessee was paying excise duty on monthly basis as per Rule 173 G of CER, 1944 from 01.04.2000. SCN No. 692/2003 dated 16.06.2003 was issued based on the amendment to Rule 173G (I) (e) w.e.f. 11.02.2001, which was later substituted by Rule 8 of CER, 2001. It cannot be disputed that the provision of Rule 8(4) are pari materia with Rule 173 G (I) (e) and the non-obstantive clause was introduced by insertion of sub-rule 3A in Rule 8 of CER, 2002 only w.e.f. 31.03.2005, while the period in dispute in the present case is prior to that date. - condition contained in sub-rule (3A) of Rule 8 of CER, 2002 for payment of duty without utilizing the cenvat credit till an assessee pays the outstanding amount including interest is unconstitutional and that the subsequent proceedings initiated by the department for demanding tax was set at naught. - condition contained in Rule 8 (3A) of CER, 2002 for payment of duty without utilization of cenvat credit is contrary to the scheme of availment of cenvat credit under CCR and the said Rule 8 (3A) is arbitrary and violative of Article 14 of the Constitution. Accordingly, the Hon’ble High Court has struck down the Rule 8 (3A) as unconstitutional. The jurisdictional Hon’ble Madras High Court’s ruling is binding on the jurisdictional adjudicating authority and also binding on this Tribunal. - demand of duty under Rule 8 (3A) is unsustainable as the said Rule has been struck down by the Hon’ble High Courts [2015 (5) TMI 603 - MADRAS HIGH COURT] and the demand of duty and penalty imposed in the impugned order is liable to be set aside - Decided in favour of assessee.
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