2025 (6) TMI 1957 - AT - Central Excise

Contravention of provision of Rule 8(1) and Rule 8(3)A of the Central Excise Rules - failure to make payment of duty for the month of May 2013 by due date - Levy of penalty - HELD THAT - The issue involved in this matter has been decided by the Hon ble Gujrat High Court in the case of Indsur Global Limited Vrs. Union of India 2014 (12) TMI 585 - GUJARAT HIGH COURT and Sandley Industries Ltd. Vrs.Union of India 2015 (10) TMI 2455 - PUNJAB HARYANA HIGH COURT wherein provision of Rule 8(3) A of Central Excise Rule 2002 was held ultra virus therefore no demand can be raised against the appellant and the decision of the Hon ble Gujrat High Court in the case of Indsur Global Limited was taken up by the Revenue by the Hon ble Apex Court and the Hon ble Apex Court vide 2024 (7) TMI 1559 - SC ORDER (LB) Supreme Court Larger Bench disposed of the SLP filed by the Revenue as not pressed. Thus no penalty is imposable. The impugned order is set aside - appeal allowed.

Summary

The appellant challenged an order confirming duty demand for failure to pay excise duty by the due date (6th June 2013) and unauthorized utilization of Cenvat Credit during 07.07.2013 to 10.09.2013, allegedly contravening Rule 8(1) and Rule 8(3)A of the Central Excise Rules, 2002. The adjudicating authority held that the appellant "cannot utilize the Cenvat Credit for payment of duty during the intervening period" without timely duty payment, imposing duty demand with interest and penalty.The Tribunal noted absence of appellant's representation and relied on precedents: Indsur Global Ltd. v. Union of India, 2014(12) TMI 585 (Gujarat HC) and Sandley Industries Ltd. v. Union of India, 2015(326) ELT 256 (Punjab & Haryana HC), where Rule 8(3)A was held ultra vires. The Supreme Court, via a Larger Bench order dated 29.07.2024 (2024(7) TMI 1559), disposed of the Revenue's SLP against Indsur Global Ltd. as "not pressed," affirming the High Court's ruling.Accordingly, the Tribunal held that the demand and penalty under Rule 8(3)A are "not sustainable," set aside the impugned order, and allowed the appeal with consequential relief.