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TMI Blog2014 (3) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has considered the said issue in number of decisions and has held that in case of default in payment of duty in terms of Rule 8, subsequent utilization of Cenvat credit for clearance of goods would result only in confirmation of demand of interest, inasmuch as there would be no Revenue loss. Reference in this regard can be made to the Tribunal's decision in the case of Solor Chemferts Pvt. Ltd. vs. Commissioner [2012 (276) ELT 273(Tri.Mum)] as also to a latest decision of Ahmedabad Bench in the case of F.S. Engineers vs. CCE, Ahmedabad [2013 (293) ELT 61 (Tri.Ahmd)]. It stands held by the Tribunal that in case of utilization of credit instead of payment of duty in cash it results in loss to the Revenue only to the extent of interest. To the same effect is the decision of Tribunal in the case of Manipal Springs Ltd. vs. Commissioner [2012 (286) ELT 628 (Tri)]. As regards penalty, we find that the issue is no more res integra and stands decided by the Gujarat High Court in the case of CCE vs. Saurashtra Cement Ltd. reported in [2010 (260) ELT 71 (Guj)] when the appeal filed by the Revenue against the order of the Tribunal was dismissed. The said decision stand followed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit instead of payment of duty in cash, results in loss to the Revenue only to the extent of interest. I do not agree and record separate order. Utilization of Cenvat Credit instead of PLA (a) To appreciat payment of duty consignment-wise through utilization of Cenvat credit in respect of clearance after default in payment of duty, it is proper to refer Rule 8 and specifically rule 8(3A) of Cenvat credit rules 2002 Rule 8 (3A) provides a legal fiction according to which failure to pay duty consignment-wise through PLA shall be deemed that goods have been cleared without payment of duty and penal consequences shall follow. For ready reference, provisions of Rule 8 are reproduced. Rule 8 of the Central Excise Rules, 2002 (hereinafter referred to as the rules provided that:- "(1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by 5th day of the following month: Provided that in case of goods removed during the month of March, the duty shall be paid by the 31st day of March. (2) The duty of excise shall be deemed to have been paid for the purpose of these rules on the excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary to refer to brief facts. 7. The Noticee has not paid the duty on the goods removed from their factory premises for the period from April-10 to November-10, as per the returns filed by them, I find that as per the provisions of the Rule 8 of the Central Excise Rules, 2002 the duty on the goods removed from the factory during a month shall be paid by 5th day of the following month. As stated in the Notice, the Noticee was required to pay the duty by 5th day of May-10 in respect of the goods removed during the month of April-10, 5th day of June-10 in respect of the goods removed during the month of May-10,. 5th day of July-10 in respect of the goods removed during the month of June-10, 5th day, of August-10 in respect of the goods removed during the month of July-10, 5th day of September-10 in respect of the goods removed during the month of August-10, 5th day of October-10 in respect of goods removed during the month of September-10, 5th day of November-10 in respect of goods removed during the month of October-10, 5th day of December-10 in respect of goods removed during the month of November-10 but they have paid duty beyond a period of one month from the due date. Sub rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid by the 20th of the said month and in respect of the goods cleared during the second fortnight by the 5th of the following month. Sub-rule (3) of Rule 8 provides for payment of interest in case of late payment of duty. Sub-rule (4) which is relevant for the present purpose provides for the consequences of non-payment of duty within the period prescribed and lays down that in case of default by the assessee in payment of any one installment beyond a period of thirty days from the due date, or in payment of installment for the third time in a financial year, the assessee shall forfeit the facility of payment of dues in installments for a period of two months from the date of communication of the order passed by the Deputy Collector of Central Excise in this regard or till such date on which all dues are paid, whichever is later. The sub-rule further provides that during such period the assessee shall be required to pay excise duty for each consignment by debit to the account current, failing which it shall be deemed that the goods have been cleared without payment of duty and the consequences and penalties under the rules would follow. Thus, Rule 8 of the Rules contains an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the deemed credit in breach of the directions issued by the Deputy Commissioner in the order withdrawing the facility and thereby clearly contravened the provisions of sub-rule (4) of Rule 8 of the Rules. Legal provisions as contained in Rule 8(3A) are very clear "3A - If the assessee fails to pay the amount of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notwithstanding anything contained in said sub-rule (1) and sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004, the assessee shall, pay excised duty for each consignment at the time of removal, without utilizing the CENVAT Credit till the date of assessee Pays the outstanding amount of including interest thereon; and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow." 10. It is clearly stipulated in rule 8(3A) that in case of default, assessee shall pay excise duty for each consignment at the time of removal, without utilizing Cenvat Credit. Para 11 of Gujarat High Court also laid down clear law on the issue and it does not leave to interpretatio ..... 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