TMI Blog2014 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... h along with interest for the delayed payment and thereafter, the assessee should have been allowed to take re-credit of this amount in the Cenvat Credit Account inasmuch as debits have been made to the equivalent extent in the Cenvat Credit account. In the case of defaults, the prohibition under Rule 8 (3A) for utilizing Cenvat Credit account is not with reference to the arrears but to the entire credit lying in the account and therefore the assesse has to pay excise duty through account current for each consignment at the time of removal. Since the Cenvat Credit was unavailable, utilizing the same for payment of duty was an exercise in nullity and could not be recognized as payment towards duty. in respect of goods cleared subsequently, the appellant did not discharge the excise duty liability through PLA account. Therefore, there was non/short payment of duty. Once there is a short payment of duty, the same ought to be recovered invoking the provisions of Section 11A of the Act. Once the provisions of Section 11A comes into picture, and the demand is sustainable under the said section, the liability to pay interest under Section 11AB shall also arise. Therefore, there is no m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date, then the assessee has to pay excise duty for each consignment at the time of removal, without utilizing the Cenvat Credit till the date the assessee pays the outstanding amount including interest thereon and in the event of any failure, it shall be deemed that that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow. Therefore, a show-cause notice dated 09/02/2012 was issued to the appellant proposing to demand excise duty of ₹ 13,43,70,490/- under Rule 8 (3A) of the said Rule read with Section 11A of the said Act and appropriation of the amount already deposited in this regard. It was also proposed to hold the clearances of the excisable goods valued at ₹ 32,38,06,781/- liable to confiscation under Rule 25 of the Central Excise Rules and to impose penalty under the provisions of Central Excise Law. The said notice was adjudicated by the impugned order and the demands as discussed above has confirmed. 2.2 In their appeal memorandum, the appellant has alleged that they had approached the Settlement Commission, Mumbai for the defaulted payment of duty of ₹ 4,28,01,932/- and the Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.1, 7 8 of the notice. As per the charge contained in these paragraphs, the appellant did not discharge excise duty liability for the month of September 2008 due on 05/10/2008 for an amount of ₹ 4,18,97,700/- and the default continued for a period of more than 30 days from the due date till the detection by the DGCEI. The default was made good only on 12/04/2011 and therefore, during the period of default, the appellant could not have cleared excisable goods on a monthly basis and the appellant also could not have availed Cenvat Credit for discharge of duty. Therefore, the charge against the appellant is clearly spelt out in the show-cause notice even though there might be an error in proposing to appropriate ₹ 13,43,70,498/- which was partly paid through the Cenvat Credit account towards the duty demand. Even if the show-cause notice invokes the wrong provisions of law but so long as the charge against the appellant is clearly spelt out invocation of a wrong provisions will not vitiate the show-cause notice. However, the demand for interest on the delayed payment of excise duty is clearly sustainable and also the imposition of penalty under Rule 25 of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date; (b) if the assessee deposits the duty by cheque, the date of presentation of the cheque in the bank designated by the Central Board of Excise and Customs for this purpose shall be deemed to be the date on which the duty has been paid subject to realization of that cheque. Notwithstanding anything contained in sub-rule (1), the duty on the goods removed from the factory or the warehouse, in the State of Gujarat, during the second fortnight of February, 2002 and the month of March, 2002 shall be paid by the 31st March, 2002 : P rovided that where an assessee in the State of Gujarat is availing of the exemption under a notification based on the value of clearances in a financial year, the duty on goods cleared during the month of February, 2002 shall be paid by the 31st March, 2002. Explanation . - For removal of doubts, it is hereby clarified that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of ₹ 2,38,10,905/- through PLA and ₹ 11,05,59,585/- through Cenvat Credit account. The discharge of duty liability through Cenvat Credit account during the period of default is clearly prohibited under Rule 8 (3A). Therefore, this amount should have been made good by the assessee by paying it in cash along with interest for the delayed payment and thereafter, the assessee should have been allowed to take re-credit of this amount in the Cenvat Credit Account inasmuch as debits have been made to the equivalent extent in the Cenvat Credit account. 4.4 The above position has been settled by the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Industries Vs.CCE, Bangalore - 2013-TIOL-285-HC-KAR-CX and by the Hon'ble High Court of Madras in the case of Unirols Airtex Vs. CCE, Coimbatore - 2013 (296) ELT 449 (Mad.). In these decisions, it was clearly held that in the case of defaults, the prohibition under Rule 8 (3A) for utilizing Cenvat Credit account is not with reference to the arrears but to the entire credit lying in the account and therefore the assesse has to pay excise duty through account current for each consignment at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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