TMI Blog2015 (7) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions are in the nature of civil obligations and do not require any mens rea or wilful intention until and unless the relevant provision provides for the same - appellant has violated Rule 8(3A) and hence the goods covered by the show cause notice are liable to confiscation and the appellant is liable to penalty under Rule 25 of the Central Excise Rules, 2002 - However, penalty is reduced - Decided partly in favour of assessee. - Appeal No. E/86586/13-Mum - final order No. A/460/15/SMB - Dated:- 10-2-2015 - P K Jain, Member (T),J. For the Appellant : Shri Anand S. Kulkarni, Adv. For the Respondent : Shri N Prabhu Desai, Superintendent (AR) ORDER Brief facts of the case are that the appellant defaulted in monthly payment of duty in the month of October 2010. The said default was not made good within 30 days of the due date i.e. from 5 th November. As per Rule 8(3A) of the Central Excise Rules, 2002, the appellant was required 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the Hon'ble Gujarat High Court in the case of CCE vs. Saurashtra Cement Ltd. reported in 2010 (260) ELT 71 (Guj.) which has been affirmed by the Hon'ble Supreme Court in 2013 (292) ELT A98 (SC). 3. The learned AR, on the other hand, argued that a perusal of the judgment of the Hon'ble High Court of Gujarat would indicate that the Hon'ble High Court has only stated that restriction on utilization of cenvat credit is incorrect and violative of Article 19(1)(g) of the Constitution. The learned AR further argued that the whole reading of the judgment would indicate that the Hon'ble High Court has upheld imposing certain restriction on the persons who default in payment of duty and in fact in the order, the Hon'ble High Court in para 35 has stated that insisting on an assessee in default to clear all consignments on payment of duty would be perfectly a legitimate measure. 3.1 The learned AR further stated that it is not disputed by the learned counsel for the appellant that they have not cleared the goods by paying duty consignment-wise which is the essential requirement of Rule 8(3A). It is not the case of the appellant that they cleared the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consequences and penalties as provided in these rules shall follow. 4.1 I have also gone through the judgment of the Hon'ble High Court of Gujarat in the case of Indsur Global Ltd. (supra). I find that the Hon'ble High Court in paras 34, 35 and 36 has observed as under:- 34. By no stretch of imagination, the restriction imposed under sub-rule (3A) of rule 8 to the extend it requires a defaulter irrespective of its extent, nature and reason for the default to pay the excise duty without availing cenvat credit to his account can be stated to be a reasonable restriction. It leads to a situation so harsh and a position so unenviable that it would be virtually impossible for an assessee who is trapped in the whirlpool to get out of his financial difficulties. This is quite apart from being wholly reasonable, being irrational and arbitrary and therefore, violative of Article 14 of the Constitution. It prevents him from availing credit of duty already paid by him. It also is a serious affront to his right to carry on his trade or business guaranteed under Article 19(1)(g) of the Constitution. On both the counts, therefore, that portion of sub-rule (3A) of rule must fail. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to clear the goods for each consignment at the time of removal till the outstanding amount including interest is paid. It is not in dispute that for the demands made, the appellant has not paid the duty consignment-wise either through cenvat credit account or through PLA. Obviously they have violated Rule 8(3A) and the said rule provides that it shall be deemed that such goods have been cleared without payment of duty and consequences and penalties as provided in these rules shall follow. 4.2 Now coming to the penalty aspect, the penalty has been imposed under Rule 25. Rule 25 is reproduced below:- Confiscation and penalty. RULE 25 . -(1) Subject to the provisions of section 11 AC of the Act , if any producer, manufacturer, registered person of a warehouse, or a registered dealer,- (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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