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M/s. Star Drugs and Research Labs Ltd. Versus CCE, Chennai-III

2015 (10) TMI 1842 - CESTAT CHENNAI

Delay 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 no .....

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ained 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 .....

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ER Per: P.K. Choudhary The appellant assessee M/s. Star Drugs is carrying out the business of manufacture of P or P medicaments falling under Ch. 30 of CET. The appellant assessee defaulted in making the payment of duty under deferred monthly payment facility during the months of April, May, June and July,2000. Hence, they were directed to pay the duty amount on consignment basis. They paid the duty liability through cenvat credit and subsequently there was change in law to provide that punishme .....

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as adjudicated upon and by order dated 21.06.2001 the appellant was directed to pay the duty on the goods cleared in respect of which debit has been made in Cenvat account on consignment basis from the date on which the facility of monthly payments was withdrawn and the extent of the debit to be calculated and the amount to be paid in PLA within 15 days of receipt of the order. Aggrieved by the said order in original dated 21.06.2001 the appellant filed an appeal which was dismissed on 28.05.200 .....

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3 ordered the appellant to pay the excise duty on consignment basis by debit to account current and that till date the appellant had neither complied with the order of the Deputy Commissioner nor the order of the Assistant Commissioner to pay the duty in account current, but have continued to pay through Cenvat also. Therefore the appellant had to show cause why total duty paid in Cenvat amounting to ₹ 51,95,144/- from April 2002 to March 2003 should not be demanded as arrears for having c .....

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order rejected the contentions of the appellant and aggrieved by the said order, the appellant is constrained to approach the Honble Tribunal. Hence the present appeal. 2. The orders passed by the Tribunal in the miscellaneous petition in stay order No. 325/2005 dated 01.03.2005 and the modification petition in No. 298/2005 dated 25.04.2005 were challenged in the writ petition. The Hon ble High Court of Madras vide W.P.Nos. 17464,17465/2005 dated 24.05.2005 granted interim stay and to the oper .....

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it petitions and closed the miscellaneous petitions and upheld the order of the Tribunal. Para 36 & 37 of the order of the Hon ble High Court are reproduced as under:- 36. The decision in 2006 (204) CTR (P&H) 213 (Roadmaster Industries of India (P) Ltd. Vs. Inspecting Assistant Commissioner of Income Tax and another) relied on by the petitioner sets out the principle that the quasi-judicial authorities are required to pass orders giving reasons, I do not see any valid ground to set aside .....

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, connected miscellaneous petitions are also closed. The appellant however filed writ appeal before the Hon ble High Court and the Honble High Court vide order dated 29.04.2009 passed order directing the appellant M/s. Star Drugs and research Labs. Ltd., to furnish bank guarantee of ₹ 26.00 lakhs to the respondent i.e. CCE, Chennai-III within two weeks from 29.04.2009 and accordingly, the appellants will not be required to make the pre-deposit as directed by CESTAT. The appellant assessee .....

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ment basis as admitted in para-12 of the OIO. He further submitted that the issue is squarely covered by the decision of M/s. Noble Drugs Ltd. Vs. CCE, Nasik -2007(215) ELT 500 (Tri.-LB). He also relied on the following case laws in support of his contention:- 1. Indsur Global Ltd. Vs. UOI 2014-TIOL-2115-HC-AHM-CX = 2014 (310) ELT 833 (Guj) 2. Precision Fasteners Ltd. Vs. CCE 2014-TIOL-2211-HC-AHM-CX 3. CCE, Madurai Vs. Kaleeswarar Mills 2013-TIOL-1209-CESTAT-MAD The Ld. Advocate filed copy of t .....

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He further submitted that Rule 8(3A) of the CER, 2002 restrains the assessee from using cenvat credit until the entire outstanding demand including the interest is paid. He further submitted that the consequence for non-payment of excise duty is also indicated in the very same section as it provided that in case of failure to pay the amount, it shall be deemed that such goods have been cleared without payment of duty and the consequence of penalties as provided in the rules would follow. Furthe .....

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(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. We also find that the above issue stands answered in favour of the appellant assessee by the decision of the Hon ble Kerala High Court in t .....

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