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M/s Temple Packaging Pvt Ltd Versus Commissioners of Central Excise, Customs And Service Tax, Daman

2016 (2) TMI 144 - CESTAT AHMEDABAD

Reversal of credit during the defaulted period from Cenvat Account - Failure to discharge the duty liability on enrichment basis at the time of removal of goods, without utilizing the CENVAT credit - Constitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - duty demand alongwith interest and to impose penalty - Held that:- The short payment of ₹ 44,462.00 for the month of June 2013 is a bonafide mistake on the part of the appellant. It is noted that the appellant detected th .....

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gh Court in the case of Indsur Global Ltd. vs Union of India (2014 (12) TMI 585 - GUJARAT HIGH COURT ) held that the condition contained in Sub Rule (3A) of the Rule 8 for payment of duty without utilizing Cenvat Credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion "without utilizing the Cenvat Credit" of Sub Rule (3A) of Rule 8 of the said Rules 2002 shall be rendered invalid. So, the demand of amount paid by utilizing CENVA .....

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P K Das, Member (J) And P M Saleem, Member (T) For the Appellants : Shri Prakash Shah & Shri Rahul Gajera, Advs For the Respondent : Shri J Nagori, AR ORDER Per P K Das The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Printed Carton & Printed Literature etc., classifiable under Chapter 48 & 49 of Schedule to the Central Exise Tariff Act, 1985. The appellants were discharging monthly duty liability as per Rule 8 of the Central Excis .....

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n monthly ER-I return November 2013. On 03.04.2014 the Central Excise Officers visited the appellant's factory and recorded the statements of the employees of the appellant company, on the issue of non payment of ₹ 44,462.00 for the month of June 2013 and contravention of Rule 8 of the said Rules, amongst others. At the instance of the said Central Excise Officers, the appellant debited an amount of ₹ 10,09,097.00 for alleged contravention of the said Rules. The appellant again r .....

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is at the time of removal of goods, without utilizing the CENVAT credit till the date, they paid outstanding amount on 05.12.2013 in contravention of Rule 8 (3A) of the Rules. The Adjudicating Authority confirmed the demand of Central Excise Duty of ₹ 1,14,52,029.00 for contravention of Rule 8 (3A) of the said Rules and the amount of ₹ 70,43,000 paid in PLA was appropriated against the said demand and the amount of ₹ 44,09,029 Cenvat credit during the defaulted period would als .....

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ith interest on 05.12.2013. It is seen from the record that during the relevant period from 13.06.2013 to 13.12.2013, there was sufficient balance in their Cenvat Credit Account and PLA, as under:- Sr. No. Last day of the month Closing balance (Rs.) Cenvat PLA Total 1 30.06.2013 16,90,232 34,95,690 51,85,922 2 31.07.2013 12,58,306 31,74,690 44,32,996 3 31.08.2013 19,55,935 32,04,690 51,60,625 4 30.09.2013 14,59,547 35,29,690 49,89,237 5 31.10.2013 19,19,519 35,23,632 54,43,151 6 30.11.2013 13,69 .....

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ed and re-credited by the appellant in the same month. The Adjudicating Authority observed that the appellant wrongly utilized the amount of ₹ 44,09,029.00 from the Cenvat Credit Account in contravention of Rule 8 (3A) of the Valuation Rules, 2002. The Hon'ble Gujarat High Court in the case of Indsur Global Ltd. vs Union of India 2014 (310) E.L.T. 833 (Guj.) held that the condition contained in Sub Rule (3A) of the Rule 8 for payment of duty without utilizing Cenvat Credit till an asse .....

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es, 2002. We find that in view of the decision of the Hon'ble Gujarat High Court in the case of Indsur Global Ltd (supra) the reversal of credit during the defaulted period from Cenvat Account is valid, and therefore, the demand of amount of ₹ 10,09,097.00 for contravention of Rule 8 (3A) of the said Rules cannot be sustained. The Learned Authorised Representative submits that the appellant is liable to pay interest under Rule 8 (3A) of the said Rules for failure to clear the goods on .....

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