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Narmada Offshore & Technical Services Pvt Ltd Versus Commissioner of Central Excise, Belapur

2016 (3) TMI 398 - CESTAT MUMBAI

Demand of interest for delayed payment of tax - Payment of interest through CENVAT Credit - Violation of Rule 8(3A) of the Central Excise Rules, 2002 - Held that:- It is a fact that the show-cause notice, Order-in-Original and Order-in-Appeal are based on the violation of Rule 8(3A) of the Central Excise Rules, 2002 which require the payment of duty only through account current in case of violation of payment of duty in time as prescribed in Rule 8. As submitted by the ld. Counsel for the appell .....

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n by Hon'ble High Court of Gujarat, Madras and Punjab & Haryana, set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any. - Appeal No. E/2018/10-Mum - A/85459/16/SMB - Dated:- 27-1-2016 - S. S. Garg, Member (J) For the Appellant : Shri J C Patel, Adv For the Respondent : Shri S V Nair, AC(AR) ORDER Per S. S. Garg This appeal is directed against Order-in-Appeal No. PKS/267/BEL/2010 dated 23.08.2010 wherein the Commissioner (Appeals) has upheld the Or .....

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only ₹ 19,83,437/- was paid in time and remaining amount of ₹ 3,97,835/- was paid after the due date of 05.06.2008, it's the department's case that for the period 06.06.2008 upto 27.10.2008 the appellant was required to discharge the duty from current account (cash) and not through Cenvat account in view of the provisions of Rule 8(3A) of CENVAT Credit Rules, 2002. The said rules 8 (3A) provides that where there is a default in the payment of duty beyond 30 days from the due .....

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of Rule 8(3A). The appellant filed the reply to the show-cause notice denying the allegations and the Adjudicating Authority vide Order-in-Original dated 16.01.2009, confirming the demand for duty for the said period 06.06.2008 to 27.10.2008 in cash and imposed penalty of ₹ 32,97839/- equal to the duty under Rule 25 of Central Excise Act,2002. Aggrieved by the Order-in-Original the appellant filed the appeal before the Commissioner (Appeals) who vide Order-in-Appeal dated 18.08.2010 uphel .....

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7,42,590/- in cash and ₹ 25,55,249/- through Cenvat. 4. Ld. Counsel for the appellant submitted that the order of the Commissioner (Appeals) is contrary to the law, justice, equity and is liable to be set aside. He further submitted that the provisions of Rule 8(3A) of the Central Excise Rules,2002 which require payment of duty only through account current and prohibits payment of duty through Cenvat account current and prohibits payment of duty through Cenvat account have been struck dow .....

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s been struck down as unconstitutional by various High Courts as cited supra. In this situation, the show-cause notice, Order-in-Original and Order-in-Appeal which are based upon Rule 8(3A) cannot survive and are liable to be set aside as held by the Hon'ble Gujarat High Court in para 4 of the judgment in Shreeji Surface Coatings P. Ltd. (supra). In para 4, the Hon'ble High Court of Gujarat has observed as under:- "4. When the entire show-cause notice, order in original and appellat .....

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the portion of Subrule (3A) of Rule 8, which required that the future clearances of a defaulter must be without utilization of the Cenvat Credit." 6. Ld. Counsel for the appellant further submitted that in view of the law down by various High Courts, imposition of penalty under Rule 25 of Central Excise Act, 2002 is totally unsustainable in law. He further submitted that the Tribunal in the following decisions has laid down that for the contravention of said rule 8 no penalty can be imposed .....

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