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2016 (5) TMI 838 - CESTAT BANGALORE

2016 (5) TMI 838 - CESTAT BANGALORE - TMI - Demand of duty and interest thereon - Contravention of provisions of Rule 8(3A) - Duty paid through Cenvat credit - Held that:- by following the judgment of Hon'ble High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] where it was held that the Rule 8(3A) is unconstitutional and shall be rendered invalid. Therefore, the impugned order is not sustainable and set aside.

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r the Respondent : Shri N. Jagdish, AR ORDER Per: S.S. GARG This appeal is directed against the order of the Commissioner (Appeals) dated 20.09.2012 whereby he partially allowed the appeal by upholding the Order-in-Original but reduced the penalty from ₹ 1,70,368/- (Rupees One Lakh Seventy Thousand Three Hundred and Sixty Eight only) imposed by the Order-in-Original to ₹ 55,000/- (Rupees Fifty Five Thousand only). Briefly the facts of the present case are that the appellants are enga .....

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count current or cash on each consignment from 6th May 2009 onwards and also demanded interest under Section 11AB and proposed penalty under Rule 25 of Central Excise Rules. The appellant filed the reply controverting the allegation in the show-cause notice. Learned Assistant Commissioner vide his order dated 03.09.2010 held that the appellant had contravened the provisions of Rule 8(3A) of Central Excise Rules and that duty of ₹ 1,70,368/- (Rupees One Lakh Seventy Thousand Three Hundred a .....

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held that the appellants were required to pay duty in cash on each consignment during the period of default and the payment utilizing cenvat credit was not proper and thereby upheld the decision of the original authority but the penalty was reduced to the tune of ₹ 55,000/- (Rupees Fifty Five Thousand only). Hence the present appeal. 2. Learned counsel for the appellant submitted that it is a fact that the appellants have defaulted in the demand of duty to the tune of ₹ 4,28,085/- (R .....

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ted in [2014 (310) E.L.T. 833 (Guj.)] wherein the Honble High Court of Gujarat in para 36 of the judgment has held as under: 36. In the result, the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the 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 Central Excise Rules, 2002, shall be rendered invalid. 2.1. H .....

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8(3A) has been held to be ultra virus by the Hon ble Gujarat High Court in the case cited above. The learned counsel further submitted that the imposition of penalty under Rule 25 of the Central Excise Rules is also not legal and proper. He further submitted that the original authority had imposed penalty equivalent to duty amount of ₹ 1,70,368/- (Rupees One Lakh Seventy Thousand Three Hundred and Sixty Eight only) invoking Rule 25 of Central Excise Rules 2002 but the said penalty was ord .....

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