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2016 (5) TMI 1067 - CESTAT MUMBAI

2016 (5) TMI 1067 - CESTAT MUMBAI - TMI - Confiscation in lieu of redemption fine - Rule 25 of the Central Excise Rules - Default in payment of duty on due date during the period 2009-10 - Appellant suo moto calculated the short paid duty and discharged the same without pointed out by the department alongwith interest and intimated to the department - Held that:- as per the said act of the appellant no show cause notice should have been issued for any demand for the reason that after payment of .....

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lization of Cenvat credit - Held that:- the issue has been settled by the Hon’ble Gujarat High Court judgment in case of Indsur Global Ltd Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT], wherein provision of bar of utilization of Cenvat credit in certain circumstances has been held ultravirus, accordingly the appellant is free for utilization of the Cenvat credit even during the default period of payment of duty. However, provision of consignment wise payment of duty still exist, th .....

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ue notice for demand of such duty and appropriation thereof, consequently no penalty is imposable on the appellant. Consequential confiscation of the goods is also set aside. Decided partly in favour of appellant - APPEAL NO. E/1675/12 - Order No.A/87350/16/EB - Dated:- 14-1-2016 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri. G. Natarajan, Advocate For the Respondent : Shri. V.K. Agrawal, Addl. Dy. Commissioner(A.R.) ORDER PER : RAMESH NAIR This .....

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n in lieu thereof. 2. I hereby confirm C. Ex. Duty of ₹ 1,24,12,514/- consignment wise under the provisions of section 11A of the Central Excise Act, 1944 including proviso thereto read with Rule 8(3A) of the Central Excise Rules, 2002 and the total payment made by them by challans amounting to ₹ 1,17,45,152/- is ordered to be appropriated against the amount confirmed. 3. I hereby confirm the differential Central Excise duty of ₹ 6,48,471/-+Ed. Cess ₹ 12,593/- + S&H E .....

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to pay only 25% of this penalty amount subject to condition that entire amount of duty and interest alongwith the 25% penalty under Section 11Ac are paid within thirty days of communication of this order. 2. The fact of the case is that the appellant are engaged in the manufacture and clearances of components of Boiler Parts i.e. M.S. Ducts falling under Chapter heading No. 7308 of the Schedule to the Central Excise Tariff Act, 1985. The appellant during period 2009-10 short paid the monthly ex .....

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goods valued ₹ 14,95,08,412/- which was cleared without payment of duty on due date. The demand of ₹ 1,24,12,514/- was proposed under Section 11A read with Rule 8(3A) of Central Excise Rules out of which an amount of ₹ 1,17,45,152/- already paid by the appellant was proposed to be appropriated. Demand of ₹ 6,48,471/- was proposed for the reason that the same was debited through Cenvat credit account. Interest under Section 11AB read with Rule 8(3A) of Central Excise Rules .....

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duty. The appellant has though belatedly but discharged the entire duty liability alongwith interest. The appellant in their letter dated 28/10/2012 and 14/12/2010 clearly mentioned the reason of short payment of duty on due date is due to clerical error occurred by the unskilled staff as dealing staff instead of taking excise invoices value they have taken the bill of conversion charges, accordingly the value calculated was short as compared to the actual assessable value. It is only at the tim .....

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of Central Excise Act, 1944, according to which, even no show cause notice should have been issued. As regard the small amount of duty paid through Cenvat credit account, he submits that utilization of Cenvat credit is permitted as held by the Hon ble Gujarat High Court in case of Indsur Global Ltd Vs. Union of India[2014(310) ELT 833(Guj)] In this judgment Honble High Court held the provision of Rule 8(3A) as ultravirus in respect of provisions which bars the utilization of Cenvat credit. In .....

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e of clandestine removal of goods, for this reason also goods should not have been confiscated. 4. Shri. V.K. Agrawal, Ld. Addl. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that in case of Indsur Global(supra) Honble High Court has struck down provision related to the bar of utilization of credit. However the provision of clearance of goods and payment of duty on consignment basis was maintained. Therefore appellant hav .....

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t in their letter dated 14/12/2010 stated that the case can be concluded in terms of subsection (2B) of Section 11A as they have paid the entire short paid duty alongwith interest. In our view as per the said act of the appellant no show cause notice should have been issued for any demand for the reason that after payment of duty and their declaration in their letter dated 14/12/2010 no short payment of duty exist. The provisions of Section 11A(2B) is reproduced below:- [ 11A Recovery of duties .....

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he Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of one year referred to in sub- section (1) .....

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of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section.] 72 [ Explanation 3 . For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of duty under this sub-sect .....

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