Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (8) TMI 533 - CESTAT HYDERABAD

2016 (8) TMI 533 - CESTAT HYDERABAD - TMI - Demand of interest - utilization of Cenvat Credit to pay duty during the defaulted period - contravention of provision of Rule 8(3A) of the Central Excise Rules, 2002 - non-service of show cause notice - Held that:- in the light of the judgment of Hon'ble High Court of Madras in the case of AR Metallurgical (P)Ltd Vs CESTAT, Chennai [2015 (5) TMI 661 - MADRAS HIGH COURT] followed by the judgment of Hon'ble High Court of Gujarat in the case of Indsur Gl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ellant challenges the demand of interest raised on the ground of utilization of Cenvat Credit in contravention of the provision of Rule 8(3A) of the Central Excise Rules, 2002. 2. The appellants are manufacturers of excisable goods viz. Colloidal Graphite and Lubricants. The allegation is that appellants failed to pay the duty within the prescribed due date during the months of September, 2006, October, 2006, December, 2006 and May, 2007. The duty along with interest was remitted by the appellan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f May, 2007 was paid by appellants on 06-07-2007. The delayed payment of duty and interest was reflected in the monthly returns. After a lapse of about two years, the department by applying provisions of Rule 8(3A) directed the appellants to pay the amount of ₹ 15,15,235/- being the duty paid by them utilizing Cenvat for the period 05-11-2006 to 20-03-2007. The appellants in obedience remitted through PLA a sum of ₹ 15,15,235/- in two installments on different dates. After such remit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

no further dispute with regard to such payment of duty made through PLA, the original authority is right in not issuing a show cause notice. It is also observed that interest liability being statutory in nature, no separate show cause notice is required. 5. The issue raised in this case being the demand of interest of ₹ 5,61,272/- on account of wrongly utilizing the credit in Cenvat account to pay duty during the defaulted period, I would confine my discussion on the said issue. The learn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le toi pay outstanding amount with interest at the rate specified by the Central Government under a notification. The period of computation of interest would be the first day after the due date till date of actual payment of the outstanding amount. 23. As noted, the Cenvat Credit rules, 2004 permit an assessee liable to pay excise duty to avail Cenvat Credit for such purpose on various duties paid on the inputs which may either be raw material or capital goods in the manner provided in the said .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o longer enjoy the facility of payment of excise duty on monthly basis and he would have to clear each consignment on actual payment of duty and secondly that he would not be entitled to avail of Cenvat Credit for such purpose. 35. The situation can be looked at slightly different angle. With or without the provisions of sub-rule(3A) liability to pay interest for the default period as per sub-rule (3) of rule 8 continues. Sub-rule(3A) is basically a mechanism for stringent recovery and does not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

proportion to the aim sought to be achieved, the same must be held to be wholly arbitrary and unreasonable. We may recall, the delegated legislature in its wisdom now dismantled this entire mechanism and instead has provided for penalty at the rate of 1% per month on delayed payment of duty. 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 uncon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version