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2016 (10) TMI 645 - CESTAT CHANDIGARH

2016 (10) TMI 645 - CESTAT CHANDIGARH - TMI - Demand of duty - Rule 8 of Central Excise Rules, 2001 - the facility of fortnightly payment of duty and payment through RG 23A Part II for a period two months or till the deposit of defaulted amount which ever later was withdrawn - appellant took credit in their PLA account without actually deposit of the same through TR-6 challan manipulation of account current and misleading Held that: - the appellant has paid whole of the defaulted amount alon .....

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of Rule 8(3A) of the Central Excise Rules, 2001 by utilizing the credit account for payment of duty with effect from 18.1.2002, therefore, the demand of ₹ 1,69,38,241/- is not sustainable - Demand set aside - no penalty imposable. - Manipulation of account current - fraudulent credit taken in account current on TR-6 challan and an amount of ₹ 1,69,38,241 has been utilized by the appellant from their cenvat credit account for payment of duty demand of said amount along with inte .....

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ble on the appellants. Further, the whole of the amount in dispute was paid alongwith interest before issuance of show cause notice, thus, the penalty is reduced to 25% of ₹ 1,63,00,000/- - Imposition of penalties on co-appellants Held that: - co-appellants are the responsible officials of the appellant company. They have admitted their mistake, in that circumstance, the imposition of nominal penalty on both the appellants shall meet the end of justice - the penalties on both the app .....

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aken fraudulently in their account current without support of valid TR-6 challan and utilized towards payment of central excise duty. A demand of ₹ 1,69,38,241/- was also confirmed on account of duty paid by utilizing their account current and various penalties imposed on the appellants, Aggrieved with the said order, the appellants are before us. 2. The facts of the case are that by an order dated 24.9.2001 in terms of Rule 8 of Central Excise Rules, 2001, the facility of fortnightly paym .....

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#8377; 27,10,000/-vide entry dated 27.10.2001 in their account current. Whereas the appellant took credit in their PLA account without actually deposit of the same through TR-6 challan. Therefore, it was alleged that the appellant instead paying defaulted amount manipulated their account current and tried to show that the default amount had been paid and accordingly restored to facility of fortnightly payment of duty on their own with effect from 18.1.2002 and started paying duty from the cenvat .....

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ntral Excise Rules , 2002. As the appellant was not entitled to utilize the said cenvat credit for payment of duty, they did not clear the defaulted amount before restoring to the facility of fortnightly payment of duty. It was also alleged that the appellant manipulated the account current by showing that they paid more than the TR-6 challan. Therefore, the total amount of default ₹ 3,32,38,241, out of this an amount of ₹ 1,63,00,000 pertains to fraudulent credit taken in account cu .....

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ellant and various penalties on co- appellant were also imposed. 3. Shri Kamaljeet Singh, Advocate, learned Counsel for the appellant submitted that vide order dated 24.9.2001 the facility of fortnightly payment of duty and payment through RG 23A Part Il for a period two months or till the deposit of defaulted amount which ever later was withdrawn. It is his contention that the appellant has paid defaulted amount on 17.10.2001 which is evident from RT 12 returns. Therefore, after 24.11.2001, the .....

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the actual TR-6 wherein the amount shown was less. On realization of their mistake and on pointing out by the department, they have paid the whole amount of excessively taken as credit in their account current alongwith interest on 9.3.2002 and 15.3.2002, therefore the penalties on the appellants are not imposable. 4. On the other hand, learned AR opposed the contention of the learned Counsel and submitted that as per order dated 24.9.2001, the appellants were restrained from utilising their cre .....

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heir TR-6 therefore, penalties are imposable on the appellants. 5. Heard the parties and considered the submissions. 6. On careful consideration of the submissions made by both sides, we find that vide order dated 24.9.2001 in terms of Rule 8 of Central Excise Rules, 2001 the facility for fortnightly payment of duty and payment of duty for a period of two months or till the deposit of defaulted amount which ever was later. We have seen that the appellant has paid whole of the defaulted amount al .....

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at the appellant has not contravened the provisions of Rule 8(3A) of the Central Excise Rules, 2001 by utilizing the credit account for payment of duty with effect from 18.1.2002, therefore, the demand of ₹ 1,69,38,241/- is not sustainable. Accordingly, the same is set aside and no penalty is imposable on the appellant against this charge. 7. We further we find that after making defaulted payment by 17.10.2001, the appellant first time taken the credit in their PLA without payment of duty .....

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,00,000/- alongwith interest and have admitted the same, in that circumstance, the issue before us is to be considered for imposition of penalties on the appellants. The sole contention of the appellant is that they were receiving the communication from their head office with regard to the payment of duty through TR-6 challan telephonically wrongly and therefore, they have taken the credit i.e .due to mistake of the concerned official. In that circumstance, the penalty is not imposable. We find .....

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