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2016 (11) TMI 227 - CESTAT NEW DELHI

2016 (11) TMI 227 - CESTAT NEW DELHI - TMI - Violation of provisions of Rule 8(3A) - default in duty payment of more than 30 days - all the subsequent clearances were to be made on cash payment only without utilizing cenvat credit - whether the Revenue's claim that clearances subsequent to March, 2006 made by utilizing cenvat credit shall be deemed to have been cleared without payment of duty in terms of the said rules justified? - Held that: - the appellants have fully discharged the default am .....

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Account Current held that it could not be said to be the only mode of payment of duty during this period. Payment through cenvat credit is also a valid mode of payment - there is no violation of provisions of Rule 8(3A) - appeal allowed - decided in favor of appellant. - Excise Appeal No. 35/2010-EX (DB) - Final Order No. 54380/2016 - Dated:- 21-10-2016 - Dr. Satish Chandra, President And Mr. B. Ravichandran, Member (Technical) Shri Amit Jain, Advocate for the appellant Shri G.R.Singh, DR f .....

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d not make payment on that day. The said duty was paid through PLA on 5.5.2006, 31.5.2006 and 16.6.2006. Proceedings were initiated against the appellant for violation of provisions of Rule 8(3A), which stipulates that when there is a default in duty payment of more than 30 days, all the subsequent clearances were to be made on cash payment only without utilizing cenvat credit. As such, it was alleged that clearances subsequent to March, 2006 made by utilizing cenvat credit shall be deemed to ha .....

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erms of Rule 25 of the Central Excise Rules. 2. We have heard both the sides and perused the appeal records. 3. It was submitted on behalf of the appellant that Rule 8(3A), as it existed on 31.03.2006, required an order to be passed by the Asstt. Commissioner to forfeit the facility of monthly payment in terms of Rule 8(1). Admittedly, in the present case, no such order has been passed by the Asstt. Commissioner. Rule 8(3A) was substituted w.e.f. 1.6.2006, which stipulated that in case of defaul .....

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and perused the appeals records. 7. Admittedly, in terms of the legal provisions applicable during the relevant time upto 1.6.2006 an order is required to be passed by the Asstt. Commissioner to forfeit the facility to pay duty in monthly instalments under sub-rule (1). On issue of such order, during the period covered by the said sub-rule, the assessee shall be required to pay excise duty for each consignment by debit to the current account. We note that in the present case, there is no such o .....

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the cenvat credit during the period of default is held to be unconstitutional by several High Courts. The Hon ble Gujarat High Court in case of Indsur Global Ltd. 2014 (310) ELT 833 (Gujarat) held the expression without utilizing the cenvat credit used in Rule 8(3A) was held to be ultra virus and inconsistently. The said decision was concurred by the Hon ble High Courts of Madras, Punjab & Haryana, Delhi and Allahabad and has been followed by the Tribunal in various decisions. Reference can .....

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