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Indrox Global Pvt Ltd Versus Commissioner of Central Excise

2017 (12) TMI 326 - CESTAT MUMBAI

Default in monthly payment of dues - rule 8(3A) of Central Excise Rules 2002 - contention of the appellant that the show cause notice was issued on 27th August 2008 when the restriction imposed in rule 8(3) of Central Excise Rules, 2002 was no longer application to them - scope and intent of rule 8 of the Central Excise Rules, 2002 - penalty u/r 15(2) of CCR - Held that: - It is clear from the records that appellant had defaulted in the payment of dues during the months of May, August and Septem .....

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he show cause notice show cause notice for recovery of the amount paid through debit in CENVAT credit has been rendered infructuous as also the appropriateness of the said amount in the order of the original authority. Therefore, all that remains insofar this appeal is concerned are the penalties imposed under rule 15(2) and rule 25 of the CENVAT Credit Rules, 2004 to which reference may be made here. - In view of the fact payment had been made in full along with interest before the issue of .....

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sition of penalty of like amount under rule 15(2) of CENVAT Credit Rules, 2004 and further penalty of ₹ 37,58,471/- under rule 25 of CENVAT Credit Rules, 2002 for contravention of rule 8(3A) of Central Excise Rules 2002 by impugned order-in-appeal no. RBT/86/2011 dated 14th March 2011 of Commissioner of Central Excise (Appeals), Mumbai Zone I which has upheld the order of the lower authority. 2. Appellant is a manufacturer of hydrochloric acid and red oxide falling under chapter 28 of the .....

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ated date, the assessee was deprived of the privilege of consolidated payment of duty every month and are required to pay duty at the time of removal without utilizing CENAT credit till outstanding dues along with interest was made good; any clearance that was not in accordance with these stipulation would have to be deemed as clearance without payment of duty and consequences under section 11A and 11AC of the Central Excise Act, 1944 would follow. Admittedly, the appellant, paid an amount of &# .....

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tstanding duty liability, along with interest, of their own volition and the issue of show cause notice under section 11A was not tenable in view of sub-section 2(b) of the said provision. Reliance has been placed on the decision of the Tribunal in Empee Offset Pvt Ltd v. Commissioner of Central Excise, Pune I [2015 (329) ELT 714 (Tri.Mumbai)], Kudos Chemie Ltd v. Commissioner of Central Excise & Service Tax, Chandigarh II [2016 (333) ELT 346 (Tri.Del.)] and Premier Percelain Pvt Ltd v. Comm .....

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Sansthan v. Commissioner of Central Excise, Noida [2014 (312) ELT 699 (Tri.-Del.)] to contend that, for contraventions specified in rule 25 of the Central Excise Rules, 2002, mere contravention alone is sufficient for owing strict liability requirements. 5. It is clear from the records that appellant had defaulted in the payment of dues during the months of May, August and September, 2007 and that the privilege of consolidated monthly discharge of duty liability was no longer available to them .....

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ability well before the issue of show cause notice but have held that excisability of goods arises upon manufacture which is normally to be discharged on clearance of the goods but, as a measure of facilitation, rule 8 of the Central Excise Rules, 2002 provides for a consolidated monthly payment of dues consequences of failure to discharge must be faced by the assessee by penal consequences that follow clandestine removal in lieu of clearing provisions for absence of the privilege. 6. The primar .....

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standing amount along with interest at the rate specified by the Central Government vide notification under section 11AA of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount. (5) If the assessee fails to pay the duty declared as payable by him in the return within a period of one month from the due date, then the assessee is liable to pay the penalty at the rate of one per cent on such amount of .....

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these rules, the interest under sub-rule (4) and the penalty under sub-rule (5) in the same manner as they are applicable for recovery of any duty or other sums payable to the Central Government. 7. It would appear from a plain reading of the above that monitoring or regulatory role by the tax authority is not envisaged within the said rule. Being a measure of self-regulation the onus of compliance thereto by abstaining from recourse to privilege of consolidated payment rests upon the assesse. T .....

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ction had been received subsequently. The proposal in the show cause notice show cause notice for recovery of the amount paid through debit in CENVAT credit has been rendered infructuous as also the appropriateness of the said amount in the order of the original authority. Therefore, all that remains insofar this appeal is concerned are the penalties imposed under rule 15(2) and rule 25 of the CENVAT Credit Rules, 2004 to which reference may be made here. 9. Rule 15(2) CENVAT Credit Rules, 2004. .....

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- (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notification issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or xxxxxx (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to .....

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f the Hon ble High Court of Andhra Pradesh in Commissioner of Central Excise, Guntur v. Andhra Cements Limited [2007 (216) ELT 362 (AP)] held: 4. However, the learned Counsel for the appellant has drawn our attention to Section 11 of the Central Excise Act, 1944 (for short 'the Act'). Section 11AC of the Act reads as under: Penalty for short-levy or non-levy of duty in certain cases : Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneous .....

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Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent of the duty so determined; Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that w .....

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