TMI Blog2023 (5) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... - Excise Appeal No. 86413 of 2013 - FINAL ORDER NO. A/85565/2023 - Dated:- 28-3-2023 - HON BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) And HON BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri Amrendra Kumar Jha, Deputy Commissioner, Authorised Representative for the Appellant None for the Respondent ORDER PER : SANJIV SRIVASTAVA This appeal filed by the Revenue is directed against Orderin- Original No. Belapur/61/Bel-IV/R-I/Commr/KA/12-13 dated 31.12.2012 passed by the Commissioner of Central Excise, Belapur. By the impugned order, Commissioner has held as follows:- ORDER I drop all further proceedings initiated in the SCN F. No. V. Adj (SCN)15-47/Commr/2011-12/Bel/879 dated 29.02.2012. 2.1 Revenue has challenged the above order stating the following grounds:- 2 E/86413/2013 4.1 The Commissioner has erred by relying on the decision in the case of Solar Chemferts Pvt. Ltd. v/s. CCE, Thane | [2012(276) ELT 0273 (Tri-Mumbai)] dated 13.06.2012. The Tribunal in the case of Paras Lubricants Ltd Vs CCE, Raigad (2012(286)ELT 82(Tri-Mum)} vide order dated 15.6.2012 has held that since Rule 8(3A) clearly states that all consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that, the assessee has defaulted in the payment of duty from June 2008 to March 2011 (default period) and contravened the provisions of Rule 8(3A) of the CCR, 2004. Hence, the assessee was asked to pay the duties consignment-wise, without utilizing CENVAT Credit. However, the assessee utilized the credit during the default period, hence, the present SCN proposes to recover duty equivalent to the duty paid by utilization of CENVAT Credit (being Rs. 61,64,816/-), confiscate the goods that had been removed during the default period and to impose penalty under Sec 11AC of the Central Excise Act, read with rule 25(1)(d) of the C. Excise Rules, 2002. 24. In their reply the assessee stated that they have paid the duty through their Cenvat account. Later they have paid the interest also and intimated the Department vide their letter dated 25.10.2010. They also stated that a SCN dated 7.4.2011 has already been issued to them on the same issue proposing to appropriate the interest paid and imposition of penalty under Rule 27 of the CER 2002. The present SCN has also been issued on the same issue which is against the principle of law. They contended that payment of duty by utilizing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en he not only misses the crucial date but is unable to or chooses not to pay the duty for another 30 days that sub-rule (3A) of Rule 8 would apply. In such a case, the facility of monthly payment and adjustment of Cenvat credit is taken away. The fact that two sets of assessees form different and distinct class identifiable and differentiated by intelligible differentia cannot be disputed. In one class, we have those assessees who complied with the requirements of the rules and made payment of excise duty by the due date and the other class forms of those assessees who missed the due date by at least 30 days. If the Legislature, therefore, treats these two distinct classes differently, this would certainly not a case of hostile discrimination. An assessee who for whatever reasons is unable to pay the duty within the time prescribed by the statute cannot complain of being differently treated from those who fulfill the statutory requirements. The provisions contained in sub-rule (3A) have a purpose to achieve relatable to the class of assessees who failed to pay the duty in time is also equally clear. It is only when the condition of payment of duty by the 5th or the 6th day of mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such powers, Notification No. 17/2006 was issued providing for withdrawal of facilities and for imposition of restrictions against who are prima facie found to be knowingly involved in any of the following : (a) removal of goods without the cover of an invoice and without payment of duty; (b) removal of goods without declaring the correct value for payment of duty, where a portion of sale price, in excess of invoice price, is received by him or on his behalf but not accounted for in the books of account; (c) taking of CENVAT credit without the receipt of goods specified in the document based on which the said credit has been taken; (d) taking of CENVAT credit on invoices or other documents which a person has reasons to believe as not genuine; (e) issue of excise duty invoice without delivery of goods specified in the said invoice; (f) claiming of refund or rebate based on the excise duty paid invoice or other documents which a person has reason to believe as not genuine. This Rule 12CC as well as the notification issued by the Government would apply to special class of assessees who through their conscious act tried to evade duty. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on makes no distinction between a willful defaulter and the rest, we must view its reasonableness in the background of an ordinary assessee who would be hit and targeted by such a provision. As held by the Supreme Court in the case of Eicher Motors Ltd. (supra) an assessee would be entitled to take credit of input already used by the manufacturer in the final product. In the said case, the Supreme Court was dealing with Rule 57F which was introduced in the Central Excise Rules, 1944 under which credit lying unutilized in the Modvat credit account of an assessee on 16th March, 1995 would lapse. Such provision was questioned. The Supreme Court held that since excess credit could not have been utilized for payment of the excise duty on any other product, the unutilised credit was getting accumulated. For the utilization of the credit, all vestitive facts or necessary incidents thereto had taken place prior to 16-3-1995. Thus the assessees became entitled to take the credit of the input instantaneously once the input is received in the factory of the manufacturer of the final product and the final product which had been cleared from the factory was sought to be lapsed. The Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he restrictions or the reasonable quantum of restriction etc. In such cases, the administrative action in our country, in our view, has to be tested on the principle of proportionality, just as it is done in the case of the main legislation. This, in fact, is being done by our Courts. 34. By no stretch of imagination, the restriction imposed under sub-rule (3A) of Rule 8 to the extend it requires a defaulter irrespective of its extent, nature and reason for the default to pay the excise duty without availing Cenvat credit to his account can be stated to be a reasonable restriction. It leads to a situation so harsh and a position so unenviable that it would be virtually impossible for an assessee who is trapped in the whirlpool to get out of his financial difficulties. This is quite apart from being wholly reasonable, being irrational and arbitrary and therefore, violative of Article 14 of the Constitution. It prevents him from availing credit of duty already paid by him. It also is a serious affront to his right to carry on his trade or business guaranteed under Article 19(1)(g) of the Constitution. On both the counts, therefore, that portion of sub-rule (3A) of rule must ..... X X X X Extracts X X X X X X X X Extracts X X X X
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