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TMI Blog2024 (11) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... Director (Appellant-A2) which were directed against the Order-in-Original No. 23/2015 dated 23.04.2015 passed by the Commissioner of Central Excise, Chennai I Commissionerate demanding Central Excise Duty of Rs.1,72,68,455/- to be paid in cash along with interest and also imposing penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 in respect of Appellant-A1 and for imposition of penalty of Rs.10,00,000/- in respect of Appellant-A2. 1.2 As the issue involved in the above appeals is contravention of provisions of Rule 8(3A) of the Central Excise Rules, 2002, both the appeals are being taken up together for decision and disposal by this common order. 2.1 The above demand was consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of writ petitions in WP No. 2506/2011 and others. Further, it was submitted that there was no scope for initiation of any proceedings as the relevant provisions of Rule 8(3A) have been struck down as ultravires the main Act by the decision of the Hon'ble High Court, Gujarat in an identical case of Precision Fasters Ltd. Vs. Commissioner of central Excise, [2014-TIOL-2211-HC]. ii. It was averred that it was only a case of belated payment of duty and there was no violation or wilful default as the entire liability was discharged during and after the investigation As there was no malafide on the part of the appellant to evade duty, as the department was fully aware of the facts, the invocation of Section 11A was not legally sustainable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash payment, the entire amount would be available as CENVAT Credit. It was pointed out that in cases involving revenue neutrality, no demand could be made as held in: - (a) Allianz Steel Lrtd. Vs. Commissioner of Central Excise [2012 (286) ELT 633 (Tri.-Del.)] (b) Commissioner of central Excise, Jullundur Vs. Kochar Sung up Acrylic Ltd. [2010 (29) ELT 713 (Tri.-Del.)] vi. It was averred that being a case of wrong availment of CENVAT credit only CENVAT Credit Rules were applicable for invocation of penal provisions and not the penal provisions of Central Excise Act which are relevant only in cases of intentional / evading payment of excise duty relying the ratio of the decisions in the case of M/s Eicher Motor Ltd. [1999 (106) ELT 3 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeal filed by the Appellant. 5. Heard both sides and carefully considered the submissions and evidences on record. 6. The main issues that arise for consideration in these appeals are:- i. Whether the demand as confirmed and upheld in the impugned order dated 23.04.2015 for violation of Rule 8(3A) against the Appellant-A1 is sustainable in law or not? ii. Whether such demand can be raised invoking the extending period and imposition of penalty is justified? 7. The main issue involved in the present appeals is whether an assessee who failed to make full payment of duty within prescribed time limit as provided under Rule 8 of Central Excise Rules, 2002 and defaulted in payment of excise duty in terms of Rule 8(1) and Rule 8(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 8(3A) of Central Excise Rules, 2002 as ultravires to the Main Act. The Hon'ble Gujarat High Court in the case of M/s. Indsur Global Ltd. Vs. UOI [2014 (310) ELT 833 (Guj.)] struck down the condition in Rule 8(3A) for payment of duty "without utilizing the CENVAT credit" as unconstitutional and invalid. This judgment of the Hon'ble Gujarat High Court has been followed by other High Courts in series of cases as follows: - i. Shreeji Surface Coatings Pvt. Ltd. Vs Union of India [2015 (320) ELT 764 (Guj.)]. ii. Malladi Drugs and Pharmaceuticals Limited vs. Union of India [2015 (323) ELT 489 (Mad.)]. iii. Sandley Industries vs. Union of India [2015 (326) ELT 256]. iv. Nashik Forge Pvt. Ltd. [2019 (368) ELT 20 (Bom)] 9. We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een disposed by the Hon'ble Apex Court as per decision dated 29.07.2024. The appeal was referred to the Lok Adalat proceedings before the Hon'ble Supreme Court and settlement has been arrived at. The effect is that the stay order having merged with the order of settlement, stands vacated. The decision rendered by the Hon'ble High Courts of Gujarat and Madras in the above cases would revive and be in force as a Precedent. 12. After appreciating the facts and following the above decisions, we are of the considered opinion that the demand raised alleging violation of Rule 8(3A) cannot sustain and requires to be set aside. Ordered accordingly. 13. In the result, the impugned Order-in-Original No. 23/2015 dated 23.04.2015 is set aside. The app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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