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TMI Blog2024 (11) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... of Cenvat Credit of Rs.1,54,02,811/- under Rule 14 of Cenvat Credit Rules, 2004 (CCR), during the periods from January 2011 to March 2014 along with applicable interest and imposing penalties under Section 11AC of the Central Excise Act, 1944 (ACT)/ Rule 27 of Central Excise Rules, 2002 (Rules). 2. The above demands were consequent to the audit findings that the Appellant had defaulted in payment of duty and belatedly filed returns on a quarterly basis instead of on a monthly basis, in as much as the aggregate value of clearances from their multi locational factories had exceeded Rs. 4 Crores during each of the financial years 2010-11, 2011-12 and 2012-13 and thus not eligible to avail the SSI exemption in terms of Notification no. 08/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liability which is recoverable under Section 11A can be paid out of subsequently availed Cenvat Credit which was exactly followed by the Appellant and hence it was averred that the demand of duty was not sustainable. (ii) It was pointed out that as per the ratio laid down by the Hon'ble Supreme Court in the case of Government of India Vs. Indian Tobacco Association -2005(187) ELT SC, the new Rule 8(3A) substituted from 11.07.2014 vide Notification no. 19/2014-CE dt.11.07.2014(relevant extracts reproduced below) would apply retrospectively and hence the proceedings contemplated in the SCN was not sustainable. "for sub-rule (3A), the following sub-rule shall be substituted, namely :- "(3A) If the assessee fails to pay the duty declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in [2013 (292) ELT A98SC]. In view of the aforesaid decisions, it was contended that the demands and imposed penalties were not sustainable. (iv) It was submitted that the imposition of penalty was not sustainable as department failed to prove that the wrong utilization of cenvat credit was owing to fraud, suppression, etc. justifying the invocation of extended period and hence the demand was hit by time bar. In this regard, reliance was placed on the decision in the case of M/s. Uniworth Textiles Ltd. Vs CCE [2013 (288) ELT 161 SC]. 4. The Ld. Counsel for the Appellant reiterated the grounds of appeal and submitted that the Tribunal in a batch of appeals involving identical issues, allowed the appeals filed by various assesses in Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 had crossed the threshold limit of exemption specified for SSI units and hence barred from payment through CENVAT account in terms of provisions of Section 8(3A) and as such Cenvat credit could not be utilized for payment of duty. The Ld. AR relied on the decisions in the case of Commissioner of Central Excise, Kolkata Vs. M/s. Indian Oil Seals and Synthetic Products [2024 (6) TMI 1009-Calcutta High Court], Commissioner of Central Excise, Kolkata Vs. Khaitan Electricals Ltd. [2024 (7) TMI 1356-Calcutta High Court], Sandley Industries Ltd. Vs. UOI [2015 (326) ELT 256 (P&H)], Burgeon Pharmaceuticals Pvt. Ltd. Versus Commissioner of GST & Central Excise, Chennai [2024 (7) TMI 681] and Andhra Cylinders Pvt. Ltd., Nalin Khara, Managing Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys from the due date, as prescribed in sub-rule (1), then notwithstanding anything contained in said sub-rule (1) and sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004, the assessee shall, pay excise duty for each consignment at the time of removal, without utilizing the CENVAT credit till the date the assessee pays the outstanding amount including interest thereon; and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow" . It was the departments case that the Appellant, being ineligible for availing SSI exemption, ought to have discharged duty on a monthly basis instead of on quarterly basis and therefore def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex 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. Under such circumstances, the judgements referred by the Ld. AR does not support the cause of revenue. 11. 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. Since the demand itself does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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