M/S. Jai Prakash Strips Ltd vs Commissioner, Central Excise & ...

[Arising out of Order-in- Original No. 31/CEX/2006 dtd. 12/10/2006 passed by the Commissioner of Central Excise & Customs, Nashik]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Jai Prakash Strips Ltd. : Appellants

VS

Commissioner, Central Excise & Customs, Nashik : Respondent

Appearance

None for the Appellants Shri. V.K. Shastri, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 29/6/2015 Date of decision: 29/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Original No. 31/CEX/2006 dtd. 12/10/2006 passed by the Commissioner of Central Excise & Customs, Nashik, wherein Ld. Commissioner confirmed demand of Rs. 44,30,447/-, imposed penalty of equal amount under Section 11AC and demanded interest under Section 11AB.

2. The fact of the case is that appellant defaulted in monthly payment of duty inasmuch as duty of Rs. 5,37,897 for period 21/7/2005 to 20/9/2005, duty of Rs. 20,89,887/- for the month Aug 2005 and duty of Rs. 18,02,663/- for September, 2005 (1/9/2005 upto 20/9/2005) was not paid on the due date. However the said amount of duty has been paid by the appellant partly Rs. 19,88,270/- through PLA on 31/8/2005, 5/9/2005, 13/10/2005, remaining amount of Rs. 24,42,177/- was paid through Cenvat credit alongwith interest amount of Rs. 34,000/-. Show cause notice was issued proposing demand of duty of Rs. 44,30,447/- under Section 11A, also proposed penalty under provisions of Rule 25 read with Section 11AC. Interest was also demanded under Section 11AB. Show cause notice was adjudicated and the proposal made in the show cause notice have been confirmed therefore appellant is before this Tribunal with the prayer that impugned order be set aside and appeal be allowed.

3. When the matter was called for the hearing none appeared on behalf of the appellant. It was observed from the record that matter has come up for hearing at various dates. On 29/4/2015 this Tribunal has adjourned the matter as last chance, I therefore proceed to decide the appeal on merit.

4. Shri. V.K. Shastri, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

5. On careful consideration of submission made by Ld. A.R. and perusal of records, I find that it is a case of delay in monthly duty payment for the period July, August and September, 2005. However, the appellant have paid the entire duty amount of Rs. 44,30,447/- and also paid the interest. Only issue left is that out of total amount of Rs. 44,30,447/-, appellant paid of Rs. 24,42,177/-through Cenvat Credit and as per the Revenue appellant has not allowed to utilize the Cenvat credit in terms of Rule 8(3A) of Cenvat Credit Rules, 2004, for this reason not only entire demand was confirmed but also penalty under Section 11AC was imposed. I find that since entire duty has been deposited by the appellant, demand does not survive however payment made by appellant is upheld. As regard penalty imposed under Section 11AC, I find that it is not the case of evasion of duty, it is only case of delay in monthly duty payment, which appellant admittedly paid along with interest. Therefore in my considered view penalty under Section 11AC was wrongly imposed by the adjudicating authority. Moreover, the Honble High Court of Gujarat in case of Indsur Global Ltd. Vs. UOI [2014(310) ELT 833(Guj)] held that provisions of 8(3A) is ultra virus which resulted there is no bar in utilization of Cenvat credit for payment of monthly excise duty. Therefore considering Honble Gujarat High Court judgment in case of Indsur Global Ltd (Supra) and fact and circumstances of the case, I am of the view that penalty under Section 11AC should not have been imposed. I therefore set aside the penalty under Section 11AC, however upheld the demand of duty which already paid along with interest. Appeal is partly allowed in the above terms.

(Dictated in court)

Ramesh Nair Member (Judicial)

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