M/S. Vaibhav Forge vs Commissioner Of Central Excise, Nashik

[Arising out of Order-in- Appeal No. AKP/NSK/92/2009 dated 9/11/2009 passed by the Commissioner of Central Excise & Customs (Appeals) 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. Vaibhav Forge : Appellants

VS

Commissioner of Central Excise, Nashik : Respondent

Appearance

Shri. Venkatesh Iyer, Consultant for the Appellants Shri. V.K. Shastri, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 15/5/2015 Date of decision: 15/5/2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in- Appeal No. AKP/NSK/92/2009 dated 9/11/2009 passed by the Commissioner of Central Excise & Customs (Appeals) Nashik, wherein Ld. Commissioner(Appeals) has upheld the order of the Joint Commissioner of Central Excise to the extent of confirmation of demand of duty of Rs. 7,17,726/- however set aside the penalty of equal of duty and instead imposed penalty of Rs. 1 lakh under Rule 25 of Central Excise Rules, 2002. The fact of the case is that the appellant have defaulted in monthly payment of Excise duty and paid the defaulted amount beyond 30 days from the due date alongwith interest. The show cause notice was issued and culminated into adjudication order wherein demand of excise duty of Rs. 7,17,726/- was demanded equivalent to amount of Cenvat credit utilized towards payment of excise duty during period after 30 days from due date till payment of defaulted amount in term of 8 (3A) of Central Excise Rules, 2002.

2. Shri. Venkatesh Iyer, Ld. Consultant of the appellant submits that this issue has been settled by the Honble High Court of Gujarat in case of Indsur Global Ltd. Vs. Union of India & 2 reported [2014-TIOL-2115-HC-AHM-CX] wherein Honble High Court held that condition contained in Rule 8(3A) of Central Excise Rules, 2002 as unconstitutional therefore demand which is also against utilization of Cenvat Credit was not sustainable.

3. On the other hand, Shri. V. K. Shastri, Ld. Asstt. Commissioner(A.R.) reiterates the findings of the impugned order.

4. On careful consideration of the submissions made by both the sides, I find that in the present case undisputed fact is that demand of Rs. 7,17,726/- and consequent penalty of Rs. 1 lakh has confirmed on the ground that appellant have utilized Cenvat credit during the period of default inasmuch as appellant had not paid the monthly payment of duty beyond 30 days till the payment of such defaulted amount alongwith interest. As per rule 8(3A) appellant was supposed to pay duty during defaulted period from PLA i.e. through cash and not by utilizing Cenvat credit. I find that the issue has been considered by Honble High Court of Gujarat in the case of - Indsur Global Ltd (supra) and held that prohibition in utilizing Cenvat Credit is unconstitutional. In other words, assessee is entitle to use Cenvat Credit for payment of Excise duty at any point of time. Respectfully following ratio of above High Court judgment, I find that demand confirmed by lower appellate authority is not sustainable, therefore the same is set aside. Accordingly, the appeal of the appellant is allowed.

(Dictated in court)

Ramesh Nair Member (Judicial) sk

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