M/S Vrajeshwari Steel Pvt.Ltd vs Commissioner, Central Excise & Service ...
- CitationAppeal No.E/623-626/2012
Ratio decidendi
The rule this decision rests on
The demand of duty paid from CENVAT credit rather than in cash under Rule 8(3A) of the Central Excise Rules, 2002 cannot be sustained, following the Gujarat High Court's holding in Indsur Global Ltd that the portion of sub-rule (3A) requiring duty to be paid without utilising CENVAT credit is invalid. Because the rule requiring payment in cash has been declared invalid, no penalty can be imposed for its contravention; the imposition of penalty is therefore not warranted. Revenue is not precluded from demanding interest where duty has been paid late on a consignment-wise basis, so liability to interest survives independently of the invalidated cash-payment requirement.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Appeal No.E/623-626/2012 [Arising out of OIA No. OMMR-A-/240/VDR-II/2012, dt.30.04.2012, and OIA No.COMMR-A-/236-239/VDR-II/2012, dt.30.04.2012, passed by Commissioner (Appeals), Cen.Excise & Service Tax, Vadodara-II]
M/s Vrajeshwari Steel Pvt.Ltd. Appellant
Vs
Commissioner, Central Excise & Service Tax, Vadodara-II Respondent
Represented by:
For Appellant: Shri Kuntal Parikh, Advocate For Respondent: Dr. J. Nagori, Authorised Representative
For approval and signature:
Honble Mr. P.K. Das, Member (Judicial)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE MR. P.K. DAS, MEMBER (JUDICIAL)
Date of Hearing/Decision:28.05.2015
Order No.A/ 10697-10700/2015, dt.28.05.2015
Per: P.K. Das
A common issue is involved in these appeals and therefore, all are taken up together for disposal.
2. Heard both the sides and perused the records.
3. The Appellants are engaged in the manufacture of M.S. Ingots, classifiable under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. The Appellants discharged the duty liability on monthly basis under Rule 8 of Central Excise Rules, 2002. They failed to discharge the duty liability within the stipulated period. They paid duty during the defaulted period from their CENVAT account instead of paying in cash under PLA in contravention of Rule 8(3A) of Central Excise Rules, 2002.
4. The Hon'ble Gujarat High Court in the case of Indsur Global Ltd Vs Union of India 2014-TIOL-2115-HC-AHM-CX held that the portion without utilizing the CENVAT Credit of sub-rule (3A) of Rule 8 of Central Excise Rules, 2002 shall be rendered invalid.
5. The learned Authorised Representative for the Revenue submits that they have contravened the Rule and therefore, penalty should be imposed. It is further contended that they have not discharged the duty consignment-wise and therefore, they are liable to pay interest.
6. In view of the decision of Hon'ble Gujarat High Court in the case of Indsur Global Ltd (supra) the demand of duty by cash is not sustainable. As the Hon'ble Gujarat High Court declared the law invalid and therefore, the imposition of penalty is not warranted. However, Revenue is at liberty to raise the demand of interest, if there is a delay in payment of duty consignment-wise.
7. Accordingly, the impugned orders are set aside. The appeals filed by the Appellants are allowed.
(Dictated & Pronounced in Court)
(P.K. Das) Member (Judicial)
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