Tribunal upholds excise duty demand, waives penalty, directs deposit within 8 weeks.

The Tribunal upheld the demand for excise duty with interest, denying the waiver of pre-deposit condition but dispensing with the penalty. The appellant was directed to deposit the duty demand of Rs. 1,10,61,274/- with interest within 8 weeks, with the penalty being waived upon compliance. Compliance was to be reported by a specified date.

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Issues:
- Waiver of pre-deposit condition of adjudged excise duty demand for hearing of appeal.

Analysis:
The appellant, a registered manufacturer of excisable goods, faced a shortfall of excise duty for goods cleared in July 2009, amounting to Rs. 3,93,607/-. A cheque issued for this amount was dishonored, leading to a delay in payment. The Commissioner alleged a violation of Rule 8(3A) of the Central Excise Rules, stating that the appellant should have paid the duty in cash after the default, instead of adjusting it against Cenvat credit. A show cause notice was issued, and the Adjudicating Authority disallowed Cenvat credit of Rs. 1,10,61,274/-, demanding it in cash with interest and imposing a penalty of Rs. 1 lakh.

The appellant contended that the delay was unintentional due to not being informed of the cheque dishonor, and paying the balance duty with interest later. The appellant argued against double taxation, as Cenvat credit was already utilized for subsequent clearances. The Departmental Representative emphasized Rule 8(3A), stating that the appellant's actions constituted a violation, leading to no grounds for waiving the pre-deposit condition.

Upon review, the Tribunal found that the dishonored cheque did not constitute payment, and there was a clear default in duty payment beyond 30 days. Rule 8(3A) mandated cash payment for subsequent clearances after default, which the appellant failed to comply with by using Cenvat credit. Consequently, the Tribunal upheld the demand for excise duty with interest, denying the waiver of pre-deposit condition but dispensing with the penalty.

Therefore, the appellant was directed to deposit the duty demand of Rs. 1,10,61,274/- with interest within 8 weeks, with the penalty being waived upon compliance. The Tribunal clarified that Cenvat credit entries contravening Rule 8(3A) would be reversed upon deposit, and recovery would be stayed accordingly. Compliance was to be reported by a specified date.

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