2015 (10) TMI 1810 - AT - Central Excise

Tribunal Upholds Ruling Against Revenue on Duty Discharge Issue

The Appellate Tribunal CESTAT Ahmedabad, in a case concerning the failure to discharge duty in a timely manner under Rule 8 of the Central Excise Rules ... Duty demand - violation of Rule 8 (3A) of the Central Excise Rules, 2002 - Held that:- Respondent failed to discharge duty in due time under Rule 8 of the Central Excise Rules 2002. It is seen that the respondent discharged the duty during defaulted period partly through cenvat account. The Adjudicating Authority demanded the duty which was paid through cenvat account for violation of Rule 8 (3A) of the Central Excise Rules, 2002. The Commissioner (Appeals) allowed appeal filed by the respondents. It is seen that the issue is covered in favour of the respondents as per the decision of the Hon’ble High Court, Gujarat in the case of Indsur Global Ltd., vs Union of India - [2014 (12) TMI 585 - GUJARAT HIGH COURT]. - No merit in the appeal filed by the Revenue - Decided against Revenue. Issues: Failure to discharge duty in due time under Rule 8 of Central Excise Rules 2002, demand of duty paid through cenvat account, appeal decision based on High Court ruling.The judgment by Appellate Tribunal CESTAT Ahmedabad, delivered by Mr. P.K. Das, addresses the issue of the respondent's failure to discharge duty in due time under Rule 8 of the Central Excise Rules 2002. The respondent had partially discharged the duty during the defaulted period through the cenvat account. The Adjudicating Authority demanded the duty paid through the cenvat account for violating Rule 8 (3A) of the Central Excise Rules 2002. However, the Commissioner (Appeals) allowed the appeal filed by the respondents, citing a decision of the Hon'ble High Court of Gujarat in a similar case. The High Court's ruling emphasized that the restriction imposed by Rule 8 (3A) was unreasonable and arbitrary, violating constitutional rights. The High Court held that the rule prevented the assessee from availing credit of duty already paid, which was against the constitutional guarantee of the right to carry on trade or business. Based on this precedent, the Tribunal found no merit in the Revenue's appeal and rejected it.In conclusion, the Tribunal upheld the decision in favor of the respondents, considering the High Court's ruling on the unreasonableness and arbitrariness of Rule 8 (3A) of the Central Excise Rules 2002. The judgment highlights the importance of constitutional rights and the need for reasonable restrictions in tax laws, ultimately leading to the rejection of the Revenue's appeal.