Rule 8(3A) demand under Central Excise law failed after the provision was held unconstitutional, defeating Revenue's appeal.

Rule 8(3A) of the Central Excise Rules, 2002 could not support denial of duty payment through the Cenvat account where the Gujarat HC had already held the rule unconstitutional. The proposed demand, along with interest and penalty under Rule 8(3A) read with section 11A of the Central Excise Act, 1944, was therefore unsustainable. On that basis, the tribunal upheld the order setting aside the adjudication order and rejected the Revenue's appeal in favour of the assessee.

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Issues: Whether the demand raised for payment of duty from the Cenvat account under Rule 8(3A) of the Central Excise Rules, 2002 could be sustained, and whether the Revenue's appeal against the order setting aside the adjudication order was liable to be rejected.

Analysis: The respondent had delayed payment of monthly duty, and the show cause notice proposed disallowance of duty payment from the Cenvat account with interest and penalty under Rule 8(3A) of the Central Excise Rules, 2002 read with Section 11A of the Central Excise Act, 1944. The order noted that the Gujarat High Court had held Rule 8(3A) unconstitutional, and on that basis found no reason to interfere with the Commissioner (Appeals)' order.

Conclusion: The demand based on Rule 8(3A) could not be sustained, and the Revenue's appeal was rejected in favour of the assessee.

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