Tribunal allows appeal in cenvat credit case, citing Rule 8(3) contravention

The Tribunal set aside the impugned order and allowed the appeal in a case involving alleged wrongful availment of cenvat credit and contravention of Rule 8(3) of the Central Excise Rules, 2002 by a refractories manufacturer. The Tribunal held that there was no restriction on using accumulated cenvat credit for paying Central Excise Duty during a default period, citing relevant High Court decisions that declared a portion of Rule 8(3A) as ultra vires.

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Issues: Alleged wrong availment of cenvat credit, contravention of Rule 8 (3) of Central Excise Rules, 2002, legality of Rule 8 (3A)

In the case, the appellant, a refractories manufacturer, was accused of wrongly availing cenvat credit and contravening Rule 8 (3) of the Central Excise Rules, 2002. The Adjudicating Authority disallowed a cenvat credit of &8377; 14,44,343/- for May 2008 and demanded &8377; 25,83,63,285/- for the period from July 2008 to March 2009, imposing a penalty as well. The appellant argued that Rule 8 (3A) was struck down by various High Courts as ultra vires, citing relevant cases. The Advocate contended that accumulated cenvat credit could be used for payment even during a default period, based on court decisions. The Department, however, mentioned that the issue was pending before the Supreme Court as they had challenged the High Court decisions. The Tribunal considered the High Court rulings and noted the Calcutta High Court's decision declaring a portion of Rule 8 (3A) as ultra vires. Consequently, the Tribunal concluded that there was no restriction on using accumulated cenvat credit for paying Central Excise Duty during a default period. As a result, the impugned order was set aside, and the appeal was allowed.

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