2016 (8) TMI 348 - AT - Central Excise

Tribunal allows appeal, sets aside duty recovery order under Central Excise Rules.

The Tribunal allowed the appeal, setting aside the order for recovery of duty and interest under Central Excise Rules. Relying on precedents declaring ... Demand - Default in monthly payment of duty which was paid belatedly - Contravention of provisions of Rule 8(3A) of Central Excise Rules 2002 - Held that:- the issue is no more res integra and stands settled in favour of the appellant. By following the law laid down by the Honb'le High Court of Gujarat in the case of Indsur Global Ltd. Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT], which was subsequently followed by the same High Court in the case of Shreeji Surface Coatings Pvt. Ltd. Vs. Union of India [2014 (12) TMI 656 - GUJARAT HIGH COURT] and thereafter followed by the Madras High Court in the case of A.R. Metallurgicals P Ltd. Vs. CESTAT, Chennai [2015 (5) TMI 661 - MADRAS HIGH COURT] and also followed by the Tribunal in the case of Neesa Infrastructure Ltd. Vs. CCE and Om Shakthi Hydraulics Pvt. Ltd. Vs. CCE, Bangalore-II [2016 (5) TMI 838 - CESTAT BANGALORE], the impugned order is unsustainable in law and set aside. - Decided in favour of appellant with consequential relief Issues:Appeal against recovery of duty and interest under Central Excise Rules for default in payment.Analysis:The appeal was against an order upholding the recovery of duty and interest by the Commissioner (Appeals) due to default in the monthly payment of excise duty. The appellant, engaged in manufacturing machinery parts, had contravened Rule 8(3A) of Central Excise Rules by delaying payment. The appellant challenged the demand, citing judgments declaring Rule 8(3A) as unconstitutional, including the cases of Indsur Global Ltd. vs. Union of India and Shreeji Surface Coatings Pvt. Ltd. vs. Union of India. The appellant argued that the demand for duty in cash, despite utilizing cenvat credit, was unjust. The learned counsel emphasized that the issue had been settled in favor of the appellant by various judgments.The appellant's counsel relied on precedents from the High Courts of Gujarat and Madras, along with CESTAT decisions, to support the argument that the impugned order was unsustainable under the law. The judgments cited highlighted the unconstitutionality of Rule 8(3A) and the harshness of demanding duty without allowing the utilization of cenvat credit. The counsel contended that the issue was no longer open to debate and stood resolved in favor of the appellant based on the cited judgments.In the analysis, the Tribunal considered the arguments presented by both parties and reviewed the relevant judgments, particularly those from the High Courts and CESTAT. The Tribunal found that the issue was settled in favor of the appellant based on the judgments declaring Rule 8(3A) as unconstitutional. The Tribunal held that the impugned order was not sustainable in law and set it aside, allowing the appeal of the appellant with consequential relief, if any. The Tribunal's decision was influenced by the legal precedents cited, which rendered the demand for duty and interest under Rule 8(3A) invalid.Overall, the Tribunal's decision was based on the legal principles established in the cited judgments, which deemed Rule 8(3A) as unconstitutional and supported the appellant's position. The Tribunal's analysis focused on the legality of the demand for duty and interest in cash, considering the appellant's use of cenvat credit and the precedents that had already settled the issue in favor of the appellant.