Tribunal allows Revenue's appeal, directs payment of demand, sets aside confirmed demand

The Tribunal allowed the Revenue's appeal, directing the assessee to pay the entire demand proposed in the Show Cause Notice due to discrepancies in quantifying duty demands. The assessee's challenge against the demand confirmation under Section 11A of the Central Excise Act was successful, with the Tribunal setting aside the confirmed demand. The Tribunal affirmed the compliance of duty payment through the Cenvat account as per Rule 8(3A) and reduced the penalty imposed under Rule 25 to &8377; 5,000, disposing of the appeals accordingly.

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Issues:
1. Discrepancy in Cenvat demand amount between impugned order and Show Cause Notice.
2. Legality of confirming demand under Section 11A of Central Excise Act, 1944.
3. Applicability of Rule 8(3A) of Central Excise Rules, 2002 regarding duty payment.
4. Validity of penalty imposed under Rule 25 of the Rules.

Analysis:
1. The Revenue contested the Cenvat demand discrepancy, arguing that the amount dropped in the impugned order was not part of the total demand proposed in the Show Cause Notice. The Tribunal found that the duty demands for different periods were not properly quantified by the adjudicating authority, leading to a discrepancy in the amounts. Consequently, the appeal was allowed in favor of the Revenue, directing the assessee to pay the entire demand proposed in the Show Cause Notice.

2. The assessee challenged the confirmation of demand under Section 11A of the Central Excise Act, contending that the duty liability had been discharged through the Cenvat account or the current PLA account with interest, as per Rule 8(3A) of the Central Excise Rules. Citing a judgment from the Gujarat High Court, the appellant argued that payment through the Cenvat account was compliant with the law. The Tribunal agreed with the assessee, setting aside the confirmed demand of &8377; 39,64,568/- and allowing the appeal in their favor.

3. Regarding the application of Rule 8(3A) of the Central Excise Rules on duty payment, it was established that the assessee had paid a portion of the duty from the PLA and the remaining amount from the Cenvat account with interest. The Tribunal noted the Gujarat High Court's ruling declaring the restriction on Cenvat credit utilization as ultra vires, allowing duty discharge through the Cenvat account. As the assessee had paid the duty in compliance with Rule 8(3A), the Tribunal deemed the payment to be in accordance with the law.

4. The imposition of penalty under Rule 25 for non-payment of duty consignment-wise was found justified due to the contravention of Rule 8(3A). However, considering the overall circumstances, the Tribunal deemed the penalty amount to be excessive and reduced it to &8377; 5,000 in the interest of justice. Consequently, the appeals were disposed of with the aforementioned decisions.

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