Appeals Allowed: Tribunal Rules in Favor of Cenvat Credit Payment

The appeals filed by M/s Baba Vishwakarma Engineering Co. (P) Ltd. & Shri Anupam Kamboj were allowed as the Tribunal found that the issue regarding contravention of Rule 8 (3A) of the Central Excise Rules, 2002 was already settled in a previous case. The Tribunal held that payment through Cenvat credit was a valid mode of payment, not limited to payment through Account Current, as established in a prior ruling. Consequently, the demand under Rule 8 (3A) for the relevant period was set aside, and the impugned order was overturned.

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Issues:
Applicability of Rule 8 (3A) of the Central Excise Rules, 2002 regarding contravention by the appellant-assessee.

Analysis:
The appeals filed by M/s Baba Vishwakarma Engineering Co. (P) Ltd. & Shri Anupam Kamboj, Director of the company, were against Order-in-Original No. 05/Commissioner/GZB/2009 dated 20/05/2009 passed by Commissioner of Customs, Central Excise & Service Tax, Ghaziabad. The main issue revolved around the contravention of Rule 8 (3A) of the Central Excise Rules, 2002 by the appellant-assessee during the period from May, 2007 to December, 2007. A separate Show Cause Notice was issued demanding Cenvat credit amounting to &8377; 1,58,56,152/- for the said period. However, a Final Order of the Tribunal dated 24/07/2015 had already settled the issue related to this amount, holding that the proceedings under Rule 8 (3A) were not sustainable. Consequently, the appeal was allowed in that case.

The present appeal was an offshoot of the same default, referring to a Show Cause Notice dated 20th July, 2008. It was noted that the appellant had made duty payments through Cenvat credit for the months of January, February, March, April, May, June, and July 2008, which should have been paid in Cash and on a consignment-wise basis as per Rule 8 (3A). However, the Tribunal observed that the issue concerning the months of July and September 2008 had already been settled in the case of GEI Industrial System Ltd. versus Commissioner of Central Excise, where it was held that payment through Cenvat credit was a valid mode of payment, not limited to payment through Account Current. Citing the ruling of the Apex Court in Jayaswal Neco Ltd., the Tribunal set aside the demand under Rule 8 (3A) for these months, allowing the appeal.

In conclusion, the Tribunal found that the issue in the present case was squarely covered by the ruling in the GEI Industrial System Ltd. case. Therefore, the appeals were allowed, and the impugned order was set aside.

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