2018 (1) TMI 39 - AT - Central Excise

Tribunal Upholds Duty Demand, Sets Aside Appeal in Landmark Ruling

M/s R.K. Machine Tools Ltd. Versus Commissioner of Central Excise, Ludhiana

The Tribunal dismissed the appeals, holding that the duty demand under Rule 8(3A) of the Central Excise Rules, 2002 was valid. However, following the ... CENVAT credit - failure to pay duty from PLA account - Rule 8(3A) of the Central Excise Rules, 2002 - Held that: - said issue came up before this Tribunal in the case of R.B Industries [2017 (10) TMI 611 - CESTAT CHANDIGARH], where it was held that reliance placed in the case of M/s Space Telelink Ltd. [2016 (3) TMI 1261 - DELHI HIGH COURT], where the order of the Gujarat High Court in Indsur Global Ltd. v. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] has been stayed - the demand u/r 8(3A) of CER, 2002 is not sustainable - appeal allowed - decided in favor of appellant. Issues:Appeal against duty demand under Rule 8(3A) of Central Excise Rules, 2002 based on conflicting judgments.Analysis:The appellant appealed against the duty demanded under Rule 8(3A) of the Central Excise Rules, 2002. The appellant relied on the decision of the Hon'ble High Court of Gujarat in the case of Indsur Global Ltd., where it was held that the said rule is ultra vires. Additionally, the appellant cited the decision in the case of M/s Space Telelink Ltd., where the order was set aside. On the contrary, the respondent argued that the Hon'ble Apex Court had cited the judgment of the High Court of Gujarat, and thus, the matter should be kept pending. The Tribunal referred to a previous case involving R.B Industries, where it was observed that the decision of the High Court of Gujarat was challenged in the Hon'ble Apex Court, and a stay was granted on its operation. The Tribunal highlighted the distinction between quashing an order and staying its operation, emphasizing that the latter does not nullify the existence of the order. Therefore, the Tribunal held that the impugned order and reasoning did not warrant interference, aligning with the decisions of various High Courts. Consequently, the appeals were dismissed.In light of the decision in the case of M/s Space Telelink Ltd., the Tribunal concluded that the demand under Rule 8(3A) of the Central Excise Rules, 2002 was not sustainable against the appellant. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief.The judgment provides a detailed analysis of conflicting judgments and the legal implications of staying the operation of an order. It underscores the importance of understanding the impact of such stays on the validity and applicability of the underlying judgment. The Tribunal's decision was based on a thorough examination of the legal precedents and the specific circumstances of the case, ensuring a fair and reasoned outcome.