Appeal reinstated after Misc. App. approval for disputing CENVAT Credit use in Excise Duty payment.

The appeal against the Order-in-Original was restored after a Misc. Application was allowed. The appellant, involved in manufacturing, disputed the mode of paying Central Excise Duty, arguing for CENVAT Credit validity. The Tribunal, considering various High Court decisions, held Rule 8 (3A) ultra vires and allowed duty payment using accumulated CENVAT Credit during default periods. The demand for cash payment was set aside, aligning with High Court rulings, emphasizing the legality of using CENVAT Credit for duty payment during defaults.

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Issues:
1. Restoration of appeal against Order-in-Original dated 25.11.2008.
2. Default in payment of Central Excise Duty by the appellant.
3. Validity of making payment through CENVAT Credit account.
4. Interpretation of Rule 8 (3A) of the Central Excise Rules, 2002.
5. Applicability of High Court decisions on the demand of duty.

Analysis:
1. The appeal (E/76/2009) was filed against Order-in-Original No.10/Commissioner/CE/Kol-IV/2008 dated 25.11.2008, which was dismissed for failure to make a pre-deposit ordered by the Tribunal. The appellant filed a Misc. Application for restoration of the appeal, which was allowed, and the appeal was restored to its original number.

2. The appellant, engaged in the manufacture of furnace and ovens, defaulted in paying Central Excise Duty in October and November 2005. The entire defaulted amount was paid later, but a dispute arose regarding the mode of payment. The Revenue contended that duty should be paid in cash on a consignment to consignment basis, while the appellant argued that payment through CENVAT Credit should be considered valid.

3. The appellant's position was that payment through CENVAT Credit should be accepted as valid duty payment. The Revenue, citing Rule 8 (3A) of the Central Excise Rules, 2002, insisted on cash payment during default periods. The appellant challenged this interpretation.

4. The Tribunal noted that Rule 8 (3A) has been declared ultra vires by various High Courts, including Gujarat, Punjab & Haryana, and Madras. The Calcutta High Court also followed the Gujarat High Court's decision, holding the relevant portion of the rule as ultra vires. Consequently, the Tribunal concluded that accumulated CENVAT Credit could be used for duty payment even during default periods.

5. As a result, the impugned order demanding duty payment in cash was set aside, and the appeal was allowed based on the interpretation of Rule 8 (3A) and the applicability of High Court decisions. The Tribunal's decision aligned with the rulings of various High Courts, emphasizing the legality of using CENVAT Credit for duty payment during default periods.

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