Appellant allowed to utilize cenvat credit during default period under Central Excise Rules

The appellant was found not liable to pay duty during the default period without utilizing cenvat credit under Rule 8(3A) of the Central Excise Rules, 2002. The Tribunal, following the precedent set by the Gujarat High Court in the case of Indsur Global Ltd., held that the provisions of Rule 8(3A) were ultravirus, allowing the appellant to utilize cenvat credit even during default periods. As a result, the impugned order was set aside, and the appeal was allowed.

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Issues involved: Whether the appellant is liable to pay duty during the default period without utilizing cenvat credit u/s Rule 8(3A) of Central Excise Rules, 2002.

Comprehensive details of the judgment:

1. The appellant's counsel argued that the bar on utilizing cenvat credit during the default period of monthly duty payment under Rule 8(3A) was deemed ultravirus by the Hon'ble Gujarat High Court in the case of Indsur Global Ltd. vs UOI. Subsequent judgments like Novatur Electrical & Digital System P. Ltd., Essar Steel India Ltd., Meenakshi Associates, and others followed this precedent, allowing cenvat credit utilization during default periods.

2. The Revenue's representative reiterated the findings of the impugned order.

3. Upon careful consideration and record perusal, it was found that the main issue was whether the appellant could use cenvat credit for excise duty payment during default periods as per Rule 8(3A). The Gujarat High Court's ruling in Indsur Global Ltd. case rendered Rule 8(3A) provisions ultravirus, enabling assessees to utilize cenvat credit even during default periods. This Tribunal had also issued judgments favoring assessees in line with the High Court's decision.

4. Given the established legal position favoring the appellant, the impugned order was deemed unsustainable and set aside, thereby allowing the appeal.

(Separate judgement not delivered by the judges)

(Pronounced in the open court on 15.09.2023)

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