Tribunal Overturns Duty Payment Demand, Citing Rule 8(3A) as Unsustainable; Appeal Allowed with Relief.

The Tribunal set aside the demand of Rs.74,26,040/- along with interest and penalties against the appellant for default in duty payment under Rule 8 of the Central Excise Rules, 2002. The Tribunal found Rule 8(3A) to be unsustainable, as it had been struck down by various HCs as ultra vires. Consequently, the appeal was allowed with any consequential relief as per law, aligning with established legal precedents and pending appeals before the SC.

---

---

Issues involved: Determination of demand against the appellant for default in making monthly payment of duty under Rule 8 of Central Excise Rules, 2002.

Summary:
The appeal was filed against an Order-in-Original passed by the Commissioner of Central Excise, Bangalore, regarding default in duty payment by the appellant. The appellant, engaged in manufacturing excisable goods, availed CENVAT credit but defaulted in duty payment for May 2008. A demand of Rs.74,26,040/- was held recoverable along with interest and penalty. The appellant contended that Rule 8(3A) of Central Excise Rules, 2002 had been struck down by various High Courts as ultra vires. The Tribunal, following similar judgments, set aside the demand and penalties imposed, as the rule was deemed unsustainable. The appeal was allowed with consequential relief, if any, as per law.

The appellant had paid the differential amount and interest, but the demand was still held against them. The Tribunal considered the legality of the demand based on the struck down Rule 8(3A) of Central Excise Rules, 2002. The Tribunal noted that multiple High Courts had invalidated the rule, and appeals against these judgments were pending before the Supreme Court. The Tribunal followed the decision of the High Courts and held the demand as unsustainable, setting it aside along with the penalties imposed on the appellant.

In conclusion, the Tribunal agreed with the decision in a similar case and set aside the impugned order, allowing the appeal with any consequential relief as per law. The judgment highlighted the inconsistency regarding the validity of Rule 8(3A) of Central Excise Rules, 2002, across different High Courts and emphasized the importance of following established legal precedents in such matters to ensure fairness and consistency in decisions.

---