2004 (3) TMI 187 - AT - Central Excise

Manufacturer's Duty Default Forfeiture Upheld with Recovery Directive

The Tribunal upheld the Order-in-Original forfeiting the manufacturer's fortnightly payment facility for Central Excise duty default, emphasizing ... Penalty - Fortnightly payment of duty - Demand Issues: Appeal against Order-in-Original regarding forfeiture of fortnightly payment facility, recovery of Central Excise duty, utilization of Cenvat credit, imposition of penalty, and legal requirements for recovery of duty.Forfeiture of Fortnightly Payment Facility:The appeal was filed against an Order-in-Original forfeiting the facility of fortnightly payment of Central Excise duty due to default in payment by the manufacturer. The manufacturer argued that the duty payment facility was optional and should not be enforced as a mandatory requirement. The Tribunal upheld the Order-in-Original, stating that defaulting in duty payment entails consequences as per Rule 8 of the Central Excise Rules, including penalties. The manufacturer's cross-objection was dismissed.Utilization of Cenvat Credit:The manufacturer cleared goods by debiting duty from Cenvat credit instead of paying through account-current as directed. The Tribunal clarified that once goods are deemed cleared without duty payment, recovery must be made under Section 11A(1) of the Central Excise Act. The Tribunal emphasized the legal requirement of issuing a show cause notice for duty recovery and imposition of penalties under Rule 25 of the Central Excise Rules. The matter was remanded to the Commissioner for re-adjudication following principles of natural justice.In conclusion, the Tribunal addressed the issues of forfeiture of payment facility, utilization of Cenvat credit, recovery of duty, and imposition of penalties. The manufacturer's appeal was dismissed, and the matter was remanded for re-adjudication by the Commissioner to ensure compliance with legal procedures and principles of natural justice.