Provision of Rule 8(3) of CER

[Asked by Guest]

Rule 8(3) deals with the case of defaulter in payment of duty within 30 days from the due date and in case of default the goods cleared will be treated as not suffered any duty incidence and the assessee will have to pay consignment wise duty in cash without using Cenvat credit. The board circular says the default amount is a confirmed demand and action under section 142 of Customs Act for attachment and auction should be initiated in order to recover the dues.

Simultaneously there is always wrong utilisation of Cenvat credit and non payment of duty throgh Cash. Here comes into picture the Section 11A of the Central Excise Act which stipulates for non payment of duty a SCN to be issued and to be adjudicated.

No doubt Section prevails over rule and circulars therefore, it appears that raising demand ios a better option but few arguments are there that by raising demand you are converting confirmed demand into a dispute and delaying recovery proceedings.

Kindly comment on this dilemma.

AI Summary

Penalty for delayed duty payment now prescribed for failure to pay declared duty within specified period.
Rule 8(3A) formerly deemed goods cleared without payment and required consignment wise cash payment without using Cenvat credit on default; administrative practice contemplated attachment and auction while Section 11A required issuance of a show cause notice. The 2014 substitution of sub rule (3A) replaces deemed clearance and cash restriction with a monthly penal charge on unpaid declared duty where payment is not made within the prescribed one month period from the due date, resolving the tension between executive recovery and adjudication.