Rule 8(3A) of the CER, 2002

[Rathnasabapathy V]

Rule 8(3A) of the Central Excise Rules, 2002 is held to be unconstitutional. Whether the order of the department confirming the demand is sustainable? what is the legal position?

What is the stand of the Department?

[KASTURI SETHI]

Pl. mention citation of case law of the court which has set aside Rule 8(3A) of Central Excise Rules, 2002. It will make convenient for experts to inform the status.

[DR.MARIAPPAN GOVINDARAJAN]

As informed by Shri K. Sethi you have not mentioned the case law in which Rule 8(3A) has been set aside. The said case may be gone for appeal by the Department and stay could have been obtained. If the order is getting finality in holding that the said Rule is unconstiutional, then the order passed by the Authority is invalid. Even you could have placed the said argument before the hearing with the Authority.

AI Summary

Unconstitutional rule may render departmental demand orders invalid unless the rule's operation is stayed pending appeal. If Rule 8(3A) has been judicially declared unconstitutional with a final, unstayed judgment, orders confirming demands based on that rule are legally vulnerable and may be invalidated; however, where the department has appealed or obtained a stay, or no finality has been reached, the demand may be sustained until final adjudication. Parties must cite the controlling case law and raise the objection before the authority to preserve the contention.