2012 (2) TMI 423

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....y utilising the Cenvat credit accumulated till the end of the month and balance to be paid in cash before the 5th of the succeeding month. If they do not pay the duty liability to be paid in cash by that appointed date, they can discharge such liability within another 30 days with interest at appropriate rate. If they do not pay such amounts during such grace period they are treated as defaults and are not allowed to utilise the Cenvat credit. During default assessee has to pay excise duty on goods cleared from their factory on each clearance by paying duty through cash, without utilizing Cenvat credit, till such default is made good. 2. During the scrutiny of ER-I returns for the month of October 07, November 07 and December 07 fil....

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....paid through Cenvat credit during the defaulting period is not legally maintainable. They also contest that they had no intention to evade payment of excise duty inasmuch as they had declared the excise duty liability and the fact that they were not able to pay duty liability due to their financial constraints during that period and for such delay in payment they have been already penalised by way of interest that was paid for delayed payments. Therefore they contest that the penalties imposed are not maintainable. 3. The A.R. for Revenue submits that Rule 8(3A) of Central Excise Rules, 2002 clearly provides that if the assessee is in default in payment of excise duty Cenvat credit cannot be utilised and even if such payment is made....