TaxTMI 
TaxTMI 
2015 (7) TMI 581
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.... at the time of removal without utilizing the cenvat credit till the date the assessee pays the outstanding amount including interest thereon and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and consequences and penalties as provided in these Rules shall follow. However, the appellant continued to clear the goods without following the provisions of Rule 8(3A) from 6.12.2010 to 14.12.2010. Similarly, the appellant defaulted in monthly payment for the clearances made during November and December 2010 and even in respect of clearances made in November 2010 they violated the provisions of Rule 8(3A) from 6.1.2011 to 7.1.2011. In respect of default in payment during December 2010, they....
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.... of the said decisions of the Hon'ble High Court of Gujarat, the issue is no more res integra and the impugned order is required to be set aside. 2.1 The learned counsel also submitted that without prejudice to the said argument, no penalty can be imposed under Rule 25 read with Section 11AC in the facts of the instant case as held by the Hon'ble Gujarat High Court in the case of CCE vs. Saurashtra Cement Ltd. reported in 2010 (260) ELT 71 (Guj.) which has been affirmed by the Hon'ble Supreme Court in 2013 (292) ELT A98 (SC). 3. The learned AR, on the other hand, argued that a perusal of the judgment of the Hon'ble High Court of Gujarat would indicate that the Hon'ble High Court has only stated that restriction on util....
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.... to the conclusion that penalty cannot be imposed under Rule 25 as none of the sub-clause (a), (b), (c) or (d) were inovkable in the facts and circumstances of the case. In view of the said position, the case law is not applicable and penalty has been correctly imposed. He further submitted that the first appellate authority has already reduced the penalty substantially and hence the impugned order may be upheld. 4. I have gone through the submissions of both the sides and also the judgments quoted by the learned counsel for the appellant. To appreciate the issue, the provisions of Rule 8(3A) are reproduced below:- "If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notwit....
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....riction. It leads to a situation so harsh and a position so unenviable that it would be virtually impossible for an assessee who is trapped in the whirlpool to get out of his financial difficulties. This is quite apart from being wholly reasonable, being irrational and arbitrary and therefore, violative of Article 14 of the Constitution. It prevents him from availing credit of duty already paid by him. It also is a serious affront to his right to carry on his trade or business guaranteed under Article 19(1)(g) of the Constitution. On both the counts, therefore, that portion of sub-rule (3A) of rule must fail. 35. The situation can be looked at slightly different angle. With or without the provisions of sub-rule (3A), liability to pay inter....
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.... in para 35 as also the earlier paras, all other provisions of Rule 8(3A) have been considered as correct and perfectly legitimate. Keeping in view the judgment of the Hon'ble High Court of Gujarat, Rule 8(3A) would imply that if the assessee defaults in payment of duty beyond 30 days from the due date, the assessee shall pay excise duty for each consignment at the time of removal till the date the assessee pays the outstanding amount including interest thereon and in the even of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow. Thus, as per rule 8(3A) and the judgment of the Hon'ble Gujarat High Court, the appellant w....
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.... a registered dealer , as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or two thousand rupees, whichever is greater. It would be seen that the present situation is covered by clause (a) of Rule 25(1) as the appellant has removed the excisable goods without payment of duty consignment-wise. It would thus be seen that the appellant has contravened Rule 25(1)(a) and, therefore, the goods cleared during the period are liable to confiscation and the appellant is also liable to penalty not exceeding the duty on the excisable goods. 4.3 I have also gone ....