TaxTMI 
TaxTMI 
2015 (9) TMI 934
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....d orders, but same has not been quantified. We accordingly, direct the Revenue to quantify the interest amount and appellant to deposit the same within a period of 8 weeks from the date of quantification of interest amount is informed to the appellant. 3. As regards payment of an amount of Rs. 16.70 lakhs, revenues objection was to the effect that Rs. 16.70 lakhs stand deposited from the Cenvat credit whereas the same was required to be deposited from cash, is not found favour with inasmuch as there are decisions of the Division Benches in the case of Solar Chemferts Pvt. Ltd. and Baba Vishkarma Engg. Co (P) Ltd. wherein it has been held that deposit through Cenvat credit during the period of default would only result in confirmation of interest to the Revenue that is the only loss to the Revenue. As such, we accept the deposit made through Cenvat credit as the deposits towards duty and held that entire duty stand paid by the appellant. 4. Further, we find that admittedly violation of provisions of Rule 8 attract penal provisions in terms of Rule 27 of the Central Excise Rules, in view of the order of Hon'ble Gujarat High Court in the case of CCE vs. Saurashtra Cement Ltd. re....
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....he same in the Bank. The said practice as adopted by the noticee clearly indicates that the notice kept the Department in dark by declaring the central excise duty payment in their monthly ER-1 returns but the same was not actually paid by them. Further security of ER-1 returns and subsequent enquiry revealed that the noticee has enclosed bogus counterfoils of the cheques having stamp of Punjab National Bank branch. However, the fact is that the said cheques were never presented to the Bank. Thus, the said acts of notice despite having full knowledge that they were not having sufficient funds in their Bank account appear to be deliberate and also to mislead and deceive the department." Default in payment of central excise duty in cash a through account current. 10. It is seen from SCN that M/s BAL has defaulted in payment of duty due for the mouths beginning from March 2008, April 2008, May 2008, June 2008, July2008, August 2008, Sept 2008, Oct 2008, Nov 2008, Dec 2008. In case of default, provision of Rule 8(3A) of central excise rule 2002 are applicable once default exceeds stipulate time limit of 30 days. Table B given below clearly brings out position:- Table B ....
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....ufficient fund Cleared on 04.08.08 2. 16.07.08 079925 206000.00 22.08.08 3. 19.07.08 079926 190550.00 22.08.08 4. 31.07.08 904008 92700.00 22.08.08 5. 31.07.08 904007 515000.00 22.08.08 Cheques returned due to insufficient fund 6. August'08 04.08.08 079928 206000.00 Cheque was not presented to the bank 7. 07.08.08 079930 92700.00 Cheques returned due to insufficient fund 8. 09.08.08 079931 46350.00 9. 12.08.08 079932 257500.00 10. 14.08.08 079933 206000.00 11. 19.08.08 079935 92700.00 12. 19.08.08 079936 103000.00 13. 22.08.08 079937 206000.00 14. 26.08.08 079938 103000.00 15. 28.08.08 079939 206000.00 16. Sept.'08 04.09.08 079940 206000.00 08.09.08 Cheques returned due to insufficient fund 17. 09.09.08 079941 206000.00 20.09.08 18. 12.09.08 079944 206000.00 15.09.08 19. 18.09.08 079945 206000.00 Cheques not presented to the Bank 20. ....
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....t it is squarely applicable in respect of rule 8(3A). 15. In a recent judgment delivered by Hon'ble High Court of Madras in the case of Unirols Airtex Vs. Assistant Commissioner of Central Excise, Coimbatore reported in 2013 (296) E.L.T. 449 (Mad.) Hon'ble Court has also taken similar view holding that assessee is liable to pay excise duty in accordance with the Central Excise Rules 2002 with interest for belated period and no provision for utilizing Cenvat credit for such belated payment. Para 12 of the Judgement declaring law is reproduced for appreciation:- "12. Rule 8 (3A) categorically states that the assessee shall pay excise duty for each consignment at the time of removal, without utilizing the Cenvat credit till the assessee pays the outstading amount including interest thereon. The consequence for non-payment of excise duty is also indicated in the very same section as it provided that in case of failure to pay the amount, it shall be deemed that such goods have been cleared without payment of duty and the consequence of penalties as provided in the rules would follow. Rule 8(3A) does not permit the assessee to pay the excise duty by using the Cenvat credit. The pro....
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....r already reversed amount of Rs. 16.70 lakh paid through Cenvat credit is directed to be paid through PLA/current account. 21. On deposit of penalty and reversal of payment through Cenvat credit and subsequent payment from PLA, balance amount of penalty and duty shall remain stayed till disposal of the appeal. Order accordingly. Difference of Opinion Whether payment of duty arising out of default, is to be paid thought Cenvat credit and pre-deposit of penalty is to be restricted to Rs. 5,000/- held by Member (Judicial) based on judgment of Hon'ble Gujrat High Court in the case of Saurashtra Chemicals. Or Whether payment of duty arising out of default, is to be paid through cash/current account as per provisions of Rule 8 and Rule 8(3A) based on Gujrat High Court Judgment Harash Silk Industries 2013 (288) ELT 74 (Gujrat) and Hon'ble Madras High Court judgment in the case of Urirols Airtex Vs. Assistant Commissioner Coimbator 2013 (296) ELT 449 (Mad.) and in view of mis-presentation and fraud, pre deposit of Rs. 25 lakhs is to be directed as held by Member (Technical) Sd/- ....
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....xempted and avail the Cenvat credit of Central Excise duty paid on inputs and capital goods and of service tax paid on input services as per the provisions of Cenvat Credit Rules, 2004. During the scrutiny of the ER-1 returns filed by the appellant during March 2008 to June 2008 period, it was observed that the appellant had defaulted in payment of duty in as much as the duty paid by them for each month was less than the duty mentioned as payable in the ER-1 return for that month. Subsequently the Range Superintendent also verified the duty payment by the appellant for the period from July 2008 to November 2008 and for this purpose he wrote to the Branch Manager, Punjab National Bank, Ambala Road, Saharanpur, where the duty had been paid, for verification about the validity or genuineness of the cheques deposited by the appellant against their duty liability and also report as to whether or the amounts mentioned in the cheques had actually been credited to the Government account. The Branch Manager of the said bank vide his letter dated 29/12/08 informed that out of 32 cheques presented by the appellant for payment of duty only, one cheque of Rs. 92,700/- had been credited to the G....
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....i Malik used to give him the TR-6/GAR-7/ cheque counter foil which were enclosed in the ER-1 return. The total defaulted amount payable by the appellant company appeared to be Rs. 88,80,352/- and it also appeared that the appellant had concealed his default from the Department and had tried to hoodwink the Department either by mentioning the cheque numbers of the cheques which were never presented in the bank or by presenting the cheques in the bank without having sufficient balance. Accordingly, a show cause notice dated 26/07/11 was issued to the appellant company and his Managing Director Shri Feroz Malik for - (a) demand of Central Excise duty amounting to Rs. 88,80,952/- alongwith interest thereon under Section 11AB of the Central Excise Act, 1944 readwith Rule 8 (3) of Central Excise Rules, 2002 ; (b) appropriation of an amount of Rs. 32,71,166/- already paid by the appellant before the issue of show cause notice against their duty liability of Rs. 88,80,952/- ; and (c) imposition of penalty on the appellant company under Rule 25 of the Central Excise Rules, 2002 readwith Section 11AC of Central Excise Act, 1944 and on Shri Feroz Malik, Shri S.K. Jain and Shri Vikas ....
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.... difference of opinion between Hon'ble Member (Judicial) and Hon'ble Member (Technical), the following point has been referred to the undersigned for decision :- "whether payment of duty arising out of default is to be paid through Cenvat credit and pre-deposit of penalty is to be restricted to Rs. 5,000/- as held by Hon'ble Member (Judicial) based on the judgment of Hon'ble Gujarat High Court in the case of CCE & Customs vs. Saurashtra Cement Ltd. reported in 2010 (260) E.L.T. 71 (Guj.); or whether payment of duty arising out of default, is to be paid through cash/current account as per the provisions of Rule 8 (3A) based on Hon'ble Gujarat High Court judgment in the case of CCE vs. Harish Silk Industries - 2013 (288) E.L.T. 74 (Guj.) and Hon'ble Madras High Court judgment in the case of Unirols Airtex vs. Assistant Commr. of C. Ex., Coimbatore - 2013 (296) E.L.T. 449 (Mad.) and in view of mis-representation and fraud pre-deposit of Rs. 25,00,000/- is to be directed, as held by Member (Technical)." 26. Heard both the sides in respect of the point of difference. 27. Shri Alok Arora, Advocate, the learned Counsel for the appellant, pleaded that in view of the j....
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....by Hon'ble Member (Technical), pleaded that this is not a case of ordinary default in failure to discharge the monthly duty liability by the due date, that in this case the appellant company had hoodwinked the Department by presenting cheques to the banks without having sufficient balance which bounced and also by reporting payment in the ER-1 returns by mentioning the cheque numbers while no such payments of duty had been made, that this action of the appellant amounts to removal of the goods without payment of duty and as such in such a case, penalty under Rule 25 (1) of Central Excise Rules, 2002 readwith Section 11AC would be justified, that in this case, the failure to discharge the monthly duty liability by the due date had continued beyond the period of one month from the due date and, therefore, the appellant after expiry of one month from the due date had forfeited the facility to pay duty on monthly basis and by utilising through Cenvat credit and that during such forfeiture period, appellant company was required to discharge duty liability only through PLA, that in view of this, even if during the forfeiture period the appellant had paid duty through Cenvat credit, the s....
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.... been correctly ordered. He, therefore, pleaded that it is the order recorded by Hon'ble Member (Technical), which is correct. 29. I have carefully considered the submissions from both the sides and perused the records. 30. During the forfeiture period, the appellant had paid duty of Rs. 16.70 lakhs through Cenvat credit while in terms of the provisions of Rule 8 (3A) during this period, the appellant, notwithstanding anything contained in sub-Rule (1) and sub-Rule (4) of Rule 3 of Cenvat Credit Rules, 2004, were required to pay duty through cash without utilising the Cenvat credit and that too consignmentwise and not on monthly basis. However, the appellant during forfeiture period have paid duty of Rs. 16.70 lakhs through Cenvat credit. Though the Tribunal in the cases of Baba Viswakarma Engg. Co. (P) Ltd. vs. CCE, Ghaziabad (supra) and Solar Chemferts Pvt. Ltd. vs. CCE, Thane - I (supra) and also in the case of Meenakshi Associates vs. CCE, Noida reported in 2013 (295) E.L.T. 578 (Tri. - Del.) has held that once the defaulted amount of duty has been paid, the payment of duty through Cenvat credit during forfeiture period become good payment and there is no requirement to p....