TaxTMI 
TaxTMI 
2015 (10) TMI 965
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....The appellants deposited the short payment of duty of their Thane unit, that is an amount of Rs. 1,92,64,293/- through their common LTU CENVAT account on 26/03/2013. They paid the interest of Rs. 4,56,009/- in cash. The revenue was of the view that the reversal of the credit made in the CENVAT account in the month of March was not a proper payment of duty and hence the default which started in January, continued. Accordingly, a demand notice under rule 8 (3A) was issued in respect of entire clearances from 26.03.2013 to 31.12.2013. An amount of Rs. 31,85,56,189/- was demanded to be paid in cash. The appellants had already paid this amount in CENVAT account however under the said rule the entire amount was sought to be collected in cash. The said notice was confirmed by the Commissioner. 2. The appellants are in appeal against the said order. The appellants have not deposited the required pre-deposit under Section 35F of the Central Excise Act, 1944. Hence a notice for maintainability was issued by the Registry. The short issue before us if this appeal is maintainable without the mandatory pre-deposit prescribed under section 35F of the Central Excise act 1944. 3. The appellan....
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.... period of default is a separate consequence but not critical in deciding whether the assesses continues to be in default. 4. The appellants also relied upon the decision of Tribunal in case of Neesa infrastructure 2015 (321) ELT 328. They also relied on the decision of Hon'ble Gujarat High Court decision in case of Indsur Global Ltd 2014 (310) ELT 833 wherein it has been held that rule 8 (3A) is unconstitutional. 5. The learned AR argued that in the stage of maintainability the merits of the case cannot be examined. He argued that for the purpose of maintainability only section 35F can be considered. He argued that in view of Section 35F (ii) the appeal of the appellants cannot be entertained unless appellants deposit specified amount in terms of Section 35F. He argued that if any cognizance is taken of the reversal of amounts made in the CENVAT account it would amount to entertainment of appeals and pronouncement on the merits of the appeal. For this purpose he relied on the decision of Tribunal in case of CIRON Drugs and Pharmaceuticals (order number M/4064/15/EB). In the said case the appellants had claimed that certain deposits were made by them during the investigat....
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....he payment utilising Cenvat credit is an approved manner of payment of duty by these rules. It is equally true that even in the absence of such a provision contained in Rule 173G (1)(b) accepting the mode of payment utilising Cenvat credit, an assessee, even by virtue of the provisions contained under Rule 49 read with Rule 57A, will be entitled to utilise such input credit. In other words, there is force in the contention of the assessee that Rule 173G does not give any benefit of any input credit and merely by referring to the entitlement of the assessee to use the Cenvat credit again under Rule 173G and further providing that the assessee has to pay the duty during the suspended period for each consignment by debit from the account current only in no way will have the effect of taking away the already conferred benefit by separate rule. So long as no amendment is brought out to Rule 49 or Rule 57A, as the case may be, the consequences of making an assessee a defaulter and to deny him the benefit of utilising the input credit will become unworkable and ineffective. It has to be noticed as rightly pointed by the counsel appearing for the petitioner that the rule making authority t....
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....al Excise Rules, 2002 itself is amended by inserting sub-rule 3A vide Notification No. 17/05-C.E.(N.T.) dated 31.03.2005 w.e.f. 01.04.2005. This Rule now specifically provides that in case of default in making payment of duty, the assessee shall be required to pay excise duty for each consignment by debit to the account current and not by utilising Cenvat Credit. This also lends credence to our view which we have taken in respect of unamended provision that was applicable at the relevant time. From this it appears that the views of Hon Supreme Court on this issue are different from those of Hon High Court. Thus the law on the issue does not appear to be settled. 7. The short question to be decided is if the CENVAT debits made by the appellants during the period of default are sufficient for the purpose of section 35F. Tribunal, in the case of PMT machines (order number M/4027/15/STB), has considered the debit in CENVAT account sufficient compliance for the purpose of section 35F. A perusal of the said order shows that the same was not contested by the revenue and therefore cannot be relied as a precedent. In this case the revenue is a strongly contesting the same. Furth....