TaxTMI 
TaxTMI 
2016 (4) TMI 15
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....to 31.03.2001 and an amount of Rs. 9.73,159/- on the clearances made during the period 01.04.2001 to 06.04.2001 and proposed penalty under Rule 173Q read with Rule 25 of CER, 2001. On adjudication, the adjudicating authority confirmed the demands proposed under the SCN and imposed a penalty of Rs. 14,000/- under Rule 173Q read with Rule 25 of CER, 2001. On appeal, the Commissioner (Appeals) dismissed the appeal for lack of merits. Appeal No. E/1033/2005 3. The brief facts of the case are that the appellants are manufacturers of Cotton yarn falling under CH 52 and man made staple fibre yarn falling under 55 of CETA, 1985 and are required to pay excise duty on fortnightly basis in accordance with Rule 173-G(1) of CER, 1944. A SCN dated 01.08.2002 was issued proposing duty of Rs. 10,64,750/- under Section 11(A) 1 of CEA, 1944 along with applicable interest and imposition of penalty under Rule 25 read with Section 38A of CEA, 1944. On adjudication, the adjudicating authority confirmed the demand of Rs. 10,64,750/- along with interest and imposed equivalent penalty under Rule 25 of CER, 2004read with Section 38a of CEA,44. On appeal, the Commissioner (Appeals) upheld the demand an....
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....se appeals relates to whether appellants have not paid central excise duty on consignment basis during default period and also utilized cenvat credit for payment of duty against the provisions of Rule 8 (3A) of CER. Adjudicating authority invoked the provisions of Rule 8 (3A) of CER 2002 and confirmed the demands and also appropriated the amount already paid in P.L.A. towards payment of duty. The Hon'ble High Court of Madras in the recent judgement in the case of Malladi Drugs & Pharmaceuitcals Ltd. Vs UOI (supra) and A.R. Metallurgicals Pvt. Ltd. (supra) decided batch of writ petitions and struck down Rule 8(3A) as ultra vires and allowed the writ petitions of assessees. The Hon'ble High Court of Madras in their order concurred the Gujarat High Court judgement in the cases of Indusur Global Ltd. and Precision Fasteners Ltd (supra). The relevant paragraphs of the High Court, Madras in the case of Malladi Drugs & Pharmaceuticals Ltd. are reproduced as under :- This batch of writ petitions challenges the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, which was introduced with effect from 1.6.2006, and the said Rule reads as follows:- ....
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....s removed from the factory or the warehouse as provided thereunder. Sub-rule (2) of Rule 8 extends the benefit of duty to the third party purchaser, who buys the excisable goods removed by the assessee and such goods are deemed to have suffered duty of excise. Under sub-rule (3) of Rule 8, interest is liable to be paid on the outstanding amount, if the assessee fails to pay the duty by the due date. In contradiction to this procedure, sub-rule (3A) of Rule 8 provides that in default of the payment of duty beyond thirty days from the due date as prescribed under sub-rule (1), notwithstanding anything contained in sub-rule (1) and sub-rule (4) of Rule 3 of CENVAT Credit Rules, 2004, the assessee is bound to pay excise duty at the time of removal without utilizing the CENVAT credit till the date the assessee pays the outstanding amount including interest thereon. The right to pay duty by utilising the CENVAT credit that had accrued cannot be defeated, unless it is a case of illegal or irregular credit (See the decision of the Supreme Court in Dai Ichi Karkaria Ltd., referred supra). To that extent, we find this sub-rule (3A) arbitrary and therefore violative of Article 14. The right t....
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....nd of delay beyond his power to condone. The Tribunal had dismissed further appeal on the ground of gross delay of three years in preferring the appeal before the Tribunal as also on the ground that in any case the Commissioner was right in not entertaining the appeal of the assessee which was presented along with the application for condonation of delay after the maximum period which the Commissioner could have condoned. It was in this background the Court held that the issues which are closed cannot be reopened. It was noted that there were other proceedings between the same assessee and department pending at various stages on same issue. It was, therefore, provided that the particular order in challenge would not be disturbed but that the benefit of declaration of invalidity of the rule would be available to the petitioner in other pending proceedings. 7. In view of such clear distinction in facts, the modus adopted in the said case in case of Indsur Global Ltd., (supra) cannot be applied in the present case. The impugned tax demands and show cause notice are set aside. Resultantly, all subsequent actions, if any, taken by the department would be set at naught. Petition....