2016 (5) TMI 1199

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....and vide OC No. 498/2011 that duty has to be paid on consignment wise and that CENVAT Credit was not to be utilized for such payment of duty as such credit was not available in terms of Rule 8 (3A) of Central Excise Rules, 2002. The Appellant have paid the tax upon intimation of the short payment of tax along with interest on 06.03.2012 and 11.03.2012 respectively. 2. A Show Cause Notice no. 76/2012 dated 20.06.2012 was issued by the Assistant Commissioner of Central Excise on the Appellant to show cause why demand on the aforesaid ground should not be confirmed and penalty should not be imposed under Rule 25, 27 of the Central Excise Rules, 2002 and Rule 15(1) of CENVAT Credit Rules, 2004 for non-compliance of Rule 8,12 of Central Excis....

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.... itself was incorrect in terms of Section 11A(2B) of Central Excise Act, 1944 as they have paid the tax and interest much before the issue of show cause notice; that Rule 8(3A) of Central Excise Rules, 2002 which has been relied upon by the original adjudicating authority as well as Commissioner (Appeals) has been struck down by the Gujarat High Court in the case of Indsur Global Ltd. Vs. Union of India and 2 others reported in 2014- TIOL-2115-HC-AHM-CX and Precision Fasteners and another versus Commissioner of Central Excise and two others reported in 2014-TIOL-2211-HC-AHM-CX; that since Rule 8(3A) of Central Excise Rules, 2002 has been struck down, imposition of penalty under Rule 15 is incorrect as they were eligible to utilize the CENVA....

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....arat High Court in the case of Commissioner of Central Excise & Customs vs. Saurashtra Cements Ltd. 2010 (260) ELT 71 has in a similar situation granted relief. The relevant extract is reproduced below: "In view of the above discussion and legal position emerging therefrom, we have no hesitation in confirming the orders passed by the Tribunal and dismissing all these Appeals filed by the Revenue, by holding that there was no intention on the part of the respondent assessee to evade any payment of duty. It is only because of stringent financial condition, that the duty could not be paid in time and as soon as liquidity was available, duty was paid along with interest. The Tribunal has, therefore, rightly come to the conclusion that ....

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....own the Rule 8(3A) as unconstitutional. The jurisdictional Hon'ble Madras High Court's ruling is binding on the jurisdictional adjudicating authority and also binding on this Tribunal. 9. We find that this Bench, in a batch of appeals in the case of Cheran Cements and others Vs. CCE, Trichy reported in 2015-TIOL-2119-CESTAT(MAD.) and by following the judgments of the Honble High Court of Gujarat in the case of Indsur Gobal India Vs. UOI - 2014-TIOL-2115-HC-AHM-CX, in the case of Precision Fasteners Ltd. Vs.CCE - 2014-TIOL-2211-HC-AHM-CX, in the case of Malladi Drugs & Pharmaceuticals Ltd. - 2015-TIOL-1262-HC-MAD-CX and in the case of A.R. Metallurgicals Pvt. Ltd. Vs. CCE, Chennai - 2011-TIOL-201-CESTAT-MAD and subsequently....