TaxTMI 
TaxTMI 
2025 (10) TMI 1191
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....amentally erred while interpreting Sub-Rule 1(d) of Rule 173G and 173G (1)(e) of the Central Excise Rules, 1944 in holding that an outstanding amount of duty is required to be paid with interest calculated not after reducing the balance out of CENVAT credit." 3. Brief facts of the case are that the appellant is engaged in the manufacture of Electric Water Heater and was discharging its duty liability after availing the benefit of Cenvat credit and in terms of facilities of fortnightly payment. 4. On scrutiny of monthly E.R.-I return for the month of May 2001, August 2001, September 2001 and October 2001, it was found that the appellant had short-paid the required amount of duty by the prescribed due date and subsequently, the duty was paid for the month of May, 2001 and August, 2001 along with interest and therefore, the appellant had made four defaults during the financial year 2001-2002 by violating the conditions of erstwhile Rule 173G(1)(a),(b) of the Central Excise Rules, 1944 [New Rule 8 of Central Excise (No. 2) Rules, 2001] which provides that if the appellant failed to pay the amount of duty payable by the due date, the appellant would be liable to pay the outstandin....
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....rmulated. 9. Learned advocate Mr. Kunal Nanavati for the appellant submitted that the appellant is entitled to calculate the interest on the basis of reducing balance after taking into consideration the balance of Cenvat Credit. 10. It was pointed out that both the authorities below and the Tribunal were not justified in interpreting the provisions of sub-rule 1(d) of Rule 173G of the Central Excise Rules by interpreting the word "actual payment" as the date of payment for calculation of the interest. It was submitted that the appellant was entitled to adjust the amount of Cenvat credit for payment of excise duty and therefore, the balance of Cenvat Credit is required to be taken into consideration for calculation of the interest, and it would amount to actual payment, once the credit is available under Cenvat Credit Ledger (PLA). 11. It was further submitted that interest to be paid under Sub-rule 1(d) of Rule 173G of the Central Excise Rules, 1944 would be of compensatory in nature and therefore, same ought to have been computed on the basis of reducing balance by taking into consideration balance of Cenvat credit. 12. Learned advocate Mr. Nanavati also referred to Ru....
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....tstanding amount for the period starting with the first day after due date till the actual payment of the outstanding amount." 4. In terms of the above rule, any outstanding amount of duty is required to be paid along with interest. The above provisions are unambiguous and there is no warrant to interpret them as if the duties required to be paid on the reducing balance of cenvat credit against outstanding excise duty. As such, I do not find any merits in the appeal. However, keeping in view the facts and circumstances, penalty of Rs.2 lakhs is reduced to Rs.50,000/-. But for the above modifications in the quantum of penalty, the appeal is otherwise rejected." 15. Sub-rule 1(d) of Rule 173G of the Central Excise Rules provides for levy of interest payable by the assessee if there is failure to pay the amount of duty payable by the due date by which the assessee would be liable to pay the outstanding amount along with interest at the rate of 24% per annum on the outstanding amount for the period starting with the first day after due date till actual payment of the outstanding amount. Therefore word "actual payment" is required to be considered as a date till which the in....
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.... ago in Maniruddin Bepari v. Chairman of the Municipal Commissioners, in which it was inter alia held: "It is a fundamental principle of law that a natural person has the capacity to do all lawful things unless his capacity has been curtailed by some rule of law. It is equally a fundamental principle that in the case of a statutory corporation it is just the other way. The corporation has no power to do anything unless those powers are conferred on it by the statute which creates it." (emphasis ours) 23. The principle of yesteryears, considered to be of immense substance and worth that a statutory authority, without statutorily conferred power, has no power to act in a particular manner, however, has to be read, in the present context, in light of what the Constitution of India ordains. Ever since the Constitution was enacted and with the march of administrative law, we feel that the age-old principle may not hold good in all circumstances. 24. An instructive passage is found in the decision of the Constitution Bench of this Court in Rai Sahib Ram Jawaya Kapur v. State of Punjab [AIR 1955 SC 549] on the extent of executive powers that the Constitution reserves for....
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.... suggest, that it is only when Parliament or the State Legislature has legislated on certain items appertaining to their respective lists, that the Union or the State executive, as the case may be, can proceed to function in respect to them. On the other hand, the language of Article 172 clearly indicates that the powers of the State executive do extend to matters upon which the State Legislature is competent to legislate and are not confined to matters over which legislation has been passed already. The same principle underlies Article 73 of the Constitution. These provisions of the Constitution therefore do not lend any support to Mr. Pathak's contention. 25. This proposition finds considerable support from another Constitution Bench decision of this Court in Lohia Machines Ltd. v. Union of India [(1985) 2 CC 197] wherein it was held that the legislature having exercised its essential function, a certain margin of latitude is always allowed to the executive in working out the details of exemption in a taxing statute. This Court referred to Pt. Banarsi Das Bhanot v. State of Madhya Pradesh [AIR 1958 SC 909], to emphasize the inherent power of the executive, where it ruled....