TaxTMI 
TaxTMI 
2026 (2) TMI 776
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.... PLA, was delayed by more than 30 days from the due date. The department alleged that during the default period, the party did not pay duty on consignment basis, in cash and therefore, they have violated the provisions of Rule 8 (3A) of the Central Excise Rules, 2002 which was amended Vide Notification No. 30/2006-CE (N.T) dated 01.06.2006. The said Rules provides as under:- "If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub rule (1), then notwithstanding anything contained in said sub-rule (1) and sub rule (4) of Rule 3 of Cenvat Credit Rules, 2004, the assessee shall, pay excise duty for each consignment at the time of removed, without utilizing the Cenvat Credit till the date the assessee pays the outstanding amount including interest thereon, and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow" 1.1. The goods cleared by the party during default period in contravention of the provisions of Rule 8(3A) are presumed to be cleared without payment of duty and consequences as per Rule 25 of....
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.... relied upon by the Learned Adjudicating authority in the impugned order do not support the case of the department. Rule 8(3A) applies only where full amount was not paid within the permissible time whereas in their case, only a small amount was left to be paid and major amount was already paid through PLA. * Penalty should have been proportionate to the default amount whereas a very high penalty has been imposed against them by the learned adjudicating authority. Penalty under Rule 25 of the Central Excise Rules cannot be imposed against them as ingredients of Rule 25 (1) (a) are not present in their case: In fact, Rule 8 of the Central Excise Rules, 2002 which seeks to withdraw certain facilities, itself amount to penalty. * Interest cannot be demanded under Section 11AB of the Central Excise Act, 1944 as this Section is attracted where there is nonpayment or short payment or erroneously refunded Central Excise Duty. In their case, full amount of duty has been paid either using Cenvat Credit or in cash. Therefore, this provision is not attracted. In view of the above, they prayed to set aside the order and allow their appeal. 3. The department in it's resp....
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.... * CCE Vs. Nashik Forge Pvt. Ltd. 2019 (368) E.L.T. 20 (Bom.) * CCE Vs. Twenty First Century Wires Rods Ltd. 2019 (26) GSTL 478 (Bom) * Gujarat Colours and Coatings (P) Ltd. Vs. CCE, Thane-I 2022 (3) TMI 504 * Supermax Personal Care Pvt. Ltd. Vs. Commissioner of CE & ST, LTU, Mumbai 2022 (7) TMI 920 * Munis Forge Ltd. Vs. CCE, Nagpur MANU/CM/0035/2021 * Utkal Alloys Pvt. Ltd. Vs. CCE & ST., Bhubaneswar-II 2021 (4) TMI 625 * Vrajeshwari Steel Pvt. Ltd. Vs. CC- 2017 (346) E.L.T. 490 (Tri. Ahmd.) * Neesa Infrastructure Ltd. Vs. CCE-2015 (10) TMI * Impact Metal Parts Pvt. Ltd. Vs. CCE - AHMEDABAD MANU/CS/0299/2014 * Commissioner Vs. DRD Body Techs India Private Limited-2022 (379) E.L.T. 106 (Telangana) * DRD Body Techs India Private Limited Vs. Commissioner of Cus., C. E. & S.T. 2020 (374) E.L.T. 270 (Tri. - Hyd.) * Principal Commissioner of C. Ex. Vs. Space Telelinks Ltd. 2017 (355) ELT 189 (Del) * CCE Vs. Mysore Concrete Products, 2022 (380) ELT 242 (SC) 5. Learned AR agrees that after the decision of Hon'ble Supreme Court Lok Adalat in department's appeal against th....
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....b-rule (3A), liability to pay interest for the default period as per sub-rule (3) of Rule 8 continues. Sub-rule (3A) is basically a mechanism for stringent recovery and does not create a new liability unless this mechanism itself is breached. In such a mechanism to provide for withdrawal of CENVAT credit facility for paying the duty borders to creating a penalty. Insisting on an assessee in default to clear all consignments on payment of duty would be a perfectly legitimate measure. However, to insist that he must pay such duty without utilising CENVAT credit which is nothing but the duty on various inputs already paid by him would be a restriction so harsh and out of proportion to the aim sought to be achieved, the same must be held to be wholly arbitrary and unreasonable. We may recall, the delegated legislature in its wisdom now dismantled this entire mechanism and instead has provided for penalty at the rate of 1% per month on delayed payment of duty. 36. In the result, the condition contained in sub-rule (3A) of Rule 8 for payment of duty without utilizing the Cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. T....
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....K.Palanisamy v. N Arumugham while disposing SLP (Civil) No. 2308 of2009 Hon'ble Supreme Court in para 13 held that- " It is a well settled principle of law that mentioning of a wrong provision or non-mentioning of a provision does not invalidate an order if the court and/or statutory authority had the requisite jurisdiction therefor," (c) In Ram Sunder Ram v. Union of India while disposing Appeal (civil) 2951 of 2007, Hon'ble Supreme Court held in para 20 that; It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise (2004) 12 SCC 278). Thus, quoting of wrong provision of Section 20 in the order of discharge of the appellant by the competent authority does not take away the jurisdiction of the authority under Section 22 of the Army Act." (d) Hon'ble Supreme Court expressed similar view in MERINO PANEL PRODUCTS LTD-2023 (383) ELT 129 (SC) (2022) 1 Centax 59 (SC). Para 16 is reproduced below: "16. It is clear that the latter quest....