Custom, Excise & Service Tax Tribunal
Kakda Rolling Mills vs C.C.E., Bhopal on 8 November, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing: 19.10.2016 Date of pronouncement: 08/11/ 2016 Central Excise Appeal No.57049 of2013 Arising out of the order-in- original No.05/COMMR/CEX/BPL-I/2013 dated 30.1.2013 passed by the Commissioner , Central Excise , Bhopal. Kakda Rolling Mills .. Appellant Vs. C.C.E., Bhopal .. Respondent
Appearance:
Present Shri S.S. Dabas, Advocate for the appellant Present Shri G.R. Singh, A.R. for the respondent Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran , Technical Member Final Order No.54873/2016 Per B. Ravichandran:
The appellants are engaged in the manufacture of excisable goods and were availing cenvat credit on inputs and the capital goods and using the same to discharge duty on final products. It was noticed that during the period January 2010 to November 2010 the appellants were clearing excisable goods but have not discharged duty within time period prescribed as per Rule 8 (1) of Central Excise Rules, 2002. Accordingly, the provisions of Rule 8(3A) came into play which stipulate that during the default period of payments, the assessee shall pay excise duty for each consignment without utilizing cenvat credit till all the amounts are paid with interest. The appellants have utilized for cenvat credit payment of duty and also in certain cases did not pay duty consignment wise during the impugned period. Accordingly, proceedings were initiated to demand and recover an amount of Rs.1,49,17,065/- in cash along with interest. The amount of Rs.81,89,434/- already paid through Personal Ledger Account (PLA), in normal course, was sought to be appropriated against this demand. The original authority vide his order dated 29.1.2013 held that the amount liable to be paid in cash by the appellants worked out only to Rs.16,69,419/-. Out of this amount, an amount of Rs.11,23,262/- has been paid through cash already by the appellant. The same was ordered to be appropriated. Additional penalty equal to the duty demand was also imposed on the appellant under Rule 15 of the Cenvat Credit Rules, 2004.
2. In appeal it is pleaded that full duty liability has been discharged along with interest and there is no further amount of excise duty to be paid. It was contended that the payment through cenvat credit cannot be held as no payment of duty. Reliance was placed on decided cases in this regard.
3. We have heard both sides and perused the appeal records. The only point for decision is the liability of the appellant to pay duty only through cash because of default in payment of duty during certain months. The admitted facts of the case are that the appellants have not discharged the duty liability on monthly basis within stipulated time in terms of Rule 8(1). Hence Rule 8(3A) conditions apply for subsequent clearances. They were supposed to pay duty on each consignment and also without utilizing the cenvat credit. We find that similar matters came up for decision before the Tribunal in various cases. In Steel Tubes of India Ltd. vs. C.C.E., Indore 2016 (337) ELT 306 (Tri-Del.), it was held that the duty liability when fully discharged, payment of the amount again by cash only which will result in to re-credit of already debited credit is not necessary. The Tribunal referred to the decision of the Honble Madras High Court in the case of Malladi Drugs & pharmaceuticals Ltd. vs.UOI 2015 (323) ELT 489 (Mad.) and held that the assessee has right to use cenvat credit to discharge central excise duty even during defaul period. The Honble High Court observed that right to pay duty by utilizing cenvat credit cannot be denied unless it is a case of illegality or irregular credit. Reference can also be made to the decision of Honble High Court of Bombay in Lloyds Steel Industries Ltd. vs UOI 2005 (183) ELT 351 (Bom.) and also the decision of the Tribunal in Heavy Engineering Corporation Ltd. 1998 (230) ELT 179 (Tri-Calcutta) and M.M. Silk Mills vs. C.C.E., Surat I 2007 (211) ELT 78 (Tri-Mum.). It is to be noted that the provisions of Rule 8(3A) was held to be unconstitutional by various High Courts. The Honble Gujarat High Court in Indsur Global Ltd. vs. UOI 2014 (310) ELT 833 (Guj.) and Punjab & Haryana High Court in Sandley Industries vs. UOI 2015 (326) ELT 256 (P & H) in Writ Tax No.85/2011 order dated 4.8.2016. We note that the Honble Supreme Court in Jayaswal Neco Ltd. 2015 (322) ELT 587 (SC) held that the duty payment through cenvat credit during default period is acceptable mode of discharging duty.
4. In view of the above analysis and decided cases, we find no merit in the impugned order and the same is set aside and the appeal is allowed.
(Pronounced in open Court on 08/11/ 2016) (Justice Dr. Satish Chandra) President (B. Ravichandran) Technical Member scd/ Appeal No.E/57049/2013 3