Custom, Excise & Service Tax Tribunal
M/S Rana Papers Limited vs Cce, Meerut-I on 21 August, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
R.K. PURAM, W.B. NO. 2, PRINCIPAL BENCH
NEW DELHI, COURT NO.I
Excise Appeal No. 145 of 2007-SM
[Arising out of Order-in-Appeal No. 205-CE/MRT-I/2006 dated 09.10.2006 passed by the Commissioner (Appeals) Central Excise, Meerut]
Date of Hearing/ decision: 21.08.2008
For approval and signature:
Hon'ble Mr. Justice S.N. Jha, President
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982.
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s Rana Papers Limited Appellant
Vs.
CCE, Meerut-I Respondent
Appearance:
Mr. Alok Arora, Advocate for the Appellant
Mr. C.S. Rajput, Departmental Representative for the Respondent.
CORAM: Mr. Justice S.N. Jha, President
O R D E R
Per S.N. Jha:
This appeal by the assessee is directed against the order of the Commissioner (Appeals) dismissing the appellants appeal which was directed against the order of the Assistant Commissioner by which the order of the Deputy Commissioner directing the appellant to pay duty from account current only on consignment basis for the period from 19.12.2001 to 18.02.2002 was upheld.
2. The appellants were paying central excise duty on fortnightly basis in terms of rule 8 of the Central Excise Rules. Sub-rule (4) thereof (as it is stood prior to 01.04.2005) laid down-
4) If the assessee defaults,-
(i) in payment of any one instalment and the same is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, or
(ii) in payment of instalment by the due date in a financial year, whether in succession or otherwise, then, the assessee shall forefeit the facility to pay the dues in instalments under this rule for a period of two months, starting from the date of communication of the order passed by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in this regard or till such date on which all dues are paid, whichever is later, and during this period the asessee shall be required to pay excise duty for each consignment by debit from the account current 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.
As circumstances would have it, the appellant made defaults in payment of instalments during parts of the period between first fortnight of June 2001 and second fortnight of October 2001. They discharged the duty liability for the period, with interest, on different dates in the manner mentioned in para 2.1 of the grounds of appeal. So far there is no dispute. The dispute arose from the fact that the appellant paid the duty from the cenvat account and not from the current account. The case of the appellant is that in terms of sub-rule (4) of Rule 8, as it stood prior to amendment under notification dated 31.3.2005 they had option to pay the duty either from PLA or from cenvat account. By the said notification the words notwithstanding anything contained in sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004 were inserted after the words and during this period and before the words the assessee shall be required to pay. After the amendment, it is submitted, Rule 3(4) of the Cenvat Credit Rules having been excluded, the assessee has no option but to pay excise duty for each consignment by debiting from the current account. The amendment being prospective, in force from 1.4.2005, the case of the appellant would be governed by the erstwhile provision. In support of their case, the appellant rely on the Larger Bench decision in Noble Drugs Limited vs. CCE, Nasik -2007 (215) ELT 500 (Tri. L.B.). Reliance is also placed on a decision of the Bombay High Court in Lloyds Steel Industries Limited vs. Union of India -2005 (183) ELT 351 (Bom.).
3. On behalf of the Revenue, learned DR placed reliance on Aeons Const. Products Limited vs. CCE, Chennai 2005 (179) ELT 449 (Tri. Chennai) and SU-VI Pharmaceuticals & Chem. Ltd., vs. CCE, Pune-III -2008 (223) ELT 86 (Tri.- Mumbai). The said decisions do hold that on forefeiture of the instalment facility, in case of default, the assessee is required to pay excise duty from the current account and he cannot utilize the cenvat credit under Cenvat Credit Rules for the same. However, the decisions are by Single Member Benches and in view of the decision of the Larger Bench in Noble Drugs Limited (supra) cannot be said to have correctly laid down the law. The Larger Bench in fact decided the issue in the light of a decision of the Kerala High Court. The Bombay High Court has taken the same view in Lloyds Steel Industries Limited (supra).
4. In view of the above, payment of excise duty from cenvat credit account cannot said to be illegal and no further liability can be fastened on the appellant for default in payment of instalments under rule 8 of the Central Excise Rules.
5. In the result, the impugned orders of the Assistant Commissioner, Commissioner (Appeals) as well as the order of the Deputy Commissioner dated 18.12.2001 are set-aside. The appeal is allowed accordingly.
[Dictated and pronounced in the open Court on 21.08.2008] (Justice S.N. Jha) President [Pant]