Custom, Excise & Service Tax Tribunal
M/S. B.B.F. Home Care Products Ltd vs C.C.E., Ludhiana on 23 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 SINGLE MEMBER BENCH COURT NO. I APPEAL NO. E/55925/2013 [Arising out of Order-in-Appeal No. 311/CE/APPL/LDH/2012 dated 18.01.2013 passed by the Commissioner of Central Excise (Appeals), Chandigarh-I] Date of hearing/decision: 23.01.2018 For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) M/s. B.B.F. Home Care Products Ltd. : Appellant(s) VS C.C.E., Ludhiana : Respondent(s)
Appearance:
Present for the Appellant(s): Sh. Kamaljeet Singh, Advocate Present for the Respondent(s): Sh. A. K. Saini, A.R CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO. 60077 / 2018 Per : Ashok Jindal The appellant is in appeal against the impugned order wherein the duty has been demand by invoking provisions of Rule 8(3A) of Central Excise Rules, 2002.
2. Brief facts of the case are that during the month of March, 2009 the appellant has cleared the goods involving excise duty of Rs. 6,60,682/- and has paid central excise duty of Rs. 3,30,338/- from Cenvat account and Rs. 36,962/- from PLA. Thus they had defaulted in payment of balance amount of Rs. 2,93,382/- which was subsequently paid by them on 05.05.2009 alongwith interest resulting in delay of 34 days. During May, 2009 the appellant had cleared goods involving central excise duty of Rs. 4,69,856/- and paid duty of Rs. 3,42,654/- from Cenvat account and Rs. 30,906/- from PLA and thus defaulted in payment of balance amount of Rs. 96,296/- which was subsequently paid by them on 21.07.2009 alongwith interest of Rs. 1700/- resulting in delay of 45 days. In terms of Rule 8(3A) of Central Excise Rules, 2002 (hereinafter referred to as CER,02) the defaulted amount should have been paid in thirty days alongwith interest. However, as explained above the appellant paid these amounts after more than 30 days in each case. Since the default in payment of duty continued beyond a period of 30 days, appellant was required to pay duty on each consignment at the time of removal without utilizing Cenvat credit from the date of default till the date the appellant paid the outstanding amount alongwith interest thereon in terms of provisions of Rule 8(3A) of CER, 02. The appellant continued to clear goods in the period of default by debiting Cenvat account. Thus it appeared the goods valued at Rs. 37,32,165/- involving central excise duty of Rs. 3,07,530/- cleared w.e.f. 05.07.09 to 20.07.09 and goods valued at Rs. 7,43,731/- involving central excise duty of Rs. 61,283/- cleared during the period 01.05.2009 to 04.05.2009 were deemed to have been cleared without payment of duty in terms of Rule 8(3A) of CER, 02. As such these amount of Central excise duty were recoverable from them under Section 11(A)(1) of Central Excise Act, 1944 (hereinafter referred to as CE Act, 1944) read with Rule 8(3A) of CER, 02 read with Section 11AC of CE Act 1944 and goods cleared without payment of duty were proposed to be confiscated. As such two show cause notices proposing above actions were issued vide V(87)21/Ldh-II/87/09/1797 dated 23.03.2010 and V (87) 21/D/Ldh-II/87/09/2038 dated 15004.2010.
3. The matter was adjudicated and demands were confirmed against the appellant. Against the said order the appellant is before me.
4. Heard the parties and considered the submissions.
6. I find that the issue before me is that whether the provisions of Rule 8(3A) of the Central Excise Rules 2002, are invocable in the facts of the case or not?
7. The said issue has been decided by the Honble High court of Gujarat in the case of Indsur Global Ltd. Reported in 2014 (310)ELT 833 (Gujarat) wherein it has been held that the provisions of Rule 8(3A) of the Central Excise Rules, are ultra virus. Although the said decision has been challenged by the Revenue before the Honble Apex court and the Honble Apex court has granted the stay of operation of the order of the Honble High court of Gujarat in the case of Indsur Global Ltd. (supra) the Honble High Court of Delhi in the case of M/s Space Telelink Ltd. In Appeal No. C.E.A.C No. C.No.5/2016 vide order dated 08.03.2017 in the case of M/s space Telelink Ltd., Wherein it has observed as under.
7. The revenue has argued that the Supreme Court has entertained a special Leave Petition against the judgment of the Gujarat and Madras High Courts and furthermore, granted a stay of proceedings and that in these circumstances, the law declared in those judgments are no longer applicable. This submission is fallacious because in Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association (1992) 3 SCC, the Supreme Court had observed as follows:
while considering the effect of an interim order staying the operation of the order under challenge a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of passing of the stay order and it does not mean that the said order has been wiped out from existence. This means that if an order passed by the appellate authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the appellate authority would be restored and it can be said to be pending before the appellate authority after the quashing of the order of the appellate authority. The same cannot be said with regard to an order staying the operation of the order of the appellate authority because in spite of the said order, the order of the appellate authority continues to exist in law and so long as it exists, it cannot be said that the appeal which has been disposed of by the said order has not been disposed of and is still pending. We are, therefore, of the opinion that the passing of the interim order dated February 21, 1991 by the Delhi High Court staying the operation of the order of the appellate authority dated January 7, 1991 does not have the effect of reviving the appeal which had been dismissed by the appellate authority by its order dated January 7, 1991 and it cannot be said that after February 21, 1991 the said appeal stood revived and was pending before the appellate authority.
8. It is apparent therefore, that an order keeping in abeyance the judgment of a lower court or authority does not deface the underlying basis of the judgment itself, i.e. its reasoning.
9. In view of the above discussion, this court holds that the impugned order and reasoning of the CESTAT does not call for interference and the court is not persuaded to take a view different from those taken by the Gujarat, Allahabad, Punjab and Haryana and Madras High Courts, respectively. The appeals are consequently dismissed.
8. In view of the decision of the Honble High court of Delhi in the case of M/s Space Telelink (supra), I hold that the demand is under Rule 8(3A) of Central Excise Rules, 2002 is not sustainable against the appellant, therefore, the impugned order is set aside.
9. The appeal is allowed with consequential relief if any.
(Dictated and pronounced in the court) Ashok Jindal Member (Judicial) kailash 4 APPEAL NO. E/55925/2013