Custom, Excise & Service Tax Tribunal
M/S Impact Metal Parts Pvt.Ltd vs Cce Vadodara-Ii on 19 December, 2014
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad Appeal No.E/12477/2014-SM; Stay Application No.E/Stay/14359/2014 [Arising out of: OIA No.VAD-EXCUS-002-APP-152-2014-15, dt.12.06.2014, passed by: Commissioner of Central Excise & Customs (Appeals), Vadodara] M/s Impact Metal Parts Pvt.Ltd Appellant Vs CCE Vadodara-II Respondent
Represented by:
For Assessee: Shri A.X.S. Jiwan, Consultant For Revenue: Shri Anil Gidwani, A.R. For approval and signature:
Mr. P.K. Das, Honble Member (Judicial)
1. Whether Press Reporters may be allowed to see the No 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 Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
MR. P.K. DAS, HONBLE MEMBER (JUDICIAL) Date of Hearing/Decision:19.12.14 Order No. A/12296 / 2014, dt.19.12.2014 Per: P.K. Das
1. After hearing both the sides at length, I find that the appeal may be decided at the stage of Stay Petition hearing. Accordingly, after disposing the Stay application, I take up the appeal for hearing.
2. After hearing both the sides and on perusal of the records, I find that the appellants are engaged in manufacturing of Aluminum bottles classifiable under Chapter 76 of First Schedule to the Central Excise Tariff Act, 1985. They were discharging Central Excise duty on monthly basis under Rule 8 of Central Excise Rules 2002. There was a delay in payment of duty of Rs.3,22,207.00 for the month of March, due on 31.03.2012. The appellant paid the entire duty along with interest on 02.05.2012. There was a short payment of interest of Rs.627.00, which was paid in February 2013. The adjudicating authority confirmed the demand of duty in respect of the amount paid through CENVAT account during the period from May 2012 to February 2013 and it was directed to pay by cash from PLA. The Commissioner (Appeals) directed the appellant to pre-deposit the entire amount of duty and penalty for hearing the appeal. The appeal was dismissed for non-compliance of stay order.
3. It is seen that the Hon'ble Gujarat High Court in the case of Indsur Global Ltd Vs Union of India 2014-TIOL-2115-HC-AHM-CX held that the condition contained in Rule 8(3A) of Central Excise Rules 2002 for payment of duty without utilizing CENVAT Credit is unconstitutional. The relevant portion of the said decision is reproduced below:
34. By no stretch of imagination, the restriction imposed under sub-rule (3A) of Rule 8 to the extend it requires a defaulter irrespective of its extent, nature and reason for the default to pay the excise duty without availing CENVAT Credit to his account can be stated to be a reasonable restriction. It leads to a situation so harsh and a position so unenviable that it would be virtually impossible for an assessee who is trapped in the whirlpool to get out of his financial difficulties. This is quite apart from being wholly reasonable. It prevents him from availing credit of duty already paid by him. It also is a serious affront to his right to carry on his trade or business guaranteed under Article 19(1)(g) of the Constitution. On both the counts, therefore, that portion of sub-rule (3A) of rule must fail.
35.....
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. Therefore, the portion without utilizing the CENVAT Credit of sub-rule (3A) of the Central Excise Rules 2002 shall be rendered invlid.
4. Ld.Advocate further submits that the case of Indsur Global Ltd (supra) was followed by the Honble Court in the case of Precision Fasteners Ltd Vs CCE 2014-TIOL-2111-High Court-AHM-CX,. In any case, I find that the appellant paid the amount through CENVAT account and there is a delay of payment of interest of Rs.627.00. So, the appellant has made out a strong prima facie case for waiver of pre-deposit of entire amount of duty along with interest and penalty. Accordingly, the pre-deposit of entire dues is waived.
5. As the Commissioner (Appeals) decided the case without going into the merits, it is appropriate that the matter should be remanded to the Commissioner (Appeals) to decide on merit.
6. In view of the above discussion, I set aside the impugned order and the matter is remanded to Commissioner (Appeals) to decide on merit without insisting any pre-deposit.
7. The appeal is allowed by way of remand. The Stay Petition is disposed of.
(Dictated & Pronounced in Court) (P.K. Das) Member (Judicial) cbb 4