Custom, Excise & Service Tax Tribunal
M/S. A.R. Metallurgicals P. Ltd vs Commissioner Of Central Excise, ... on 21 October, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/563/2009
(Arising out of Order-in-Original No. 11/2009 dated 29.6.2009 passed by the Commissioner of Central Excise, Chennai)
For approval and signature:
Honble Ms. Jyoti Balasundaram, Vice President
Honble Dr. Chittaranjan Satapathy, Technical Member
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 the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. A.R. Metallurgicals P. Ltd. Appellants
Vs.
Commissioner of Central Excise, Chennai Respondent
Appearance Shri K. Balasubramanian, Advocate, for the Appellants Shri T.H. Rao, SDR for the Respondent CORAM Honble Ms. Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 21.10.2010 Date of Decision: 21.10.2010 Final Order No. ____________ Per Jyoti Balasundaram In this case the assessee failed to pay duty monthly within the due date in terms of Rule 8 of the Central Excise Rules, 2002. The facility of payment of duty through CENVAT credit account was forfeited / withdrawn with effect from 27.3.2006 and the payment on consignment basis was required to be made only through PLA. However, from 1.10.2006 to 31.1.2007, the assessee continued to avail CENVAT credit for payment of duty which was objected to by the Department. Show-cause notice raising demand of Rs.58,47,741/- representing CENVAT credit utilized by the assessee during the period above mentioned, together with interest and proposing imposition of penalty under Section 11AC of the Central Excise Act, 1944 and penalty under Rule 25 of the Central Excise Rules, 2002 was issued and adjudicated by the Commissioner who confirmed the demand together with interest and also imposed a penalty equal to duty under Section 11AC and a penalty of Rs.25 lakhs under the provisions of Rule 25 of the Central Excise Rules, 2002. Hence this appeal.
2. We find that with the amendment to Central Excise Rules, 2002 vide Notification No. 13/2006-CE dated 1.6.2006, a defaulting assessee is liable to pay excise duty for each consignment at the time of removal, without utilizing CENVAT credit until the date for payment of the outstanding amount including interest thereon. Since the assessee continued to utilize CENVAT credit instead of paying duty through PLA, the demand requires to be sustained. We order accordingly.
3. As regards penalty under Section 11AC, we set aside the same in the light of the Tribunals decision in Krishna Chemicals Vs. CCE, Ahmedabad 2009 (244) ELT 580 and Sai Packaging Industries Vs. CCE, Chennai 2010 (253) ELT 107. Penalty under Rule 25 is, however, retained but reduced to Rs.5,00,000/- (Rupees five lakhs only) in the light of the Tribunals order cited supra.
4. The appeal is thus partly allowed as above.
(Dictated and pronounced in open court)
(Dr. Chittaranjan Satapathy) (Jyoti Balasundaram)
Technical Member Vice President
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