If any default is made in payment of duty beyond thirty days from due date, duty for each consignment is to be paid by debit in account current or same could be paid by utilizing CENVAT?

PJ/Case Law/2014-15/2170

Case:-MAULI STEEL PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, AURANGABAD

Citation:-2014-TIOL-689-CESTAT-MUM

Brief facts:-As per Rule 8(3A) of CER, 2002 if there is any default in payment of duty beyond thirty days from due date, duty for each consignment is to be paid by debit in account current but appellant paid the same by utilizing CENVAT. Vide stay order No. S/1182/13/EB/C-II dated 11/11/2013 the appellant was directed to make a pre-deposit of Rs.2.22 crore through PLA within a period of eight weeks and report compliance on 15/01/2014.

Appellant’s contentions:-The appellant filed a modification application vide application dated 09/01/2014 on the ground that when a similar matter had come up before the Principal Bench at Delhi, vide order reported in= (2014-TIOL-138-CESTAT-DEL)in the case of Bakewel Agro Ltd. vs. Commissioner of Central Excise & Service Tax, Meerut -I, there was a difference of opinion between two Members which was referred to Third member and therefore, in view of the difference of opinion, the stay order passed by this Bench should be recalled and the matter kept pending till the difference of opinion was sorted out.

Respondent’s contentions:-The learned Commissioner (AR) appearing for the Revenue, on the other hand, submitted that the Tribunal had passed a final order in Appeal No. E/1900/2012 & E/85573/2013 vide order NO. A/18-19/14/EB/C-II dated 23/01/2014 in Sharp Industries Ltd. = (2014-TIOL-344-CESTAT-MUM)case in an identical matter in favour of the Revenue and against the appellant. Therefore, the modification application now filed by the appellant was devoid of merits.

Reasons of judgment:-The Tribunal held that their stay order dated 11/11/2013 was based on the decision of the hon'ble High Court of Karnataka in the case of Manjunatha Industries vs. Commissioner of Central Excise, Bangalore = (2013-TIOL-285-HC-KAR).The difference of opinion pending before the Principal Bench of CESTAT, Delhi was not an order at all and it had no binding value. Further, this Tribunal had decided the mater finally in Sharp Industries Ltd., case vide order dated 23/01/2014. Therefore, they found no merit in the modification application filed by the appellant and accordingly, they dismissed the same. They also directed the appellant to comply with the stay order passed and make the pre-deposit of Rs.2.22 crore forthwith and report compliance on 24th February, 2014, failing which the appeal would be liable to be dismissed without any further notice.

Decision:- The application was dismissed.

Comment:- The analogy drawn from the case is that Rule 8(3A) specifically prohibits utilization of cenvat credit during the period in which default continues, even when the said amount is required to be paid as arrears of revenue the same have to be paid in cash without utilization of the cenvat credit. Any other interpretation will make the restriction relating to utilization of credit meaningless. It is settled law that what is not allowed directly cannot be allowed/ claimed indirectly.

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PJ/Case Law/2014-15/2170

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