Whether provisions of Rule 8(3A) are invokable in every case of default in short payment?

PJ/Case Law/2013-14/2076

Case:- ALOK ENTERPRISES V/S CCE , MUMBAI -III

Citation:- 2014-TIOL-208-CESTAT-MUM

Brief Facts:- The facts of the case are that as per the rule 8(3A) of Central Excise Rules, 2002, the assessee is required to pay duty within 30 days of the month in which the duty becomes due. The period involved in March 2007, for which the appellant should have paid the duty on or before 31.03.2007. The appellants have paid duty along with higher education cess but there was a difference of Rs.10/- while calculating the amount for payment which they already paid in the month of June 2007. Thereafter, a show-cause notice was issued under the provisions of section 11A of the Central Excise Act, 1944. As they have paid short payment, therefore they are not entitled to utilize cenvat credit for payment of duty during the period March 2007. Accordingly, impugned orders were passed.

Appellant’s Contention:- The appellant is in appeal along with an application for stay against the impugned order wherein a demand of Rs. 212345/- along with interest and equivalent amount of penalty has been confirmed against them for short payment of Rs. 10/- only which caused due to mis- calculation in the month of March, 2007 and which was paid by the appellant on his own in the month of June, 2007. Accordingly, the learned counsel for the appellant pleads that as the amount is very small, the stay application filed by them should be allowed.

Respondent’s Contention:-The AR contends that according to the Rule 8 of Central Excise Rules, 2002 the assessee is required to pay duty within 30 days of the month in which the duty becomes due. The period involved is March 2007, for which the appellant should have paid the duty on or before 31.03.2007. As they have paid short payment after March 2007, therefore they are not entitled to utilize cenvat credit for payment of duty during the period March, 2007.

Reasoning of Judgment:- Considering the fact that the entire amount of duty along with higher education cess has been already been paid by the appellant and there was a mis-calculation which resulted in short payment of Rs. 10/- only which was also paid by the appellants on their own. In these circumstances, the impugned proceedings were not warranted. Accordingly, impugned order is set aside and the appeal is allowed. Stay application is also disposed of in the above terms.

Decision:- Appeal Allowed.

Comment:- The substance of this case is that the provisions of Rule 8 (3A) are not invokable in each and every case of short payment of duty. In cases, where the duty has been paid on account of mis-calculation, with no malafide intention and moreover, the short payment is of very negligible amount, harsh provisions of Rule 8(3A) are not invokable.

Comments

PJ/Case Law/2013-14/2076

Post a Comment

Query