Order date – 22 March 2013

Parties – M/s Indus Tropics Ltd Vs C.C.E. & S.T.-Rajkot

Facts –

• The Appellate, M/s Indus Tropics Ltd, during the scrutiny of their ER-1 return for the month of October 2011 to July 2012, it was observed by the department that the appellant failed to pay full amount of central excise duty that was payable by them for the month of October 2011 to July 2012.
• A show cause notice dated 05.11.2012 was issued to the appellant to make full payment of duty within prescribed time limit as provided under Rule 8 of Central Excise Rules, 2002.
• The impugned order in original dated 05.07.2013 directed the Appellate to pay the Central Excise duty amounting to Rs. 1,39,76,931/- under Section 11A of the Central Excise Act, 1944 read with Rule 8(3A) of the Central Excise Rules, 2002 without utilizing CENVAT credit i.e., in cash along with the interest and penalty of Rs. 15,00,000/- under Rule 25 (1) of the Central Excise Rules, 2002.

Issue –

• Whether the Appellate should be held liable to pay the entire delayed amount along with penalty in cash without utilizing CENVAT credits, though the entire defaulted amount of central excise duty along with interest stands deposited with a delay of few weeks?

Order –

• The Tribunal considered the matter carefully and is of the view that the matter is no longer res-integra. The issue of paying the delayed excise duty fully in cash without utilizing CENVAT credit under Rule 8(3A) of Central Excise Rules, 2002  has been considered by the different High Courts in various decisions. 
• The Tribunal by relying on the order in the case of M/s. Andhra Cylinder P.Ltd. held that the demand is unsustainable and needs to be set aside. Consequently, penalties imposed upon the appellant also need to be set aside and we do so.
• The present appeal is allowed and the impugned order is set aside with consequential relief, if any.