Tax Update – Vol.5, Issue 2, July 2015

CENTRAL EXCISE

Caselaws

Violation of rule 8(3A) of CER, 2002; confiscation & penalty upheld

The Taxpayer defaulted in monthly payment of duty, which was not rectified within 30 days. Department issued SCN alleging that as per Rule 8(3A) of the CER, Taxpayer, post the above default, ought to have paid duties for each consignment. The SCN demanded duty along with interest and penalty under Rule 25 of CER read with Section 11AC of CEA.

The CESTAT upholding the demand observed that the Gujarat HC in the case of Indsur Global Limited vs Union of India; 2014-TIOL-2115-HC-CX has only declared the requirement of payment duty without utilizing the CENVAT credit as provided in Rule 8(3A) as unconstitutional. Accordingly, all other provisions of rule 8(3A) are legitimate. On this ground, the CESTAT held that in the present case, after committing the default in payment of duty, the Taxpayer ought to have paid excise duty for each consignment at the time of removal till