High Court Judgement

CENTRAL EXCISE High Court Cases

Central Excise - effect of grant of an interim order by the Supreme Court - Short payment of duty - utilization of Cenvat credit for payment of differential duty and applicable interest - Revenue appeal seeking to deny benefit on utilization of Cenvat credit in terms of Rule 8(3A) of CER, 2002 – Revenue contends that decision of the High Court of Gujarat in the case of Indsur Global Ltd has been stayed by the Apex Court and hence the judgment is in jeopardy and cannot form the ratio decidendi – HELD - Merely because the Hon’ble Supreme Court granted stay of the order of the Gujarat High Court in the case of Indsur Global Ltd, it is not open to the Revenue to contend that the ratio of the Gujarat High Court ought not to be followed - mere grant of stay by the Supreme Court in an appeal would not per se require the High Court, in the matter pending before it, to draw inferences on merits - An interim order, which neither finally nor conclusively decides an issue, nor spells out reasons for the interim order, constitutes no precedent and affords no guidance to the lower court, on the further course of adjudication - It is also not in dispute that the judgment of the Gujarat High Court in Indsur Global’s case had been followed by the Delhi, Madras, Punjab & Haryana High Courts – further, the Tribunal has given cogent reasons for its finding that the assessee’s case is a case of demand under Section 11A and is not covered by Rule 8(3A) of Central Excise Rules, 2002 and the Revenue was not correct in denying utilization of Cenvat Credit to the assessee by applying the said sub-rule - the Tribunal rightly set aside the penalty and also the demand imposed on the assessee under Rule 8(3A) of CER, 2002 – the appeal id dismissed - The assessee had already paid as duty even before the audit declared amounts as payable. Rule 8(3A) applies to cases where the assessee had defaulted in payment of excise duty beyond 30 days from the due date - the Rule 8(3A) of CER. 2002 cannot apply to the instant case and as rightly held by the CESTAT, the said Rule does not apply to every case where in the department, during the scrutiny of returns, during audit or during investigation finds any additional amount payable as duty of excise. Such demands would be recoverable by issuing a notice under Section 11A of the Act and would not be covered under Rule 8(3A)

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