2026-VIL-898-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Delayed Payment of Excise Duty - Department invoked Rule 8(3A) of the Central Excise Rules, 2002, which provided that manufacturers failing to pay duty within 30 days from the due date must pay excise duty on a consignment basis without utilizing Cenvat credit. The company had utilized Cenvat credit for subsequent months following the delayed payment - Whether the demand for recovery of duty and consequential penalty can be sustained when Rule 8(3A) of the Central Excise Rules, 2002 has been declared ultra vires – HELD - The issue is no longer res integra as the Gujarat High Court has already held that the provisions of Rule 8(3A) are ultra vires. Subsequently, the appeal filed by the Union of India against this judgment was dismissed by the Apex Court - When the provision itself has been declared ultra vires, the demand cannot sustain on the basis of that provision. The appellant has relied on various judicial precedents establishing that Cenvat credit utilization was equivalent to account current payment, making the transaction revenue neutral - The demand for recovery of duty is set aside along with the equal penalty under Section 11AC. However, liability of interest due to delayed payment of excise duty, if any, sustains – The appeal is partly allowed - Penalty for Late Filing of Returns - Whether the levy of penalty for late filing of excise returns under Rule 27 is justified – HELD - The appellant delayed the filing of the two returns. The Rule 27 of the Central Excise Rules, 2002 provides that breach of Rules shall be punishable with a penalty which may extend to five thousand rupees. The adjudicating authority has rightly imposed the penalty for the breach of the filing obligation, as the returns were filed beyond their due dates - The penalty imposed by the adjudicating authority under Rule 27 for late filing of returns is upheld - Personal Penalty on Authorized Signatory for Misstatement in Returns - Whether a personal penalty can be imposed on an authorized signatory acting in his capacity as an employee of the company for deliberate misstatement and suppression of information in monthly returns – HELD - The authorized signatory was fully aware that the amount had not been paid on the date claimed in the return. His own statement clearly establishes that he intentionally misdeclared the payment particulars and that the misstatement was made purposefully to mislead the department about the payment of duty, with the intention to continue utilizing the Cenvat account and evade the requirement of paying duty on a consignment basis during the default period. This constitutes a deliberate act of misrepresentation and suppression with knowledge and intent, which distinguishes this case from situations where an employee acts merely in an official capacity without personal culpability. The adjudicating authority was justified in imposing the penalty under Rule 26.
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