The Commissioner vs. M/S. Andhra Cylinders PVT LTD
Held
The High Court held that the CESTAT's decision to allow the respondent's appeal was not arbitrary, illegal, or contrary to law. The Court noted that four High Courts (Gujarat, Punjab & Haryana, Madras, and Bombay) had already declared Rule 8(3A) of the Central Excise Rules, 2002, as ultra vires the Constitution and had struck down the provision. The Court also observed that despite Special Leave Petitions (SLPs) being preferred by the Department before the Supreme Court, no stay had been granted against these High Court judgments. Given that the provision of law itself had been declared unconstitutional by multiple High Courts, the Tribunal could not have sustained the Commissioner's order. Therefore, the High Court found no substantial question of law warranting interference with the impugned order of the CESTAT. The appeal was rejected.
Facts
The appeal was filed by the Commissioner of Customs, Central Excise and Service Tax against an order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The CESTAT had allowed the appeal of the respondent, M/s. Andhra Cylinders Pvt. Ltd. The dispute concerned the denial of utilization of Cenvat credit under Rule 8(3A) of the Central Excise Rules, 2002, for the period September 2009 to August 2010, due to default in monthly payment of duty. The original order was passed by the Commissioner, Customs and Central Excise, Hyderabad-I Commissionerate, on January 28, 2011. The CESTAT's order was dated January 3, 2020.
Key Issues
1. Whether Rule 8(3A) of the Central Excise Rules, 2002, is ultra vires the Constitution, as held by multiple High Courts. Petitioner's Contention: The appellant (Commissioner) did not explicitly present arguments against the CESTAT's decision. However, by filing the appeal, it is implied that the appellant contested the CESTAT's reliance on the judgments of other High Courts which declared Rule 8(3A) as ultra vires. Respondent's Contention: The respondent (M/s. Andhra Cylinders Pvt. Ltd.) relied on the judgments of the High Courts of Gujarat, Punjab & Haryana, Madras, and Bombay (in the case of Nashik Forge Private Limited), which had declared Rule 8(3A) of the Central Excise Rules, 2002, to be ultra vires and unconstitutional. The respondent argued that the CESTAT correctly followed these precedents.
Sections Cited
Rule 8(3A), Section 35H
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY ,THE TWELFTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY THREE PRES E NT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETry CENTRAL EXCISE APPEAL NO: 17 OF 202J ! Between: The Commissioner, Customs, Central Excise and Service Tax, ( Hyderabad- | Commissionerate, KendriyashulkBhavan, L.B. Stadium Road, Basheerbagh, Hyderabad- 500 004 (Presently the Commissioner of Central Tax, Central Excise and Service Tax, M€dchal GST Commissionerate, H.No 11-4-64918 Lakdikapul, Hyderabad -500 004) ...APPELLANT AND M/s. Andhra Cylinders Pvt. Ltd, Sy. No.203. Pati Village, Patancheru Mandal, Medak Dist Telangana State ...RESPONDENT Appeal under Sub Section (1)of Section 35 H of Central Excise Act, 1944 read with miscellaneous transitional provisions under Section 142 of CGST Act 2017 against the order of Customs Excise and Service Tax Appellate Tribunal, Regional Bench, Hyderabad daled 03-01-2O20 in Appeal No. 1108 I 2011 in Final Order No. A"/ 30001 - 2020 preferred against the order in Original No. 03 ott 2011- ( C.E) Commr. Dated 28- O1-2O'11 on the file of the Hyderabad - I Commissionerate
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