Customs, Excise and Gold Tribunal - Mumbai
Hemnil Metal Processors Pvt. Ltd. vs Commissioner Of C. Ex., Pune-I on 5 March, 2002
Equivalent citations: 2002(143)ELT679(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. The appellants/applicants was operating under the provisions of Rule 8 of the Central Excise (No. 2) Rules, 2001, which extend the facility of payment of duty on fortnightly basis. Under the scheme the accumulated duty for the first fortnight of the month has to be paid by the 20th of that month and the duty for the 2nd fortnight has to be paid by the 5th of the following month. The Rule has the following provision :-
"For removal of doubts, it is hereby clarified that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date."
2. Sub-rule (4) of the Rules prescribed punitive measures for the defaulters whose first failure is not redeemed within 30 days or those who cannot 3 successive failure the defaults result in forfeiture of this facility for 2 months.
3. The applicants here have been punished for 3 successive lapses. The table below provides the details.
Duty payable for fortnight Amount of Duty (Rs.) Duty to be paid on Remittance Dt. of Cheq Dr. to our A/c Cr. Rec. By Bom.
Date on TR 6 CH Ist FN/Oct 1224002/-
20-10-01 19-10-01 20-10-01
-
24-10-01 2nd FN/Oct 78317/-
5-11-01 3-11-01 6-11-01 9-11-01 Ist FN/Nov.
198063/-
20-11-01 15-11-01 7-11-01 17-11-01 21-11-01 2nd FN/Dec.
169022/-
5-01-02 3-1-02 4-1-02 5-1-02 8-1-02
4. The appellants pleaded that ordinarily the transfer of the amount out of their account should occur on 2nd day of the deposit of the cheque and that as soon as the cheque is cleared, the assessees' obligation should be deemed to be discharged. The applicants state that the receiving bank branch first debits the licensees account, then credits its own account, and sends the details to their Head Office which in turn would credit the Governments account. It is clear that the assessee has no control over this processes It is claimed that realizing this, the authority themselves have made following clarification.
"There is an 'Explanation' to Sub-rule (1) of Rule 8 that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date. It is being interpreted that it refers to deposit of duty amount by the focal point banks into the account of Government. This is not the intention. Once the assessee has deposited a cheque in bank and the same is honoured or pays in cash/drafts and the bank gives receipt stamp on TR-6 Challans, the same shall be treated as credited to the account of the Central Government."
5. We have seen the Rule and the clarification made by department.
The citation made of the Andhra Pradesh High Court judgment in the case Sanghi Polyesters Ltd. [2001 (134) E.L.T. 344] is not relevant.
6. We find that original authority having taken notice of the explanation above also, has not chosen to interpret it in the proper manner. The Commissioner (Appeals) has also not dwelt on the aspect, but has chosen to discuss the High Court judgment which was not relevant.
7. On reading the Ministry's explanation in the proper perspective we find a strong case has been made out by the assessee. We therefore grant stay of operation of the impugned orders. The Jurisdictional Central Excise Authority shall continue to permit the benefit of the rule to the assessee.