2003 (1) TMI 320 - AT - Central Excise

Summary

Issues:
1. Alleged contravention of provisions of Central Excise Rules, 1944 regarding clearances without sufficient balance in personal ledger account.
2. Contesting Show Cause Notices based on depositing amounts via Bankers Cheque and taking credit in PLA account the same day.
3. Discrepancy between lower authority's interpretation and RBI instructions regarding credit in PLA account.
4. Imposition of penalty under Rules 9(2), 173Q(1)(a), and 173Q(1)(d) of the Act.
5. Clarification from RBI regarding immediate delivery of receipted Challans accompanied by value received instruments.
6. Blame allocation for delayed realisation of Government accounts and lack of fault on the part of the appellants.
7. Absence of contributory negligence justifying the imposition of penalty.

Analysis:
1. The appellants, registered manufacturers of excisable goods, were accused of contravening Central Excise Rules due to clearances without sufficient balance in their personal ledger account. Show Cause Notices were issued proposing penalties and interest under relevant rules.
2. The appellants contested the Notices, arguing that they followed RBI instructions and the Commissioner's Trade Notice by depositing amounts via Bankers Cheque and taking credit in their PLA account the same day, treating it as cash payment.
3. The lower authority disregarded RBI and Commissioner's instructions, insisting that credit in PLA should wait until the amount is realised in the Government account. The Commissioner (Appeals) upheld penalties due to the late realisation of amounts and misuse of credits in the PLA.
4. The penalty was imposed under specific sections of the Act based on the violation of maintaining sufficient balance in the PLA account and removal of goods without payment of duty.
5. A clarification from the RBI highlighted immediate delivery of receipted Challans accompanied by value received instruments, shifting blame for delayed realisation to the concerned bank branches rather than the appellants.
6. The judgment emphasized the lack of fault on the part of the appellants, as they followed official instructions and had no means to ascertain the realisation of Bankers Cheques. Contributory negligence was deemed absent, justifying the setting aside of the penalty.
7. Consequently, the penalty was revoked, and the appeal was allowed with consequential relief, considering the appellants' adherence to official instructions and the absence of any fault or contributory negligence on their part.