2003 (1) TMI 324 - Commissioner - Central Excise

Payment of duty on fortnightly basis - Withdrawal of facility due to default in payment - Delayed orders

Summary

Issues:
- Forfeiture of facility of deferred payment of duty for specific periods.
- Violation of principles of natural justice.
- Applicability of Rule 8(4) of Central Excise Rules, 2002.
- Scope of forfeiture period under Rule 8(4).
- Continuous forfeiture of facility.
- Self-assessment procedure and implications.
- Compliance with Board instructions on payment of duty.
- Timeliness of forfeiture orders.
- Adherence to Board instructions.
- Judicial precedents on procedural compliance and economic impact.

Forfeiture of Facility of Deferred Payment:
Three appeals were filed against orders for forfeiture of deferred payment of duty for specific periods due to belated or non-payment of duty instalments. The appellant, a manufacturer of iron and steel products, failed to pay duty instalments on time, leading to the forfeiture orders by the Joint Commissioner of Central Excise.

Violation of Principles of Natural Justice:
The appellant contended that the orders were contrary to law and violated principles of natural justice by not providing an opportunity of hearing before forfeiture. Citing a decision, the appellant argued that the facility should only be forfeited after a hearing, which was not granted in this case.

Applicability of Rule 8(4) and Scope of Forfeiture Period:
Issues were raised regarding the application of Rule 8(4) of Central Excise Rules, 2002, concerning the forfeiture of the facility. The appellant argued that the forfeiture period should be limited to the financial year and not extend beyond it, as per the rule's provisions.

Continuous Forfeiture and Self-Assessment Procedure:
Concerns were raised about the continuous nature of the forfeiture and the appellant's compliance with the self-assessment procedure. The appellant argued that the forfeiture should not run continuously and that the facility withdrawal was unjustified given the payments made.

Compliance with Board Instructions and Timeliness of Orders:
The case highlighted the importance of complying with Board instructions on payment of duty and the timeliness of forfeiture orders. The appellant's defaults and the delay in issuing forfeiture orders were scrutinized in light of these instructions.

Adherence to Board Instructions and Judicial Precedents:
The judgment emphasized the need to adhere to Board instructions and cited judicial precedents to support the decision. The court considered the economic impact of delayed tax realization and the necessity for timely resolution of tax matters.

Conclusion:
The appeals were allowed with modifications to ensure the orders were in force from the date of communication and not continuously. The department was granted the authority to order forfeiture until all dues were paid, aligning with Rule 8(4) of Central Excise Rules, 2002. The judgment aimed to balance procedural fairness, compliance with rules, and timely tax collection for the benefit of all parties involved.