2003 (1) TMI 392 - 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 on the same day.
3. Discrepancy in interpretation of RBI instructions and Trade Notice by lower authority leading to imposition of penalty.
4. Clarification from RBI regarding immediate delivery of receipted Challans accompanied by value received instruments.
5. Blame shifting for delayed realisation of Government accounts from appellants to State Bank of India.
6. Imposition of penalty without fault of appellants due to lack of mechanism to know when Bankers Cheque is realised.

Analysis:
1. The appellants, registered manufacturers of excisable goods, were alleged to have contravened Central Excise Rules by affecting clearances without sufficient balance in their personal ledger account. Show Cause Notices proposing penalties and interest were issued based on this observation.
2. The appellants contested the Notices, arguing that they followed RBI instructions and a Trade Notice by the Commissioner of Central Excise, Hyderabad, by depositing amounts via Bankers Cheque and taking credit in their PLA account on the same day, treating it as cash payment eligible for credit.
3. The lower authority did not consider the RBI instructions and Trade Notice, leading to the imposition of penalties. The Commissioner (Appeals) upheld the penalties, stating that credits in PLA should not have been taken until the amounts were realised in the Government account.
4. A clarification from the RBI confirmed that immediate delivery of receipted Challans accompanied by value received instruments was required. The delay in realisation of Government accounts was attributed to the State Bank of India, not the appellants.
5. The judgment highlighted that the appellants followed government instructions and should not be penalised for delays in realisation beyond their control. Blame for delayed realisation was shifted to the State Bank of India.
6. It was emphasized that the appellants could not be faulted for not waiting for Bankers Cheque realisation, as there was no mechanism for them to know when it occurred. The imposition of penalties without fault on the appellants was deemed unjust, leading to the setting aside of penalties and allowing the appeal with consequential relief.