2004 (11) TMI 417 - AT - Central Excise

Summary

Issues:
Challenge to order-in-appeal reversing demand of interest on alleged delayed payment of duty.

Analysis:
In this appeal, the Revenue challenged the order-in-appeal where the Commissioner (Appeals) reversed the demand of interest on the alleged delayed payment of duty by the respondents. The Revenue contended that the duty should have been paid within two days excluding holidays from the date the Bill of Entry was returned for payment, failing which interest is applicable. However, the Tribunal found that the duty payment was made by Demand Draft within two days of the return of the Bill of Entries after assessment to the respondents. The Tribunal noted that Section 47(2) of the Customs Act mandates payment within two days, and the method of payment by Demand Draft was valid. The presentation of TR-6 challans at later dates did not affect the validity of payment as per the Act's provisions.

Furthermore, the Tribunal referred to a previous ruling by the Larger Bench in the case of CCE, Jaipur v. M/s. Genus Overseas Electronics Ltd., which held that payment of duty by cheque would be valid, with the payment date being the date the cheque was presented, if not dishonored. The Tribunal rejected the Revenue's argument that this ruling did not apply to Section 47(2) of the Customs Act, emphasizing that the Board's Circular on payment by cheque did not exclude payment by Demand Draft. The Tribunal cited legal precedents to support its interpretation and concluded that the Commissioner (Appeals) had rightly dropped the demand for interest against the respondents.

In conclusion, the Tribunal upheld the impugned order of the Commissioner (Appeals) and dismissed the appeal of the Revenue, finding no illegality in dropping the demand for interest on the alleged delayed payment of duty by the respondents.