2008 (6) TMI 477 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 8 of Central Excise Rules, 2002 regarding duty payment.
2. Application of forfeiture facility under Rule 8(3A) of the Rules.
3. Consideration of appellant's contention dated 23-3-06 by the Adjudicating Authority.

Analysis:
1. The case involved the manufacture of P.P. Caps by the appellants under heading 8309 of the Central Excise Tariff Act, 1985. They received duty paid defective material in December 2005 and availed credit under Rule 16 of the Central Excise Rules, 2002. The appellants utilized the credit for duty payment by the 5th of the following month, as required by Rule 8. The Assistant Commissioner directed them to pay duty for each consignment by debiting the current account for two months. The Commissioner (Appeals) upheld this order.

2. The Advocate for the appellants argued that they paid duty within the stipulated period as per Rule 8(1) and had utilized the credit properly. The Adjudicating Authority did not consider their contention dated 23-3-06. On the other hand, the Revenue's representative contended that the appellants admitted default by letter dated 6-3-06, justifying the invocation of forfeiture under Rule 8(3A).

3. Upon review, it was found that the appellants paid the duty for December 2005 on time and utilized the credit appropriately. Even though they debited an alleged irregular amount voluntarily to avoid legal issues, the entire duty amount was paid within the prescribed period. The Tribunal concluded that the forfeiture facility under Rule 8(3A) could not be invoked in this scenario. The judgment set aside the impugned order, allowing the appeal with consequential relief.

In summary, the Tribunal's decision centered on the correct application of Rule 8 of the Central Excise Rules, 2002 regarding duty payment timelines and the utilization of credit. The judgment clarified the limits of invoking forfeiture under Rule 8(3A) and emphasized the importance of complying with duty payment regulations within the specified period.