2008 (12) TMI 478 - AT - Central Excise

Summary

Issues:
Appeal against Commissioner (Appeals) order regarding duty payment and interest calculation.

Analysis:
The appeal was filed by the department challenging the Commissioner (Appeals) order that the respondents did not owe duty after 5th August, 2004 until 23rd November, 2004, and thus, were not liable to pay interest for that period. The Tribunal noted that the respondents had indeed deposited a cheque for the duty amount on 5th August, 2004. The bank's endorsement on the challan indicated the cheque was "too late for today's account." According to Explanation (b) of Rule 8 of the Central Excise Rules, 2002, when duty is paid by cheque, the date of presentation of the cheque in the designated bank is considered the date of payment, subject to realization. Therefore, the duty was remitted on time as required. The Revenue alleged that the respondents did not debit the duty amount until 23rd November, 2004, citing an overwritten entry. However, it was found that the respondents had sufficient credit in their accounts on 5th August, 2004, as the cheque deposited on the same day was enough to cover the duty liability. As per the rules, the date of cheque deposit is considered the payment date, making the Revenue's claim baseless. There was no evidence that the accounts had insufficient balance to cover duty liabilities between August and December 2004. Once the amount is credited in the account, it is available to the Government. Therefore, the demand for interest for the period in question was deemed unjustified, leading to the dismissal of the appeal.

The Tribunal's decision was based on the clear interpretation of the Central Excise Rules and the factual evidence presented. It emphasized that the date of cheque presentation for duty payment is crucial, and once the amount is deposited, it is deemed available to the Government. The Tribunal found that the Revenue's allegation of delayed debit was unfounded, as the cheque deposit date sufficed to cover the duty liability. The judgment highlighted the importance of adherence to procedural rules and the significance of timely payment in excise matters. The Tribunal's detailed analysis of the events leading to the appeal dismissal showcased a meticulous approach to resolving disputes related to duty payment and interest calculations.