2009 (4) TMI 648 - AT - Central Excise

Summary

Issues: Disallowance of payment of duties in instalments under Rule 8(1) of the Central Excise Rules, 1944 due to delayed payments by the assessee.

In this case, the adjudicating authority disallowed the facility of payment of duties in instalments under Rule 8(1) of the Central Excise Rules, 1944, as the assessee had delayed payment on three occasions in the financial year 2000-01. The duty amounts of Rs. 79,000/-, Rs. 1,17,500/-, and Rs. 36,000/- were payable for different fortnights, and the payments were made after the specified due dates. The Commissioner (Appeals) accepted the assessees' argument that one of the delayed payments was due to the last date falling on a Sunday, and the payment was made on the next working day, Monday. The Revenue appealed this decision.

Upon hearing both sides, the Tribunal referred to a judgment by the Hon'ble Bombay High Court in Indian Seamless Steel and Alloys Ltd. v. Union of India, which held that if the due date falls on a non-working day and the payment is made on the next working day, it does not constitute a default in payment. The Tribunal upheld this interpretation and accepted the assessees' argument that the delayed payments did not amount to defaults on more than two occasions, thereby justifying the continuation of the facility to pay duty on a fortnightly basis. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal.

Therefore, the Tribunal's judgment clarifies the interpretation of delayed payments in the context of duty payment under Rule 8(1) of the Central Excise Rules, 1944, based on the precedent set by the Bombay High Court. The decision emphasizes the importance of considering working days when determining the timeliness of duty payments to avoid unjust penalties for the assessees.