2015 (11) TMI 1615 - AT - Central Excise

Demand u/r 8(3A) of the Central Excise Rules, 2002 read with Section 11A of the Central Excise Act, 1944 - due payment of duty - Held that - I find that the embargo created in Rule 8(3A) ibid has the application, in the eventuality, where the assessee defaults in payment of duty within prescribed period and the same is discharged beyond the period of 30 days from the due date of payment. In the present case, since the duty liability for the month of September 2011 was deposited on 18.10.2011 with the designated bank and the interest for 13 days was also paid by the appellant subsequently, in my opinion, the situation is governed under sub-rule (3) and not under sub-rule (3A) of Rule 8 ibid. It is not in dispute that the bank account of the appellant has been credited with ₹ 7,21,000/- on 18.10.2011. Transferring the amount from the bank account to the Current Account at a later date due to ignorance on the part of the dealing assistant cannot be a defensible ground for confirmation of the demand under sub-rule (3A) ibid, especially in view of the fact that the appellant had paid the interest amount for delayed payment of duty - appeal allowed - decided in favor of appellant.

Summary

Issues: Application of Rule 8(3A) of the Central Excise Rules, 2002 to the case.

Analysis:
The appellant, engaged in manufacturing keys and pins, disclosed a duty liability in its ER-1 return for September 2011. The appellant paid a portion of the duty from the Cenvat account and the rest through the Current Account. An amount was deposited in the bank on 18.10.2011, but due to an error, it was not accounted for until 31.12.2011. The Department sought duty confirmation under Rule 8(3A) due to delayed payment and interest paid. The appellant argued that since duty was paid within 30 days of the due date, Rule 8(3A) did not apply. The Tribunal noted that the duty was paid on 18.10.2011 and interest was paid for the delay. The Tribunal found that the situation fell under sub-rule (3) and not sub-rule (3A) of Rule 8, as the duty was paid within the prescribed period. The delay in transferring the amount to the Current Account was not a valid reason for invoking sub-rule (3A), especially considering the interest payment made. The Tribunal set aside the impugned order, ruling in favor of the appellant.