2013 (8) TMI 349 - AT - Central Excise

Compounded levy - Determination of date of payment - Commissioner held date of payment will be the date when the cheque was presented - Held that - cheque presented by the appellant to the bank on or before last date of the month is treatable as the date of discharging duty for the second fortnight under the compounded levy scheme. It is observed that the penalty imposed by the adjudicating authority on the appellant is not is not sustainable as the cheque presented to the bank by the appellant was not dishonoured - Following decision of INDIA CEMENTS LTD. Versus COMMISSIONER OF C. EX., HYDERABAD 2002 (1) TMI 242 - CEGAT, BANGALORE - Decided against Revenue.

Summary

Issues involved:
1. Date of payment determination based on the date of cheque deposit or encashment.
2. Applicability of legal proposition regarding date of duty discharge under compounded levy scheme.
3. Validity of penalty imposition for delayed payment.

Analysis:

Issue 1: Date of payment determination
The primary issue in the case was whether the payment should be considered as deposited on the date of the cheque or on the day when it is encashed by the bank. The Tribunal referred to a previous case involving India Cements Ltd. vs. CCE and held that when a cheque is presented and encashed without being dishonored, the date of presentation of the cheque should be considered as the date of payment. This legal proposition was crucial in determining the date of duty discharge under the compounded levy scheme.

Issue 2: Applicability of legal proposition
The Tribunal emphasized that under the compounded levy scheme, a cheque presented to the bank on or before the last date of the month should be treated as the date of discharging duty for the second fortnight. The decision was based on the legal principle established in the case of India Cements Ltd. The Tribunal found that the penalty imposed on the appellant was not sustainable since the cheque was not dishonored, and therefore, the impugned order was set aside in favor of the appellant.

Issue 3: Validity of penalty imposition
The Commissioner (Appeals) relied on the Tribunal's decision in the case of India Cements Ltd. and noted that the Revenue did not provide any grounds for not following the decision. As the appellate authority had followed the legal precedent set by the higher appellate forum, there was no reason to interfere with the impugned order. Consequently, the Revenue's appeal was rejected, affirming the decision in favor of the appellant.

In conclusion, the judgment clarified the date of payment determination concerning cheque deposits, highlighted the legal proposition under the compounded levy scheme, and emphasized the importance of following established legal precedents in similar cases.