2014 (6) TMI 60 - HC - Central Excise

Duty demand - What would be the position in law if the last date of deposit is a holiday and the amount is deposited on the next working day in which case, whether, the petitioner has committed any default or not - Held that - whenever a period is prescribed by a statute for the purpose of an act in a court or office and the period expires on a holiday, then according to Section 10 of the General Clauses Act, the act should be considered to have been done within the period prescribed if it is done on the next working day on which the court or office is open - petitioner deposited the amount on the next working day i.e. 5th November, 2005 and consequently did not commit any default in depositing the excise duty under Rule 8 of the Central Excise Rules, 2002. Consequently, we find that the impugned order cannot be sustained and is quashed - Decided in favour of assessee.

Summary

Issues:
1. Excise duty payment deadline and consequences of delay.

Analysis:
The petitioner challenged an order directing them to pay excise duty on each consignment for a two-month period due to a delay in payment. The petitioner, engaged in manufacturing soles and heels, failed to pay the duty by the deadline as per Rule 8 of the Central Excise Rules 2002. The rule mandates payment by the 5th day of the following month, with provisions for interest on delayed payments. Failure to pay within 30 days from the due date results in forfeiting installment facilities and requires payment on a consignment basis for two months from the order date.

In this case, the petitioner missed the deadline for September 2005, citing bank closures during festivals. Despite presenting a cheque to the Excise department on the next working day after the due date, the Assistant Commissioner ordered duty payment for two months due to the delay. The petitioner's claim of presenting the cheque on time due to bank holidays was uncontroverted, leading to a legal question on the computation of time when the last day falls on a holiday.

Referring to Section 10 of the General Clauses Act, the court held that if a prescribed period ends on a holiday, the act should be considered timely if done on the next working day. Citing precedent, the court emphasized the purpose of the provision to allow actions impossible on holidays to be completed on the following working day. Consequently, the petitioner's payment on the next working day was deemed timely, absolving them of default under Rule 8.

The judgment quashed the impugned order, ruling in favor of the petitioner. The court found the payment made on the subsequent working day as compliant with the statutory provisions, thereby annulling the duty payment directive for two months. The writ petition was allowed with no costs imposed, providing relief to the petitioner in the excise duty dispute.