2002 (3) TMI 84 - AT - Central Excise

Summary

Issues involved:
Whether the facility to pay Central Excise duty on a fortnightly basis under Rule 8(1) of the Central Excise Rules, 2001 should be suspended for a period of 2 months.

Detailed Analysis:

1. Submission by Appellant's Advocate:
The Appellant, a manufacturer of television receivers, cleared goods on a fortnightly basis and faced an issue where the Central Excise Officers noted discrepancies in the value of goods cleared. The Appellant argued that they did not default in payment of any installment of duty and had paid duty on time through CENVAT account and PLA. They contended that the value for charging duty should be the transaction value as per Section 4 of the Central Excise Act, not the price in the purchase order. The Appellant also highlighted that Rule 8(3) is not a substitute for Section 11A for demanding non-levy or short levy.

2. Opposition by Department's Representative:
The Department argued that the correct duty amount was not paid by the Appellant as per Rule 8(1) due to discrepancies in the price indicated in the purchase order and invoice. They emphasized that any default in payment of the correct duty amount should lead to the consequences under Rule 8(4), resulting in the forfeiture of the facility to pay duty on a fortnightly basis.

3. Analysis of Rules and Decision:
The Tribunal analyzed the relevant provisions of the Central Excise Rules, emphasizing the requirement of paying duty as per Rule 8(1) and the consequences of default under Rule 8(4). The Tribunal noted that the correct payment of duty, not just the amount in the invoice, is crucial. While acknowledging the Department's stance, the Tribunal found the 2-month forfeiture of the facility too harsh. Referring to a previous case, the Tribunal decided to reduce the period of forfeiture to one month, considering the circumstances and the duty amount involved.

In conclusion, the Tribunal upheld the forfeiture of the facility to pay duty on a fortnightly basis but reduced the period of suspension from 2 months to 1 month based on the specific facts and circumstances of the case.