2004 (9) TMI 155 - AT - Central Excise

Summary

Issues:
1. Delay in payment of duty leading to imposition of penalty under Rule 173Q of the Central Excise Rules, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI challenged an order by the Commissioner confirming the duty amount already paid and imposing a penalty under Rule 173Q of the Central Excise Rules, 1944. The penalty was imposed due to a perceived delay in payment of duty, as the amount paid by the assessee through cheques was credited to the Revenue's account on the next day after being credited to the assessee's account. The main issue revolved around whether this delay warranted the penalty imposed.

The appellant's consultant argued that there was no delay in payment of duty, citing judicial pronouncements and the Central Government's treatment of cheque presentation as the date of payment under certain rules. The consultant referred to various case laws supporting the proposition that presenting a cheque to the Government's bankers constituted payment of duty, especially when the cheque was not dishonored later. The consultant highlighted decisions such as Commissioner of Central Excise, Jaipur-I v. Genus Overseas Electronics Ltd. and Safeguard Surgicals v. Union of India & Anr. to support their argument.

On the other hand, the Senior Departmental Representative (SDR) sought to distinguish the case from the cited precedents, relying on the Bombay High Court's decision in Vidushi Wires Pvt. Ltd. v. Union of India, which held an assessee liable for defaulting on duty payment due to delayed credit to the exchequer after the due date.

After considering the submissions and case laws, the Tribunal analyzed the facts of the case. They found that the cheque payment made by the assessee was credited to the Government's account a day after being credited to the assessee's account. However, based on the legal principles established in various judgments, including Sahara Airlines Ltd. and Sanghi Polyesters Ltd., the Tribunal concluded that there was no actual delay in duty payment. They noted that the Central Government's rules deemed the payment made on the date of cheque presentation if not dishonored later. The Tribunal also distinguished the Bombay High Court's ruling by clarifying that the specific due date for payment mentioned in the rules was applicable to a different payment scheme not relevant to the case at hand.

Ultimately, the Tribunal ruled in favor of the appellant, vacating the penalty imposed by the Commissioner. They set aside the impugned order, allowing the appeal with consequential relief to the appellants.