2002 (12) TMI 597 - HC - Central Excise

Summary

Issues Involved:
1. Compliance with Rule 8(1) of the Central Excise Rules, 2001.
2. Establishment of three defaults u/r 8(4)(ii) of the Central Excise Rules, 2001.

Summary:

1. Compliance with Rule 8(1) of the Central Excise Rules, 2001:
The petitioners, a Public Limited Company engaged in manufacturing steel and alloys, were enjoying the facility of paying excise duty on a fortnightly basis u/r 8(1) of the Central Excise Rules, 2001. The Deputy Commissioner of Central Excise, Pune VII Division, forfeited this facility by an order dated 28th August 2002, alleging breach of the rules by the petitioners.

2. Establishment of three defaults u/r 8(4)(ii) of the Central Excise Rules, 2001:
The core issue was whether the petitioners committed three defaults in a financial year, as required u/r 8(4)(ii). The undisputed data showed three instances of delayed payments:
- First default: Payment due on 5th November 2001 was made on 4th December 2001 with interest.
- Second default: Payment due on 20th January 2002 (a Sunday) was made on 21st January 2002.
- Third default: Payment due on 20th March 2002 was made on 19th April 2002 with interest.

The petitioners argued that the second instance should not be considered a default as the due date was a Sunday, and payment was made on the next working day, citing Section 10 of the General Clauses Act, 1897. The court agreed, referencing the Supreme Court's interpretation that if a period prescribed by statute expires on a holiday, the act should be considered done within the period if performed on the next working day.

Judgment:
The court held that the payment made on 21st January 2002 should be treated as made on the due date, thus not constituting a default. Consequently, the finding that the petitioners committed three defaults was misplaced. The impugned order dated 28th August 2002 was set aside, and the petition was allowed with no order as to costs.