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TMI Blog2006 (3) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... l clearances made in the first fortnight of a calendar month required to be paid on or before the 15th day of that month and the duty for the second fortnight had to be paid on or before the 5th of the next month. In the event of three consecutive defaults, the manufacturer would forfeit the facility of fortnightly payment of duty and, during the period of forfeiture, he would pay duty only from his Personal Ledger Account (PLA). The appellants consecutively defaulted payment of duty for four fortnights comprised in Jan. to Mar., 2002 and consequently the jurisdictional Assistant Commissioner of Central Excise by order dated 14-3-2002 (which was received by the party on 19-3-2002) ordered forfeiture of fortnightly payment facility and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them a penalty of Rs. 2 lakhs. The assessees appeal against its order was dismissed by the Commissioner (Appeals). Hence their appeal before us. 2. Ld. Counsel for the appellants claimed support from the Hon ble Bombay High Court s judgment (dated 13-2-2001) in Lloyd Steel Industries Ltd. v. Union of India [2005 (183) E.L.T. 351 (Bom.)] as also from the Board s Circular No. B/21/51/87-TRU, dated 20-1-1988 and argued that, during the period of forfeiture, duty liability could be validly discharged either by making debits in the account-current or by utilising Cenvat credit. Ld. SDR pointed out that, in the case of Lloyd Steel Industries (supra), there was no dispute on how to discharge duty liability. It was also submitted that, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt any provision of law which made it mandatory for the writ petitioner (assessee) to pay duty only from the account-current. Hence, the Hon ble High Court noted that there was no dispute on how to discharge duty liability during the period of forfeiture of fortnightly payment facility. It appears to us that the decision rendered in the case of Lloyd Steel Industries (supra), on the basis of consensus between the parties to the case, will have no precedent value for the present case, wherein the dispute between the department and the assessee on how to discharge duty liability during the period of forfeiture is in the centre of controversy. Even otherwise, the later decision rendered by a Co-ordinate Bench of the same High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the present case, the appellants had defaulted fortnightly payments of duty four times successively and these defaults were visited with an order of forfeiture of fortnightly payment facility. It is, again, not in dispute that, for the period of default (from second fortnight of Jan. to the first fortnight of Mar., 2002, an amount of duty of Rs. 9,79,378/- remained unpaid and this amount was subsequently debited in their Cenvat account. These debits are said to have been made with the Commissioner s permission. However, in Dec., 2003, the assessee came to know that the Commissioner s permission was not in order and they were directed to pay the amount from PLA. Even thereafter, the party did not choose to pay the amount from PLA. We fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no order of forfeiture of fortnightly payment facility. Apparently, the appellants paid duty for the period Dec., 2002 to Mar., 2003 by way of debits in Cenvat accounts, totalling to Rs. 7,84,573/-. These payments were lawful. We, therefore, set aside the demand of duty to the extent of Rs. 7,84,573/-. 5. The lower authorities imposed a penalty of Rs. 2 lakhs on the assessee under Rule 25 of the Central Excise Rules, 2002. This penalty was associated with a demand of duty of over Rs. 17 lakhs. Where a considerable part of the demand stands set aside, the quantum of penalty would call for reduction. It is also noticed that, while determining the amount of penalty, the lower authorities did not take into account a relevant factor, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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