9911796707
TMI Blog2013 (6) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... of Lloyds Steel Industries Limited v. Union of India reported in 2005 (183) E.L.T. 351 (Bom.) can be made applicable after considering the facts and circumstances of the present case or otherwise?" 2. The respondent assessee, an independent textile processor, was engaged in the manufacture of excisable goods namely, MMF (Processed) falling under Chapter 54 of the Schedule to the Central Excise Tariff Act, 1985. The assessee had been availing the facility of payment of duty on fortnightly basis in terms of the procedure laid down in Rule 8 of Central Excise Rules, 2002 (hereinafter referred to as 'the Rules'). It appears that the assessee had defaulted several times during the financial year; however, it had paid the default amount of central excise duty along with interest under Rule 8(3) of the Rules. By an order dated 28th June, 2002 of the Deputy Commissioner, Central Excise, the facility of instalment payment came to be forfeited for a period of two months starting from the date of communication of the order and till such date on which all the dues were paid. Accordingly, the assessee was restrained from availing of the benefit of fortnightly/monthly basis scheme for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under Rule 25(1)(a) of the Rules and accordingly held that the assessee was liable to pay penalty under Rule 25 for contravention of Rule 8 of the Rules. The assessee carried the matter in second appeal before the Tribunal. 4. The Tribunal, by the impugned order, set aside the order of Commissioner (Appeals) by placing reliance upon the decision of the Bombay High Court in the case of Lloyds Steel Industries Limited v. Union of India, 2005 (183) E.L.T. 351 (Bom.) and allowed the appeal. 5. Mr. Gaurang Bhatt, learned Standing Counsel for the appellant assailed the impugned order by submitting that the assessee despite the clear provision in the rules that duty should be paid only from PLA, cleared the goods after debiting the deemed credit account in contravention of Rule 8 during the period of two months. Therefore, clearance of goods by debiting the deemed credit account was rightly considered to be clearance of goods without payment of duty by the adjudicating authority. It was argued that the Tribunal had erred in relying upon the decision of the Bombay High Court in Lloyds Steel Industries Limited v. Union of India (supra) as the said decision had been rendered in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following month : Provided that in case of goods removed during the second fortnight of the month of March, the duty shall be paid by the 31st day of March : Provided further that where an assessee is availing of the exemption under a notification based on the value of clearances in a financial year, the duty on the goods cleared during a calendar month shall be paid by the 15th day of the following month. Explanation. - For removal of doubts, it is hereby clarified that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date. (2) The duty of excise shall be deemed to have been paid for the purposes of these rules on the excisable goods removed in the manner provided under sub-rule (1) and the credit of such duty allowed, as provided by or under any rule. (3) If the assessee fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with interest at the rate specified by the Central Government vide notification under Section 11AB of the Act on the outstanding amount, for the period starting with the first day after due date till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re paid, whichever is later. The sub-rule further provides that during such period the assessee shall be required to pay excise duty for each consignment by debit to the account current, failing which it shall be deemed that the goods have been cleared without payment of duty and the consequences and penalties under the rules would follow. Thus, Rule 8 of the Rules contains an inbuilt scheme which gives a facility of payment of Central Excise duty on a fortnightly basis and also provides for the consequences of breach of its provisions. 10. It may be recalled that the respondent-assessee, who was availing of the facility of payment of duty on a fortnightly basis under Rule 8 of the Rules, had defaulted in making payment on account of which, by an order passed by the Deputy Commissioner, the facility of making payment in instalments under sub-rule (1) of Rule 8 came to be withdrawn. The assessee was, therefore, required to pay excise duty for each consignment by debit to the account current. However, the assessee, instead of paying the excise duty by debit to the account current, made payment from the deemed credit account. It is the case of the appellant that payment out of deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reliance has been placed by the Tribunal while allowing the appeal has observed thus : "It is not disputed that the liability to pay duty can be discharged by debiting the account current or utilising Cenvat credit, which is considered as good as making payment by debiting account current, in support of which reliance has been placed on the circular issued by the Central Board of Excise and Customs on 20-1-1998." Thus, it is apparent that the said decision was rendered on a concession by the respondent that utilising Cenvat credit is as good as making payment by debiting to the account current, which is not so in the present case. Here it is the specific case of the appellant that sub-rule (4) of Rule 8 of the Rules, mandates that in case of failure to make payment as provided thereunder, during the period of forfeiture, the assessee shall make payment only through the account current, that is, PLA and that payment of duty through the deemed credit account amounts to clearance of goods without payment of duty. The Tribunal has, therefore, wrongly applied the said decision of the Bombay High Court to the facts of the present case. 14. After holding that there is a clear co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of Section 11AC, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking Section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short-levied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any wilful misstatement or suppression of facts. If these ingredients are not present, penalty under Section 11AC cannot be levied. Since Rule 25 can be invoked subject to the provisions of Section 11AC of the Act, as a natural corollary, the ingredients mentioned in Section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules." 17. Thus, in the light of the principles propounded in the above decision, for the purpose of invocation of Rule 25 of the Rules, what is required to be examined is as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
