9911796707
TMI Blog2002 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... ner is engaged in manufacturing and trading of Synthetic Organic Dye falling under Heading No. 3204.29 in the Central Excise Tariff. By order-in-original No. 46/95, dated 20-12-1995, the respondents held that the assessee is liable to pay Rs. 4,22,043/- towards the Central Excise Duty and Rs. 20,000/- towards penalty, on the ground that the assessee had taken excess Modvat credit. The said order was challenged before the CEGAT by filing an appeal under Section 35B of the Central Excises & Salt Act, 1944, which came to be registered as Appeal No. E/845/96-Bom. While the aforesaid appeal was pending before the CEGAT, in the year 1998, the Central Government came up with a scheme known as "Kar Vivad Samadhan Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99. Therefore, the respondents, by their letter dated 10th August, 1999, informed the assessee that as per the provisions of "Kar Vivad Samadhan Scheme, 1998", the settlement amount should be paid to the Revenue within 30 days from the date of order, but as the assessee has paid the amount on 13-2-1999 i.e. on 31st day from the date of order and, therefore, the benefit of "Kar Vivad Samadhan Scheme, 1998" cannot be given to the assessee. The assessee thereafter tried to explain the correct position to the respondents who, by their letter dated 1st September, 1999, informed the assessee that their explanation is not accepted and it is in these facts and circumstances, the assessee has approached this Court. 3.It is the contention of Mr. Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the petitioner has made the payment on 31st day and, therefore, they are not entitled for the benefit under the said scheme. 4.Mr. Govind Mishra, Senior Standing Counsel, appearing for the respondents, submits that the defendants do not wish to file any return in the matter and the record speaks for itself. It is submitted that the respondents are justified in informing the petitioner that as they have failed to pay the settlement amount within 30 days from the date of the receipt of the order in Form 2B, therefore, they are not entitled to the benefit of "Kar Vivad Samadhan Scheme, 1998. According to Mr. Mishra, admittedly, the actual tender of the amount in the credit of the respondents was made on 13-2-1999 i.e. on 31st day whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Payees Bankers i.e. State Bank of India, Chhaoni Branch on TR6 Challan, which shows that it was received as such by the Bankers of the respondents and, therefore, it operates as payment and will have to be construed as an extinguishment to that extent of the debt, though this is, no doubt, subject to a condition subsequent that if upon due presentation, the cheque is not paid, the original debt would revive. It is also not disputed that the account of the petitioner with his bankers Parmatma Ek Sevak Nagarik Sahakari Bank Limited, was debited on 12-2-1999 and it came to be credited in the account of the respondents with S.B.I. on 13-2-1999. Therefore, there could be no hesitation to hold that a cheque bearing to have been paid by the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the law the dates of payments were the dates of the delivery of the cheques." Therefore, it is a settled position that a cheque unless dishonoured, is payment. The payment takes effect from the delivery of the cheque, but is defeated by happening of the condition i.e. non payment at maturity. 9.A similar question came up for consideration before Gujarat High Court in the case of Kangold (India) Ltd. v. Commissioner of Income Tax - (842 ITR 239), the Gujarat High Court referring to the Ogale Glass Works Ltd.'s case held that it is a settled legal position that in case of payment by cheque, the payment is deemed to have been made on the date of delivery of the cheque and not on the date of encashment when the cheque was honoured. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said case also the Supreme Court referred to Ogale Glass Works Ltd.'s case and reiterated the doctrine that payment by cheque realised subsequently on the cheque being honoured and encashed relates back to the date of the receipt of cheque, and in law, the date of payment is the date of delivery of the cheque. It was further held that payment by cheque is an ordinary incident of present day life, whether commercial or private, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment, if the cheque is subsequently encashed in the ordinary course. 11.We having come to the conclusion that the petitioner discharged their liability by making the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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