9911796707
TMI Blog2004 (10) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... irst fortnight of a month on or before the 20th day of that month. In respect of the second fortnight of a month, they were liable to pay duty on or before the 5th day of the succeeding month. The appellants failed to pay duty within the prescribed time in respect of the first fortnight of September 2001 and both the fortnights of October 2001. On account of these defaults, the jurisdictional Dy. Commissioner ordered forfeiture of the above facility. This order was received by the party on 3-12-2001. Therefore, in terms of Rule 8 ibid., the forfeiture was for a period of two months commencing on 4-12-2001. After expiry of this period, the assessee started paying duty again on fortnightly basis. During the period of forfeiture, they paid dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial situation covered by Rule 8(4) of the Central Excise (No. 2) Rules, 2001. In other words, the special provisions of Rule 8(4) would prevail over the general provisions of Rule 3(3) ibid. In this connection, reliance has been placed on the Bombay High Court's ruling in Vidushi Wires Pvt. Ltd. v. UOI, 2003 (156) E.L.T. 168 (Bom.), wherein compliance with Rule 8(1) [which prescribed the manner of payment of duty] was held to be mandatory and non-compliance was held to have penal consequences. 4. After giving careful consideration to the submissions, I find much force in the argument of the SDR. The penal consequence referred to by the Hon'ble High Court was what was laid down under sub-rule (4) of Rule 8 ibid. This sub-rule reads as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htly pointed out by learned SDR, the above provision is penal to the extent of forfeiting the asseesee's right to avail Modvat facility in payment of duty on final product during the period of forfeiture of fortnightly facility. At this stage, learned Counsel submits, under instructions, that the appellants are agreeable for payment of the aforesaid amount of duty in cash, if they are allowed to take recredit of duty in their Cenvat account. I am of the view that this suggestion, which is not prejudicial to the Revenue, should be accepted. 6. Ld. Counsel has argued that the appellants had no intent to evade payment of duty. This argument is evidenced by the correspondence between the appellants and the department, available on record. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparently, it was on the basis of their understanding of sub-rule (4) of Rule 8 ibid that they paid a part of the duty for the period of forfeiture by way of debit in Cenvat account. In the absence of intent to evade payment of duty, it was not open to the lower authorities to invoke Rule 25 of Central Excise (No. 2) Rules, 2001 for penalizing the assessee. Therefore, the penalty of Rs. 25,000/- imposed on the appellants requires to be vacated. 7. In the result, the finding of the Commissioner (Appeals) that the appellants were liable to pay duty wholly by way of PLA debit during the period of forfeiture is upheld but the penalty imposed on them is set aside. The appellants are directed to pay the duty (with interest thereon in terms of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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