Customs, Excise and Gold Tribunal - CalcuttaG.K.W. Ltd. vs Commissioner Of Central Excise on 25 April, 2003Equivalent citations: 2003(156)ELT72(TRI-KOLKATA)ORDER
 

 Archana Wadhwa, Member (J)1.  Shri S.P. Majumdar, ld. Advocate, appearing for the appellant submits that the facility to pay Central Excise duty on fortnightly basis was introduced w.e.f. 1-4-2000. On three to four occasions there was some delay on their part to deposit the amount in question. Their jurisdictional Superintendent withdrew the said facility for a period of two months and as such the appellant was required to pay the duty on consignment basis. The said duty was paid by them but instead of debiting the same from their PLA account it was debited from their Cenvat account. He fairly agrees that in terms of provisions of Rule 173G(1)(e), during this period they were required to debit the amount from their PLA and were not entitled to use their Cenvat credit account. For the said purpose they were issued a show cause notice and duty of Rs. 19 lakhs (approx.) was confirmed against them along with imposition of personal penalty of identical amount. The adjudicating authority also directed them to pay the interest on the said amount of Rs. 19 lakhs. On an appeal against the above order, they did not succeed before Commissioner (Appeals).Hence the present appeal.2. Shri Majumdar submits that now they have debited the amount confirmed against them from their PLA account and have credited the same in their Cenvat account. However, he submits that the confirmation of interest against them is not justified inasmuch as they had paid the duty, though out of the Cenvat account. He submits that during the relevant period they had paid huge amount from their PLA which they could have paid out of the Cenvat account. As such there is no loss to the Revenue and interest confirmation is not justified. He also submits that for the same reasoning, personal penalty should not be imposed upon them inasmuch as it was the initial days of introduction of the scheme and they were not fully aware of the provisions of law. For the above submissions he submits that there was no economical benefit to them inasmuch as they had been paying huge amounts of duty from their PLA which they could have paid from their Cenvat credit and the present duty of Rs. 19 lakhs could have been paid out of the PLA. This fact reflects upon their bona fides also.3. Countering the arguments, Shri N.K. Mishra, ld. JDR, appearing for the Revenue submits that where the facilities of payment on fortnightly basis is withdrawn, the assessee is required to pay excise duty for each consignment by debit of the account current and in the event of any such failure, it will be deemed as if such goods have been cleared without payment of duty and consequences and penalties as provided in the Central Excise Rules shall follow. As such, he submits that by not paying duty out of the PLA account, it has to be deemed as if the goods have been cleared without payment of duty and the appellants are liable to penalties as provided by the said Rules.4. We have considered the submissions made from both the asides. The facts in the present case are not disputed. The appellant's facility to pay duty on fortnightly basis was withdrawn on account of their failure to pay the duty by due date. As such, as per the provisions of Rule 173G(e) if the manufacturer defaults, the facility to pay the dues in instalments will be forfeited for the period of two months and during that period, the manufacturer shall be required to pay Excise duty on each consignment by debit to the account current referred to in Clause (b) and in the event of any such failure it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as provided in the Central Excise Rules shall follow. The appellants have admittedly not paid the duty from their account current and as such the clearances made by them have to be deemed to have been made without payment of duty. If the payments have not been made, the provisions of Rule 173G(d) provide for payment of interest at the rate of 24% per annum on the outstanding amount for the period starting with the first day after due date till the date of actual payment of outstanding amount. As such even if the appellants have paid the amount of duty by debiting the same from the Cenvat account, inasmuch as the same was not paid through PLA, by deeming provisions of law as contained in one Rule 173G(e), the clearances have to be considered as having been made without payment of duty, in which case, the interest is liable to be paid by the appellants. As such, we do not find any merits in the appellants' contention that as the duty was paid through Cenvat account and was paid subsequently through PLA, there was no revenue loss, no interest should be recovered from them. The provisions as discussed above are very clear and provide for consequences for not paying duty through PLA as a consequence as a result of which payment of interest and penalty is to be upheld. Accordingly we uphold the order of the authorities below as regards the payment of duty and interest. As regards the penalty, we find that the appellants had paid the amount of delayed payment through their Cenvat and during the same period, they paid the duty from their PLA also. As such, it cannot be said that the appellant was benefited by the above mode of payment during the relevant period. Accordingly, after taking into account the overall facts and circumstances of the case, we reduce the quantum of penalty to Rs. 50,000/- (Rupees fifty thousand only) which already stands deposited by the appellants in terms of stay order. Appeal is disposed of in the above terms.