TMI Blog2008 (3) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... f Act, 1985. They have been discharging duty liability on the finished goods in terms of Rule 8 of the Central Excise Rules, 2002 (hereinafter referred to as the Rules). 4. The brief facts of the case are that on scrutiny of ER-1 return of the Respondents for the month of May, 2005, it was observed that they had assessed total duty liability on their finished goods, cleared during the month of May, 2005, as ₹ 26,41,229/-, which, as per Rule 8 of the Rules, was to be discharged by 5th of June, 2005. Out of the total duty, so assessed, the Respondents paid an amount of ₹ 17,25,631/- by debiting through Cenvat account, by the end of stipulated period, as provided under Rule 8(1) of the Rules. The party defaulted in payment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra pertains to the Central Excise Rules, 1944, whereas the present case is covered under the Central Excise Rules, 2002, and is to be governed by the Rules framed thereunder. Hence, the aforesaid judgment is not applicable in this case. 7. It is clear from the plain reading of the Rule 8(1) of the Rules that the duty on the goods removed from the factory or the warehouse during a month shall be paid by the 5th day of the following month. Rule 8(2) provides that 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. In this case, the Respondents defaulted in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-05 the orders for withdrawal of the facility to the Respondents to pay duty in monthly instalments (in respect of default for the month of April, 2005), issued by the Assistant Commissioner, vide order dated 21-7-2005, were very much operational. Accordingly, in terms of Rule 8(3A) of the Rules, the Respondents were required to pay the outstanding amount of duty by way of debit from the account current (PLA) and not from the Cenvat Credit Account. 8. Moreover, the outstanding duty discharged by the Respondents through the Cenvat credit is also not proper and is not in consonance with Rule 3 of the Cenvat Credit Rules, 2004, as the Cenvat credit earned during the months of July to September, 05 has been utilized for payment of duty for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to payment of duty during the period of forfeiture of the fortnightly facility. It prescribes that such payment be effected by way of debit to the account current. This account current is, obviously, the Personal Ledger Account (PLA). The assessee, in the instant case, did not fully comply with this requirement inasmuch as the payment of duty during the period of forfeiture was made partly through debits in Cenvat account. As rightly 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 agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Being penal in nature, it also withdraws the facility to use credit during this period of two months of withdrawal. Otherwise, we cannot find any reason to pick only expression account current out of the two expressions used in clause (b) if the same was not meant for any distinction. As such, reference by the learned Advocate to Rule 9 and pre 2000 Rule 173G to impress upon his arguments that debit in credit account is also utilisation of account current cannot be accepted. 9...... 10. The Tribunal in the case of Kolhapur Steel Ltd., 2004 (163) E.L.T. 393 (Tri.-Mumbai) while dealing with the said issue observed as under, in Para 6 to 7 :- The appellant s contention that the expression Account Current used in Rule 8(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Dei.) (c) Pioneer Alloy Casting Ltd. v. CCE, Chennai - 2004 (165) E.L.T. 421 (T) = 2004 (60) R.L.T. 558 (CESTAT -Chen.) Inasmuch as the issue also stands decided by the above decisions and in view of our discussions in the preceding paragraph, we find no justifiable reasons to take a different view. 12. At this stage, we may also take note of basis manual of departmental instructions issued vide F. No. 22-93-81-CX. 6, dated 17-6-1982 appearing at page 150 as Paras 96 to 97. The heading of the said paragraphs is Application for account current laying down as to how the Personal Ledger Account is to be opened and how the same is to be used. This also reflects upon the understanding of the expression account current as refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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