TMI Blog2013 (6) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to as the Act ), the appellant - Commissioner of Central Excise and Customs has challenged the order dated 19th September, 2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, Mumbai (hereinafter referred to as the Tribunal ) in Appeal No. E/1/2005. While admitting the appeal, this court had, by an order dated 23rd June, 2009 framed the following substantial question of law :- 1. Whether an assessee can avail the facility of making the payment from his deemed creditor account in spite of specific rule to make the payment through account current (PLA) when he defaults in making these fortnightly payment and forfeited the facility of payment of duty on fortnightly basis and whether the judgment of Hon ble High Court of Bombay in the case 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having failed to comply with the provisions of Rule 8, it was liable to pay interest under Rule 8(3) of the Rules. Before the Commissioner, it was contended that if the assessee was required to make payment of duty from the PLA, they should be allowed to take re-credit of the amount paid as duty from their deemed credit account. The said request of the assessee was accepted and it was permitted to take re-credit of the amount of Rs. 9,11,772/- from its deemed credit account. It was also contended on behalf of the assessee that there was no intention to evade payment of duty and as such, there was no reason to impose penalty under Rule 25 of the Rules. The Commissioner (Appeals) was of the view that there is no requirement of mala fide intention for imposition of 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 Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in a warehouse, shall pay the duty leviable on such goods in the manner provided in Rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided. Rule 8 of the Rules, which makes provision for the manner of payment of excise duty, as it stood at the relevant time, reads thus : Rule 8. Manner of payment. (1) The duty on the goods removed from the factory or the warehouse during the first fortnight of the month shall be paid by the 20th day of that month and the duty on the good removed from the factory or the warehouse during the second fortnight of the month shall be paid by the 5th day of 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. Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d month and in respect of the goods cleared during the second fortnight by the 5th of the following month. Sub-rule (3) of Rule 8 provides for payment of interest in case of late payment of duty. Sub-rule (4) which is relevant for the present purpose provides for the consequences of non-payment of duty within the period prescribed and lays down that in case of default by the assessee in payment of any one instalment beyond a period of thirty days from the due date, or in payment of instalment for the third time in a financial year, the assessee shall forfeit the facility of payment of dues in instalments for a period of two months from the date of communication of the order passed by the Deputy Collector of Central Excise in this regard or till such date on which all dues are 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 facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Deputy Commissioner in the order withdrawing the facility and thereby clearly contravened the provisions of sub-rule (4) of Rule 8 of the Rules. 12. The Tribunal, in the impugned order, has merely observed that in view of the decision of the Bombay High Court in the case of Lloyds Steel Industries Limited v. Union of India (supra), the order of Commissioner (Appeals) is required to be set aside without so much as adverting to the facts of the case and discussing as to how the said decision was applicable to the facts of the present case, thereby warranting setting aside of the penalty. Thus, the impugned order passed by the Tribunal is totally bereft of any reasoning. 13. The Bombay High Court in the case of Lloyds Steel Industries Limited v. Union of India (supra) on 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of which any contravention referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or rupees two thousand, whichever is greater. At this juncture it may be apposite to refer to the decision of this court in Commissioner of Central Excise and Customs v. Saurashtra Cement Ltd., 2010 (260) E.L.T. 71 (Guj.) wherein in the context of Rule 25 of the Central Excise Rules, 2002, it was held thus : 17. It is also to be borne in mind that Rule 25 starts with the word Subject to the provisions of Section 11AC . Section 11AC of the Central Excise Act deals with penalty for short levy or non-levy of duty in certain cases. It says that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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