9911796707
TMI Blog2002 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... o the respondents to issue necessary certificate in that behalf. The petitioner 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 of 1995 dated December 20, 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 Excise and Salt Act, 1944, which came to be registered as Appeal No. E/845 of 1996-Bom. While the aforesaid appeal was pending before the CEGAT, in the year 1998, the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 12, 1999, but the same was credited into the account of the Revenue with the State Bank of India on February 13, 1999. Therefore, the respondents, by their letter dated August 10, 1999, informed the assessee that as per the provisions of the "Kar Vivad Samadhan Scheme, 1998", the settlement amount should be paid to the Revenue within 30 days from the date of the order, but as the assessee has paid the amount on February 13, 1999, i.e., on the 31st day from the date of the order and, therefore, the benefit of the "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 September 1, 1999, informed the assessee that their e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned as the said delay is due to the circumstances beyond the control of the assessee and, therefore, the respondents cannot be expected to act unreasonably and in an arbitrary manner holding that the petitioner has made the payment on the 31st day and, therefore, they are not entitled for the benefit under the said scheme. 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 No. 2B, therefore, they are not entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of paying a debt. It is not in dispute that the payment under the "Kar Vivad Samadhan Scheme, 1998" could be made by cheque and if this is so, the cheque was delivered to the payee by way of demand on February 10, 1999, which can be seen from the endorsement of the payee's bankers, i.e., the 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement under which the cheques were accepted unconditionally as payment and on another view, even if the cheques were taken conditionally, the cheques not having been dishonoured but having been cashed, the payment related back to the dates of the receipt of the cheques 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. A similar question came up for consideration before the Gujarat High Court in the case of Kangold (India) Ltd. v. CIT [1999] 239 ITR 842. The Gujarat High Court referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 68(2) of the Finance Act, 1997. This doctrine that the payment takes effect from the date of the delivery of the negotiable instrument, has been reaffirmed by the apex court in the case of K. Saraswathy alias K. Kalpana v. P.S.S. Somasundaram Chettiar [1990] 67 Comp Cas 67; AIR 1989 SC 1553. In the said case also the Supreme Court referred to Ogale Glass Works Ltd.'s case [1954] 25 ITR 529 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 the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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