TMI Blog2002 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... moved from the factory or the warehouse during the first fortnight of the month shall be paid by the 20th of that month and the duty on the goods removed from the factory or the warehouse during the second fortnight of the month shall be paid by the 5th of the following months : Provided that in the case of goods removed during the second fortnight of the month of March, the duty shall be paid by the 31st 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 goods cleared during a calendar month shall be paid by the 15th day of the following month. Explanation :- For removal of doubts, it is hereby clarified that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date. (2) 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. (3) If the assessee fails to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on the date when the impugned order was passed. In the impugned order dated 1-10-2002 passed by the Dy. Commissioner of Central Excise , Kalyan II Division, Kalyan, the alleged three defaults committed by the Petitioners set out are as under :- S. No. Duty payable for the period Amount of Duty (Rs.) Bankers Acknowledgement Due Date of Cheque Release of TR-6 Challan (i) 16 May, 2002 to 31 May, 2002 80,811/- 4-6-2002 5-6-2002 6-6-2002 (ii) 16 July, 2002 to 31 July, 2002 1,10,000/- 3-8-2002 5-8-2002 6-8-2002 (iii) 1 Aug., 2002 to 15 Aug., 2002 1,23,330/- 19-8-2002 20-8-2002 21-8-2002 5.The perusal of the impugned order based on the above tabular data would show that the Petitioner made payments by depositing cheques with the bankers of the Revenue on 4-6-2002, 3-8-2002 and 19-8-2002 towards the duty for the period ending on 31-5-2002, 31-7-2002 and 15-8-2002 respectively. In respect of these three periods, the due dates were 5-6-2002, 5-8-2002 and 20-8-2002. The narration of these facts would show that the petitioners deposited cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the cheque by the authorised bankers of the Revenue should be treated as date of payment of duty. It is further contended that if payments are made by cheques and ultimately, if the cheques are realised, then upon such realisation, the payments made should be treated as having been made on the date when the cheques were delivered or deposited. In the submission of the learned Counsel for the petitioner, the realisation of the cheque will relate back to the date of delivery or deposit, payment, as such petitioner could not be as defaulter in payment of duty under Rule 8(1) of the Rules of 2001. He relied on the case of K. Saraswathi Alias K. Kalpana (Dead) by LRS. v. P.S.S. Somasundaram Chettiar reported in (1989) 4 Supreme Court Cases, 527 and relied on the observation to say that payment by cheque is an ordinary incident of present day life, whether commercial or private, and if the payment is made by cheque, it should be taken to be due payment, if the cheque is subsequently encashed in the ordinary course. He also placed reliance on another Judgment C.I.T. v. Ogale Glass Works Ltd. reported in 1954 (25) I.T.R. 529 to contend that if the cheques were accepted by the bankers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Rule 8(4) of the Rules of 2001 and undisputed facts emerging on record. 12.The learned Counsel for the Petitioner, in rejoinder, tried to contend that the Rule 8 cannot be said to be a mandatory rule. In his submission, the rule sought to be relied by the Revenue is directory. The Petitioner has substantially complied with the provisions thereof, as such the impugned order of forfeiture is bad and illegal and the same is liable to be quashed and set aside. CONSIDERATION FINDINGS 13.The main argument advanced before us, as before the respondent No. 2, by the learned Counsel for the petitioner, is that the Revenue received the payment of duty when the cheque was deposited with their bankers. In other words, the Revenue accepted the cheques in full satisfaction of the duty liability through their bankers, who acted as agents of the Revenue. Rule 8 of the Rules of 2001 sought to be pressed in service must be considered to be directory having regard to its objects. As already discussed hereinabove, the rule contemplates if the assessee commits 3 defaults in succession or otherwise within a period of one financial year in the matter of payment of duty, then only the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is left which is relevant for the purpose of the explanation in order to suppress the mischief and advance the object of the Act, it can help or assist the Court in interpreting the true purport and intendment of the enactment. 15.Having seen the purpose and role of the explanation in the light of the well recognised principles of interpretations, it is also well settled that where the statute provides the time at or within which some act has to be done by the executive, it is supposed to be permissive with regard to the issue of time only. Of course, the provision regarding time may be considered mandatory if the intention of the legislature appears to be to impose literal compliance with the requirement of time. Where the rights of private person depend upon his compliance with the provisions of an enactment, those provisions are deemed to be mandatory. The difference between a mandatory rule and a directory rule is that while the former must be strictly observed, in the case of the latter, substantial compliance may be sufficient to achieve the object regarding which the rule is enacted. Certain broad propositions which can be deduced from several decisions of Courts regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory provision must be obeyed and any act done in breach thereof will be invalid, but if it is directory the act will be valid. 17.Thus, keeping in view the aforesaid judicially recognised principles in mind, if one turns to Rule 8 of the Rules of 2001 in general and Rule 8(1) followed by sub-rule (4) of Rule 8, it would be clear that the non-compliance of the rule in question is made penal. It, therefore, has to be treated as mandatory. As such, the payment of duty ought to have been made by the petitioner either before the due date or on the date specified. In other words, payment ought to have been credited to the account of the Revenue at least by the due date. In this case, none of the payments have been made on or before the due dates and, therefore, no fault can be found with the impugned order. None of the cases cited by the learned Counsel appearing for the petitioner deals with the specific mandatory provision directing payment on a particular specific date prescribed by the statute. As a matter of fact in the case of K. Saraswathy (supra) the Court ruled that the payment by cheque is an ordinary incident of present day life, whether commercial or private, and unless i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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