JUDGMENT - DAGA V.C., J.:---The source of this petition is the order dated 28th August, 2002 passed by the Deputy Commissioner of Central Excise, Pune VII Division, Pune, forfeiting the facility of making payment of excise duty on fortnightly basis, in exercise of powers conferred on him under Rule 8(4)(ii) of the Central Excise Rules, 2001 (the 'Excise Rules of 2001' for short), framed under Central Excise Act, 1944 (the 'Excise Act' for short).

THE FACTS

2. The facts giving rise to the present petition are in a narrow compass. They are, the petitioners are the public limited company engaged in business of manufacturing steel and alloys with other allied products which attract payment of excise duty under the provisions of the Central Excise Act.

3. The petitioners were enjoying facility of payment of excise duty payable by them on their products on fortnightly basis under Rule 8(1) of the Excise Rules of 2001, which respondent No. 2 has forfeited by his impugned order dated 28th August, 2002 passed in exercise of powers under Rule 8(4)(ii) of the said Rules, alleging breach thereof by the petitioners.

STATUTORY PROVISIONS

Before proceeding further it may be proper to notice relevant rule, to appreciate the issues involved.

Relevant Rule 8 of the said Rules reads as under:

"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 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 month:

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 day of March.

Provided further that where an assessee is availing of the exemption under a notification based on the value of clearance 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.

(1-A) ..................

(2) .......................

(3) .......................

(4) If the assessee defaults---

(i) ........................

(ii) in payment of instalment by the due date for the third time in a financial year, whether in succession or otherwise, then, the assessee shall forfeit the facility to pay the dues in instalments under this rule for a period of two months, starting from the date of commencement of the order passed by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in this regard or till such date on which all dues are paid, whichever is later, and during this period the assessee shall be required to pay excise duty for each consignment by debit to the account, current and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these Rules shall follow."

4. The above provision lays down that if the assessee commits 3 defaults in one financial year, whether in succession or otherwise, then the assessee shall forfeit the facility to pay the dues in instalments for a period of two months starting from the date of communication of the order passed by the Assistant commissioner of Central Excise or the Deputy Commissioner of Central Excise as the case may be, in this regard, or till such date on which all dues are paid, whichever is later, and during this period the assessee shall be required to pay excise duty for each consignment be debit to the account current and in the event of failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these Rules shall follow.

THE ISSUE

5. Bas

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