JUDGMENT - DAGA V.C., J.:---This petition is directed against the order dated 1st October, 2002 passed by the second respondent (Exhibit-C) forfeiting the facility of payment of duty allowed on fortnightly basis under Rule 8(4) 2001 of the Central Excise Rules, 2001 (the 'Rule' for short) framed in exercise of the powers conferred under section 37 of the claimed under the provisions of the Central Excise Act, 1944 (the 'Act' for short).

FACTS

2. The petitioner is a private limited company engaged in the business of manufacturing steel wire, having its factory at Anandnagar, M.I.D.C., Ambernath (Maharashtra). The product manufactured by the petitioners attracts payment of excise duty under the provisions of the Act. The petitioners were enjoying facility of payment of duty on fortnightly basis under Rule 8(4) of the Rules. The relevant Rule 8 reads as under :---

"(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 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. (Emphasis supplied)

(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 such duty allowed, as provided by or under any Rule.

(3) If the assessee fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with interest at the rate specified by the Central Government vide notification under section 11-AB of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount.

(4) If the assessee defaults :---

(i) in payment of any one instalment and the same is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, or

(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 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 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."

3. The above provision lays down that if the assessee commits three defaults in succession or otherwise within a period of one financial year in the matter of payment of duty, then only the assessee shall forfeit the facility to pay dues in instalments under this Rule for a period of 2 months starting from the date of communication of the order passed by the Assistant Commissioner of Central Excise or the Deputy Commissioner of the 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

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