Per G R Sharma :

In the impugned order the learned Commissioner (Appeals) held that unless cheques are dishonoured the relevant date of payment would be the date of presentation of the cheque in the notified back and not the date of encashment of the cheque and subsequent stamping thereof on the TR-6 challans by the concerned notified bank. Being aggrieved by this order Revenue has filed captioned appeal.

2. The facts of the case in brief are that M/s Genus Overseas Electronics Ltd., the respondent herein are central excise registration holder. On scrutiny of their records it was observed that the respondent herein were paying duty through cheques. In terms of Rule 49 (I) read with Rule 8 of Central Excise (No. 2) Rules, 2001 a manufacturer was required to pay duty in respect of clearances of excisable goods during the first fortnight of the month by the 20th day of that month and during the second fortnight of the month other than the month of March by the 5th day of the succeeding month. On scrutiny of the records of the respondent herein it was noticed by the department that for the period 16th April, 2001 to 30th April, 2001 they issued a cheque for payment of duty. The cheque was cleared on 7.5.2001 when the date for payment of duty was 5.5.2001. For the period 16.5.2001 to 31.5.2001 the date of clearance of the cheque was 7.6.2001 when the due date for payment of duty was 5.6.2001. Again for the period from 16.7.2001 to 31.7.2001 cheque was cleared on 6.8.2001 as against the due date of 5.8.2001.

3. In terms of Rule 49(1)(e) of erstwhile Central Excise Rules, 1944 read with Rule 8 (4) (ii) of Central Excise Rules, 2001 the stipulation was that if the manufacturer defaults on account of due date on which full payment of installment is to be made is violated for the third time in a financial year, then the manufacturer shall forfeit the facility to pay the duty in installment under this rule for a period of two months starting from the date of communication of the order passed by the proper officer in this regard and during this period the manufacturer was required to pay excise duty on consignment to consignment basis by debit in the current account.

4. Since there was delay of two days in the two cases and one day in the third case during the same financial year. The assessee forfeited the facility of fortnightly payment of duty under Rule 173G(1)(e) read with Rule 8(4)(ii) of Central Excise (No. 2) Rules, 2001 for a period of two months. Being aggrieved by this order, the assessee went before the Commissioner (Appeals). The learned Commissioner (Appeals) held that the assessee had paid the duty on time; that unless cheques are dishonoured the relevant date of payment would be the date of presentation of the cheque in the notified bank and not the date of clearance of the cheque; that the assessee had presented the cheques before the due date for payment of duty.

5. Shri Mewa Singh alongwith Shri Rajeev Tandon, learned SDRs submit that the learned Commissioner (Appeals) decided the issue in terms of the Central Treasury Rules and General Clauses Act, 1997 and observed that in the present case the date of presentation of the cheque in the notified bank was not disputed; that as verified through Chief Accounts Officer the practice is that notified bank does not give any receipt on the date of presentation of the cheque to them; that the receipt generally stamped on the TR-6 challan is given by them only after the cheque has been cleared; that in the instant case it is also noticed that the departments case is not one related to dishonouring the cheque presented: that in view of the above the appellants can not be held responsible for late clearance of cheque as that is something beyond their control. The learned Commissioner, therefore, held that considering the dates mentioned in the chart it was clear that the payments were made by them in time. The learned Commissioner also held that in Sanghi Polyester Ltd. Vs. CCE, Hy