All for Rs. 10/-
AS per the Rule 8 of CER, 2002, in case of goods removed during the month of March, the duty shall be paid by the 31st day of March. In the present case, for the month of March 2007, the appellant should have paid the duty on or before 31.03.2007. The appellants have paid duty but there was a difference of Rs.10/- [Rupees Ten only] while calculating the amount for payment, which they paid in the month of June 2007.
Call it avoidable harassment or a strict interpretation of the rule, but the fact is that the jurisdictional authorities felt that the short payment of this princely sum of Rs.10/- attracts the provisions of rule 8(3A) and which reads -
"If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notwithstanding anything contained in said sub-rule (1) and sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004, the assessee shall, pay excise duty for each consignment at the time of removal, without utilizing the CENVAT credit till the date the assessee pays the outstanding amount including interest thereon; 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."
So, a SCN was issued seeking recovery of the duty of Rs. 2,12,345/- through PLA/account current along with interest and imposition of equivalent amount of penalty as the appellant had utilized CENVAT credit for payment of duty after the default of Rs. 10/- and which was not permissible as per the subject rule.
The adjudicating authority upheld the charges and the Commissioner(A) too found no fault in this order.
The appellant had to take his case to the CESTAT for it was too heavy a price he had to pay for the short payment of an amount equivalent to a chhota recharge of Rs. 10/-.
The Bench observed -
"4. Considering the fact that the entire amount of duty along with higher education cess has been already been paid by the appellant and there was a mis-calculation which resulted in short payment of Rs. 10/- only which was also paid by the appellants on their own. In these circumstances, the impugned proceedings were not warranted…."
The order of the lower authority was set aside and the appeal was allowed.
Although the Board has circulated an undated letter F. No.-6 [See DDT 2191] with the subject line "Review of rule 8(3A) of the CER, 2002" based on the representation from the Trade that the rule does not make a distinction between cases of bonafide mistake which can lead to default in payment of duty and cases of willful default and indicated that it wishes to amend the rule, if it was really sincere it should have gone ahead and not resorted to calling for inputs from the field formations.
By the way, did the Board follow a similar ideology when they went ahead and amended the rules 8, 9 & 10 of the Valuation Rules, 2000?
As for the review of Rule 8(3A), the Trade is still waiting for a response.
Perhaps the Board is yet to receive those 'elusive' inputs from the field!