Default of monthly payment of duty – Payment only through PLA – no need of order from Assistant Commissioner
Rule 8 (3A) of the Central Excise Rules, 2002, reads as
If the assessee defaults in payment of duty by the date prescribed in sub-rule (2) and the same is discharged beyond a period of thirty days from the said date, then the assessee shall forfeit the facility to pay the duty in monthly instalments under sub-rule (1) 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 including interest thereof are paid, whichever is later, and during this period notwithstanding anything contained in sub-rule (4) of rule 3 of CENVAT Credit Rules, 2004, 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.
To invoke the provisions of this sub rule, an assessee has to first default payment of duty by the date prescribed in sub-rule (2)
Now strangely Sub Rule 2 does not fix any date for payment of duty. It reads,
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.
It is sub rule 1 which prescribes the date for payment of duty. So all these days truly the TRU had not conferred any authority to make the assessee pay the duty consignment wise in PLA. It was only an assumption of the department and could never be enforced. Now this mistake is rectified and in doing so, the Government has made some major changes. The duty has to be paid from PLA consignment wise till dues are cleared with interest and there is no need of any order from the Assistant Commissioner/Deputy Commissioner.
But we carried a Tribunal judgement recently which held that payment of duty by utilizing the cenvat credit during the default period is as good as payment from PLA. -
NOTIFICATION NO. -C E (N.T.), Dated : June 1, 2006