Lloyds Steel Industries Limited Vs. Union of India (Uoi) - Court Judgment

Excerpt:

.....our attention has been drawn to the notification dated 31st march, 2000, particularly to rule 49(e)(i) and (ii), which read as under :(e) if the manufacturer defaults on account of -(i) full payment of any one instalment is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, or (ii) the due date on which full payment of instalments is to be made is violated for the third time in a financial year, whether in succession or otherwise, then the manufacturer shall forfeit the facility to pay the dues in instalments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account correct referred and in clause (b) and in the event of any failure, it will be deemed as if such goods have been cleared without payment of du under the said provisions where facility of payment of duty on fortnightly basis on removal of goods from the factory premises or from an approved place of removal is granted under the said rule, in such contingency,..........attention has been drawn to the notification dated 31st march, 2000, particularly to rule 49(e)(i) and (ii), which read as under :'(e) if the manufacturer defaults on account of -(i) full payment of any one instalment is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, or(ii) the due date on which full payment of instalments is to be made is violated for the third time in a financial year, whether in succession or otherwise, then the manufacturer shall forfeit the facility to pay the dues in instalments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account correct referred and in clause (b) and in the event of any failure, it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow.'5. it is not in disputed that the petitioner who is manufacturer has defaulted on account of the facility extended to him to discharge his.....

Judgment:

ORDER

1. Heard.

2. Rule.

3. The learned counsel appearing for the revenue is unable to place before us any provision to show that the petitioner is not entitled to utilise the CENVAT credit for payment of Central Excise duty on the clearance of final product.

4. Our attention has been drawn to the notification dated 31st March, 2000, particularly to Rule 49(e)(i) and (ii), which read as under :

'(e) If the manufacturer defaults on account of -

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

(ii) the due date on which full payment of instalments is to be made is violated for the third time in a financial year, whether in succession or otherwise, then the manufacturer shall forfeit the facility to pay the dues in instalments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account correct referred and in clause (b) and in the event of any failure, it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow.'

5. It is not in disputed that the petitioner who is manufacturer has defaulted on account of the facility extended to him to discharge his duty liability by debiting the account current or utilising Cenvat credit. Under the said provisions where facility of payment of duty on fortnightly basis on removal of goods from the factory premises or from an approved place of removal is granted under the said Rule, in such contingency, it is provided that the manufacturer shall forfeit the facility to pay the dues in instalments under this sub-rule for a period of two months, starling from the date of communication of an order passed by the proper officer in this regard and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account current referred to in Clause (b).

6. It is not disputed that the liability to pay duty can be discharged by debiting the account current or utilising Cenvat credit, which is considered as good as making payment by debiting account current, in support of which reliance has been placed on the circular issued by the Central Board for Excise and Customs on 20-1-1998.

7. As such prima facie, the petitioner is entitled to utilise Cenvat credit for payment of central excise duty on the clearance of final product.