Cheque deposit and bank processing delay cannot defeat timely excise duty payment when the cheque is honoured.

Under Rule 8 of the Central Excise (No. 2) Rules, 2001, duty under the fortnightly payment scheme is treated as credited when the assessee deposits a cheque, the cheque is honoured, and the bank issues receipt on the TR-6 challan. Delay in transmission of funds to the Government account due to the banking process should not prejudice the assessee where control ends after deposit. The text states that the lower authorities did not properly apply the departmental clarification, and relief was granted by staying the impugned orders while the benefit of the rule was directed to continue.

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Issues: Whether, under Rule 8 of the Central Excise (No. 2) Rules, 2001, duty can be treated as paid within time when the assessee has deposited the cheque in bank and the delay in credit to the Government account is attributable to the banking process.

Analysis: The provision under the fortnightly payment scheme required duty to be credited to the Central Government by the specified date, but the departmental clarification indicated that once the assessee deposits a cheque and it is honoured, with the bank giving receipt on the TR-6 challan, the amount is to be treated as credited. The order found that the original authority and the appellate authority had not applied this clarification in the proper perspective. The assessee's case was considered strong because the assessee had no control over the internal banking process after deposit of the cheque.

Conclusion: The assessee was entitled to relief, and the operation of the impugned orders was stayed while the jurisdictional Central Excise authority was directed to continue permitting the benefit of the rule.

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