Distinct excise levies must be paid only through authorised accounts; RG 23 credit cannot be used without express rule-based permission.

Additional duty of excise on textiles and textile articles was not permitted to be discharged from the basic excise duty accounts maintained in RG 23A Part-II or RG 23C Part-II, because Rule 57A and Rule 57Q, read with Notification No. 5/94-C.E. (N.T.), did not authorise use of those credit accounts for a distinct levy imposed under another enactment. The prescribed mode of payment remained the account current/PLA or a separate account specifically meant for that duty. The commentary also notes that a related penalty issue was treated as procedural, with the quantum reduced.

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Issues: (i) whether additional duty of excise on textiles and textile articles could be debited from the basic excise duty account maintained in RG 23A Part-II under Rule 57A; (ii) whether such duty could be debited from the basic excise duty account maintained in RG 23C Part-II under Rule 57Q, and whether the penalty required interference.

Issue (i): whether additional duty of excise on textiles and textile articles could be debited from the basic excise duty account maintained in RG 23A Part-II under Rule 57A

Analysis: Rule 57A read with Notification No. 5/94-C.E. (N.T.) did not permit payment of additional duty of excise on textiles and textile articles from the basic excise duty account in RG 23A Part-II. The two levies were distinct, and additional duty of excise could be discharged only through the account current / PLA or the prescribed separate account meant for that duty.

Conclusion: The debit from RG 23A Part-II was held impermissible and the assessee failed on this issue.

Issue (ii): whether such duty could be debited from the basic excise duty account maintained in RG 23C Part-II under Rule 57Q, and whether the penalty required interference

Analysis: Rule 57Q read with Notification No. 5/94-C.E. (N.T.) also did not authorise utilisation of the basic excise duty account in RG 23C Part-II for discharging the additional duty of excise levied under a different enactment. The contrary view taken in appeal was set aside. On penalty, the lapse was treated as procedural and the quantum was reduced.

Conclusion: The debit from RG 23C Part-II was held impermissible, the Revenue succeeded on this issue, and the penalty was reduced to Rs. 10,000/-.

Final Conclusion: The assessee's substantive challenge failed, the Revenue's challenge succeeded on the legality of the RG 23C debit, and only limited relief was granted by reduction of penalty.

Ratio Decidendi: Additional duty of excise cannot be discharged from a basic excise duty account unless the governing rule or notification expressly authorises such utilisation, because basic excise duty and additional duty of excise are distinct levies.

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