Cash-equivalent duty payment by bankers' cheque defeats penalty where bank realisation delay was outside the assessee's control.

Penalty was not leviable where duty credit was taken in the personal ledger account on the same day as tendering bankers' cheques and TR-6 challans, because the instruments were treated as cash-equivalent payment and the delay in Government account credit arose from bank processing and realisation. The appellant had acted consistently with RBI clarification and the Commissioner's trade notice, and no mechanism was shown by which the appellant could know the actual date of realisation. On that basis, the allegation of PLA overdrawal and removal of goods without duty payment was not sustainable, and relief followed.

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Issues: Whether penalty was leviable for taking credit in the personal ledger account on the same day as tendering bankers cheques and TR-6 challans, before the amounts were actually realised in the Government account.

Analysis: The appellant had tendered bankers cheques, a value paid instrument, along with TR-6 challans and acted in line with the Reserve Bank of India clarification and the Commissioner's trade notice treating such instruments on par with cash payment. The delay in crediting the Government account was due to bank processing and realisation, not any act or omission on the part of the appellant. As no mechanism was shown by which the appellant could know the date of actual realisation, the finding of overdrawal of PLA and removal of goods without payment of duty was not sustainable against the appellant, and there was no basis to attribute fault or contributory negligence.

Conclusion: Penalty was not leviable and the appellant was entitled to relief.

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