Prescribed mode of duty payment under Rule 8(4) must be followed; RG 23 debit did not cure default, with re-credit allowed.

Where an adjudicating order required duty to be paid through the account current under Rule 8(4) of the Central Excise (No. 2) Rules, 2001, payment through RG 23 did not satisfy the prescribed mode of discharge. The duty liability therefore survived with consequential interest, and non-compliance justified penalty. At the same time, because the amount had already been debited from RG 23, re-credit of that debit was permitted to avoid double recovery.

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Issues: Whether payment of duty through RG 23, instead of the account current, satisfied the mandate of Rule 8(4) of the Central Excise (No. 2) Rules, 2001, and whether the assessee was entitled to re-credit of the duty debited from RG 23 while also remaining liable to interest and penalty.

Analysis: Under Rule 8(4), once the adjudicating authority had directed payment through the account current for the specified period, the assessee was bound to discharge the duty in that manner. A payment made through RG 23 was not treated as equivalent compliance with that direction. Since the duty was not paid in the prescribed mode, the duty liability for the relevant months survived along with interest. At the same time, because the amount had already been debited from RG 23, the assessee was entitled to re-credit the same. The default in complying with Rule 8(4) also justified imposition of penalty.

Conclusion: The payment through RG 23 did not amount to compliance with Rule 8(4); the duty, interest, and penalty were upheld, and re-credit of the debited amount was allowed.

Final Conclusion: The Revenue's challenge succeeded, and the assessee's cross-objections did not alter the substantive liability arising from non-compliance with the prescribed mode of duty payment.

Ratio Decidendi: Where a statutory order requires duty to be paid through the account current, payment through a different accounting route does not satisfy the rule, and the duty remains recoverable with consequential interest and penalty, though double recovery is avoided by permitting re-credit of the amount already debited.

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