Amended Rule 8(3A) limits monthly duty payment restriction until arrears and interest are paid under central excise rules.

Amended Rule 8(3A) of the Central Excise Rules, 2002 was discussed as a temporary restriction on payment of duty by monthly facility after default beyond thirty days, operating only until the outstanding duty with interest was paid. The text states that once the assessee discharged the arrears and interest before the impugned order, the basis for continued denial of monthly payment ceased. It further records that the forfeiture of the monthly duty payment facility for two months was not sustainable on that footing, and that the entitlement to pay duty on a monthly basis was upheld.

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Issues: Whether the amended Rule 8(3A) of the Central Excise Rules, 2002 applied to the assessee after payment of the outstanding duty and interest, and whether the forfeiture of the facility to pay duty on a monthly basis for two months was sustainable.

Analysis: The dispute turned on the effect of the amended Rule 8(3A). The assessee had already discharged the outstanding duty liability with interest before the impugned order was passed. The amended provision provided that, on default beyond thirty days, duty would be paid on each clearance without utilizing CENVAT credit only till the outstanding amount together with interest was paid. Once such payment was made, the basis for insisting on daily payment ceased. The appellate authority therefore correctly held that the order forfeiting the monthly payment facility was not governed by the amended regime in the manner suggested by revenue.

Conclusion: The amended Rule 8(3A) applied, and the forfeiture of the monthly payment facility was not sustainable. The assessee's entitlement to pay duty on a monthly basis was upheld.

Ratio Decidendi: Where the outstanding excise duty and interest are paid before the penal consequence is enforced, the amended Rule 8(3A) does not justify continued denial of the monthly duty payment facility beyond the statutory period contemplated by the rule.

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