Retrospective application of duty-payment rules rejected; Cenvat credit payment treated as valid discharge of excise duty.

Rule 8(4)(ii) could not be applied to duty payments made before its 1-7-2001 commencement, so the departmental objection to earlier consignment-wise payments failed. Duty paid through the Cenvat Credit Account was also treated as legally effective payment, equivalent to cash payment, and could not be questioned on that basis. The CESTAT therefore rejected the departmental challenge and left the lower appellate authority's order undisturbed.

---

---

Issues: Whether Rule 8(4)(ii) could be applied to duty payments made before its effective date, and whether payment of duty through the Cenvat Credit Account could be questioned.

Analysis: The lower appellate authority had found that the duty was paid consignment-wise from the PLA account till 12-5-2001 and that Rule 8(4)(ii) became effective only from 1-7-2001. The Tribunal also noted that payment through the Cenvat Credit Account has been treated as equivalent to payment by cash, including for the period after 12-5-2001.

Conclusion: Rule 8(4)(ii) could not be applied retrospectively to the respondents, and duty payment through the Cenvat Credit Account could not be faulted.

Final Conclusion: The departmental challenge was rejected and the order of the lower appellate authority was left undisturbed.

Ratio Decidendi: A rule governing duty payment cannot be applied to periods before its commencement, and payment of excise duty through Cenvat credit is legally effective as payment of duty.

---