Monthly duty payment facility applies to inputs and capital goods, so delayed next-month payment did not justify interest or penalty.

Duty on removal of inputs and capital goods could be discharged under the monthly payment facility in Rule 8 of the Central Excise Rules, and that facility was not confined to final products. On that reasoning, payment made on the 5th day of the following month in accordance with the monthly scheme did not warrant levy of interest or penalty. Earlier Tribunal decisions treating the issue as settled were followed, and the absence of any surviving recoverable default was reinforced by the dropping of subsequent proceedings on the same ground. The interest demand and penalty were therefore set aside in favour of the assessee.

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Issues: Whether duty on removal of inputs and capital goods could be paid under the monthly payment facility under Rule 8 of the Central Excise Rules, and whether interest and penalty were leviable for payment made on the 5th day of the next month.

Analysis: The issue was treated as settled by earlier Tribunal decisions holding that the fortnightly or monthly payment facility is available even for removal of inputs and capital goods and is not confined to final products. In that view, payment made in the following month in accordance with the monthly facility did not justify confirmation of interest or imposition of penalty. The existence of subsequent proceedings on the same ground being dropped further supported that no recoverable default survived.

Conclusion: The demand of interest and the penalty were not sustainable and were set aside in favour of the assessee.

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