Cheque payment date for duty is the date of presentation when the cheque is honoured; penalty fails without dishonour.

Where duty is tendered by cheque and the cheque is duly honoured, payment is treated as made on the date of presentation, not on the date of encashment. Mere delay in clearance does not change the character of the payment or, by itself, sustain a penalty. On the facts, the cheque was not dishonoured and no basis was shown to disregard the earlier view relied upon by the Commissioner (Appeals). The Revenue challenge therefore failed, and the penalty was held not sustainable.

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Issues: Whether duty paid by cheque is to be treated as paid on the date of presentation of the cheque or on the date of encashment, and whether penalty could be sustained when the cheque was not dishonoured.

Analysis: The Tribunal followed the settled position that where a cheque is duly presented and subsequently honoured, the relevant date for payment is the date of presentation and not the date of actual realisation. The delay in clearance, by itself, does not alter the character of the payment. On the facts, the cheque was not dishonoured, and the Revenue did not show any basis to disregard the earlier decision relied upon by the Commissioner (Appeals). In these circumstances, the foundation for imposing penalty was absent.

Conclusion: The cheque was to be treated as payment on the date it was presented, and the penalty was not sustainable. The Revenue appeal was rejected.

Final Conclusion: The order in favour of the assessee was maintained, and the Revenue failed in the challenge to the treatment of cheque payment and the consequential penalty.

Ratio Decidendi: Where a cheque tendered towards duty is honoured and not dishonoured, payment is treated as made on the date of presentation of the cheque, and mere delay in encashment does not justify penalty.

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