Delayed duty payment defeats Cenvat credit benefit until liability is regularised, while penalty and interest are sustained.

Delayed payment of duty disentitled the assessee from using corresponding Cenvat credit for the relevant period, so the duty had to be discharged in cash until the liability was regularised. The Tribunal sustained the Revenue's demand on the substantive duty liability, upheld the penalty, and indicated that interest would follow. It also granted limited consequential relief by directing restoration of any Cenvat credit, if reversed or paid, once the deposit particulars were verified.

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Issues: Whether, on failure to pay duty by the due date, the assessee was liable to pay the duty in cash, suffer penalty, and forfeit the benefit of Cenvat credit until compliance.

Analysis: The delayed payment of duty led to denial of the benefit of setting off duty liability through Cenvat credit for the relevant period. The duty element was therefore required to be paid in cash, and the Tribunal accepted the Revenue's position on the substantive liability. At the same time, it directed that if the assessee had reversed or paid the duty amount and the deposit particulars were verified, the corresponding Cenvat credit, if any, should be restored to the assessee's account. The Tribunal also sustained the penalty and indicated that interest would follow.

Conclusion: The assessee was held liable for the duty demand and penalty, with conditional restoration of Cenvat credit upon verification of payment or reversal.

Final Conclusion: The appeal was disposed of by sustaining the Revenue's demand substantially, while granting limited consequential relief regarding restoration of credit on verification.

Ratio Decidendi: Failure to pay duty by the prescribed date disentitles the assessee from availing the corresponding Cenvat credit benefit until the duty liability is regularised.

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