Duty payment during forfeiture of fortnightly facility must be consignment-wise; penalty restored for non-compliance.

When the fortnightly duty payment facility stood suspended, an assessee was required to pay duty consignment-wise and could not avoid the consequence of non-compliance by relying on deemed credit or other available credit. The record showed contravention of the rule governing duty payment during forfeiture of the scheme, although the duty for the clearances had already been discharged through deemed credit and PLA. On that footing, the demand could not survive beyond the amount already paid, but the penalty imposed by the original authority was correctly restored.

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Issues: Whether an assessee, after forfeiture of the fortnightly payment facility, could still utilise deemed credit or other available credit for duty payment, and whether penalty imposed for failure to pay duty consignment-wise was liable to be restored.

Analysis: The respondents had not discharged duty consignment-wise during the period when the facility of fortnightly payment stood suspended. The decision relied upon by the respondents only supported the position that duty could be discharged from PLA or Cenvat credit during the relevant period; it did not erase the consequence of non-compliance with the requirement to pay duty on each consignment when the facility was withdrawn. The record showed contravention of the relevant rule governing payment of duty during forfeiture of the fortnightly scheme, while the duty liability for the clearances had already been met through deemed credit and PLA.

Conclusion: The demand did not survive beyond the amount already paid, but the penalty imposed by the original authority was rightly restored.

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