2006 (7) TMI 196 - AT - Central Excise

Bank clearance date determines duty payment date, Tribunal rules against Commissioner, upholds legal precedents

GA DANIELI INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, KOLKATA-VI

The Tribunal held that the clearance of cheques by the bank should be considered the date of payment of duty, overturning the Commissioner's decision. The ... Whether date of presentation of cheques in the Bank towards payment of duty is the relevant date or the date when the cheques are cleared from bank should be taken as the date on which the duty is discharged - held that Commissioner in impugned order is not justified in holding that the clearance of the cheques by the Bank should be the date of payment of duty - held that deposit of cheques towards payment of duty, if not dishonoured later, satisfies the requirement of payment of duty Issues:1. Determination of relevant date for payment of duty - date of presentation of cheques or date of clearance from the bank.2. Adjudicating authority's disagreement with a judgment of the Hon'ble High Court of Hyderabad.Analysis:Issue 1: Determination of relevant date for payment of dutyThe central question in this case revolved around whether the date of presentation of cheques in the bank towards payment of duty should be considered as the relevant date or if the date when the cheques are cleared from the bank should be deemed as the date on which the duty is discharged. The Commissioner, in the impugned order, held that the clearance of cheques by the bank should be considered the date of payment of duty. The appellants had presented the cheques on time, but the Commissioner found them guilty of defaulting in the discharge of Central Excise duty for the relevant period. He imposed a personal penalty of Rs. 2 lakhs along with confirmation of interest. However, the Tribunal, after considering the judgment of the Hon'ble High Court of Hyderabad and the decision of the Larger Bench in another case, held that the deposit of cheques towards payment of duty, which were not dishonored later, satisfied the requirement of payment of duty. As the issue had been previously decided by the Larger Bench, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants.Issue 2: Adjudicating authority's disagreement with a judgment of the Hon'ble High CourtThe Tribunal expressed disapproval of the adjudicating authority's conduct in disagreeing with the judgment of the Hon'ble High Court of Hyderabad. The Commissioner had disregarded the High Court's decision, stating personal reasons for his disagreement without any distinction in facts or legal points. The Tribunal emphasized that judicial discipline required the Commissioner to follow the High Court's decision and apply it to the case at hand. The Commissioner's failure to do so was deemed contrary to judicial principles. The Tribunal highlighted that the Commissioner's disagreement with the High Court's decision was not a valid reason to deviate from the established legal precedent, especially when the issue had already been settled by the Larger Bench of the Tribunal.In conclusion, the Tribunal's judgment clarified the relevant date for payment of duty concerning the presentation and clearance of cheques. It also underscored the importance of adhering to established legal precedents and maintaining judicial discipline in decision-making processes.