Cheque payment date for excise duty is the date of presentation, not bank realisation; withdrawal of facility was quashed.

Where duty was paid by cheque presented on or before the due date, the date of receipt or presentation by the authorised bank was treated as the date of payment, not the later date of realisation. On that basis, three fortnights could not be counted as defaults under the Central Excise Rules, and only two defaults remained, which was insufficient to justify withdrawal of the fortnightly payment facility. The impugned withdrawal order was therefore quashed, while any alleged subsequent defaults were left open.

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Issues: Whether the date of receipt of the cheque by the authorised bank constitutes the date of payment of duty for the purpose of counting defaults under Rule 49 read with Rule 173(G) of the Central Excise Rules, and whether the withdrawal of the fortnightly payment facility was valid.

Analysis: The Court held that where cheques were presented on or before the due dates, the date of presentation/receipt had to be treated as the date of payment, and not the later date of realisation. On that basis, the payments relating to three fortnights could not be treated as defaults. Excluding those periods, only two defaults remained, which was insufficient to attract the power of withdrawal of the facility under the applicable rules. The Court did not examine any alleged subsequent defaults and kept that question open.

Conclusion: The impugned order withdrawing the facility was unsustainable and was quashed.

Ratio Decidendi: For the purpose of statutory duty payment by cheque, payment is effected on the date the cheque is received or presented within time, and not on the later date when it is realised by the bank.

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