Mandatory excise duty payment rules: cheque deposit was ineffective until credit reached the Government account, and forfeiture followed.

Rule 8(1) of the Central Excise Rules, 2001 requires duty to be credited to the Government account by the due date, and the explanation was treated as clarifying the mandatory time and mode of discharge. Payment by depositing cheques with the authorised bank before the due date did not amount to payment for this purpose because the statutory scheme made credit to the Government account the operative event. On that basis, default arose under Rule 8(4), and forfeiture of the fortnightly payment facility was upheld. The Court applied the settled distinction between mandatory and directory provisions and held that the special excise payment rule prevailed over the general principle relating to cheque payments.

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Issues: Whether payment of excise duty by depositing cheques with the authorised bank before the due date constituted payment for purposes of Rule 8(1) of the Central Excise Rules, 2001, and whether default in credit of duty to the Government account by the due date attracted forfeiture of the fortnightly payment facility under Rule 8(4).

Analysis: Rule 8(1) read with the explanation provided that duty liability stood discharged only when the amount payable was credited to the account of the Central Government by the specified date. The Court held that the explanation clarified the mode and time of discharge of duty liability and could not be treated as a mere directory aid. Applying settled principles on mandatory and directory provisions, it held that where a statute prescribes a particular act to be done by a specified time and attaches a consequence for non-compliance, the provision is mandatory. The general principle that payment by cheque may relate back to the date of delivery could not override the special statutory scheme governing excise duty payment under Rule 8.

Conclusion: The date of cheque deposit did not amount to payment of duty for the purpose of Rule 8(1), the defaults were rightly treated as defaults under Rule 8(4), and the forfeiture of the instalment facility was upheld in favour of the Revenue.

Ratio Decidendi: Where a fiscal rule expressly provides that duty is discharged only on credit to the Government account by the due date and prescribes a consequence for default, the requirement is mandatory and payment by cheque is effective only on such credit, not on the date of deposit.

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