Forfeiture of fortnightly duty payment facility bars use of Cenvat credit; duty must be paid through PLA during default.

Where the assessee defaulted in payment of duty and forfeited the fortnightly payment facility, duty for the default period had to be paid only through account current (PLA) under Rule 49 read with Rule 173G of the Central Excise Rules, and discharge through Cenvat credit was not permitted. The demand was therefore upheld, and no further interference was found necessary with the reduced penalty.

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Issues: Whether, after forfeiture of the fortnightly duty payment facility for default, the assessee could discharge duty through Cenvat credit instead of account current and whether the penalty required interference.

Analysis: The appellant had defaulted in payment of duty on due dates, whereupon the fortnightly payment facility stood forfeited for the relevant period. On a construction of Rule 49 read with Rule 173G of the Central Excise Rules, the duty during the period of default had to be paid only through account current, meaning the PLA, and not through Cenvat credit. The order also noted that the penalty had already been reduced by the appellate authority and found no reason to interfere further.

Conclusion: The duty demand and the penalty were upheld, and the assessee's plea to use Cenvat credit during the period of forfeiture was rejected.

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