ORDER
S.L. Peeran, Member (J)
1. By this appeal, the appellants have challenged the Order-in-Appeal No. 34/2004-C.E., dated 20-2-2004. The appellants were working under Rule 173G(1)(e) of the Central Excise Rules by which they were required to have paid the duty fortnightly. This benefit of fortnightly payment was withdrawn by a letter issued by the Superintendent of Central Excise dated 6-11-2000. This was challenged on the ground that only a proper officer i.e. the Assistant/Deputy Commissioner is required to withdraw the facility and the Superintendent of Central Excise has no powers to withdraw the same and direct them to deposit the duty on consignment basis. Their plea has not been accepted. The learned Counsel submits that the demands are also time barred as it would have resulted in revenue neutrality and in this regard refers to the Supreme Court judgment rendered in the case of T.N. Dadha Pharmaceuticals v. Collector of C.Ex., Madras – 2003 (152) E.L.T. 251 (S.C.) and the following three judgments :
(a) Nityanand Nirmal v. CCE -1999 (109) E.L.T. 522
(b) CCE v. Mahavir Spinning Mills Ltd. – 2001 (130) E.L.T. 65
(c) U.P. State Sugar Corporation Ltd. v. CCE -1999 (108) E.L.T. 423
2. The learned Counsel submits that on this very issue, the Punjab & Haryana High Court, in the case of Krishna Engineering Works Ltd. v. UOI – 2001 (134) E.L.T. 14 (P & H), has set aside the order of withdrawal of the facility issued by a letter by a Superintendent in an identical facts of the case and the Court held it to be an act in violation of Principles of Natural justice. It has been held that the appellants are entitled for a show cause notice and only a proper officer is required to pass the order. He further points out that all these judgments were considered by this very Bench in the case of M/s. Parkins Textiles (P) Ltd. v. CCE by Final Order No. 1631/2004, dated 19-10-2004 [2005 (179) E.L.T. 406 (T)] and the Bench, by respectfully following the ratio of the Punjab & Haryana High Court in the case of Krishna Engineering Works Ltd. v. UOI and that of the Supreme Court judgment rendered in the case of T.N. Dadha Pharmaceuticals v. Collector of C. Ex., Madras has upheld the assessees’ contention by setting aside the order canceling the benefit of fortnightly payment of duty. He produced a copy of the order.
3. The learned JDR distinguishes both these judgments and submits that the issue may be referred to Larger Bench as it has serious revenue implication.
4. On a careful consideration, I do not find this to be a case for reference to a Larger Bench as in identical facts of the case, the Punjab & Haryana High Court in the case of Krishna Engineering Works Ltd. v. UOI (supra) has held that the Superintendent does not have the powers to withdraw the fortnightly benefit of payment in terms of Rule 173 G(1)(e) and held it to be violative of Principles of Natural justice. The Tribunal, in the case of M/s. Parkins Textiles (P) Ltd. v. CCE, by Final Order No. 1631/2004, dated 19-10-2004, has applied the ratio of the Punjab & Haryana High Court in the case of Krishna Engineering Works (supra) and that of the Apex Court judgment in the case of T.N. Dadha Pharmaceuticals v. Collector of C.Ex., Madras (supra) and has allowed the appeal. The findings recorded in para 4 are reproduced herein below :
“4. On a careful consideration, we find lot of force in the submission made by the appellants in the present case. In terms of Rule 173G(1)(e), the facility for fortnightly payment can be withdrawn and the facility be forfeited on an order being passed by the proper officer. The proper officer, in terms of the above noted Board’s Circular is, the Assistant/Deputy Commissioner. In the present case, the appellants were not issued with the Show Cause Notice calling upon them to explain as to why the facility should not be forfeited and it is the Superintendent of Central Excise, Putter Range who has informed them about the suspension of the facility. Such action is not in terms of Rule 173G(1)(e) of the Rules. The Hon’ble Punjab & Haryana High Court in the case of Krishna Engineering Works Ltd. v. UOI (supra) has clearly held in an identical circumstance that withdrawal of facility due to default in payment without an order passed by a proper officer viz., the Deputy Commissioner is violative of Principles of Natural justice and on that ground, after due analysis of the provisions of law and in the light of the noted judgments therein, has set aside such an action. We find that this judgment of the Punjab & Haryana High Court applies on all fours to the present case and hence the impugned order is liable to be set aside. Furthermore, we notice that the appellants had deposited duty through PLA and had availed Cenvat credit. Even if they had paid the amounts on consignment basis, they would have been eligible for the benefit of Modvat credit. It would have been led to Revenue neutrality and, therefore, in terms of the Apex Court judgment rendered in the case of T.N. Dadha Pharmaceuticals v. CCE, Madras (supra), the appellants cannot be alleged to have held an intention to evade duty. The demands are also barred by time. The appellants succeed in this appeal and the same is allowed with consequential relief if any.”
5. I find that the rulings rendered in the case of M/s. Parkins Textiles (P) Ltd. is in all fours and is required to be followed in terms of judicial discipline. Therefore, respectfully following the ratio of the Tribunal’s rulings in the case of M/s. Parkins Textiles (P) Ltd., the impugned order is set aside and the appeal is allowed.