ORDER
Jeet Ram Kait, Member (T)
1. This appeal by the appellant-assessee is directed against Order-in-Appeal No. 81/2002 (M-I), dated 8-7-2002 by which the ld. Commissioner (Appeals) has upheld the order of the lower authority of demand of duty by debiting in the PLA and against the penalty of Rs. 30,000/- imposed under Rule 173Q.
2. Shri P. C. Anand, Chartered Accountant, appearing on behalf of the appellant-assessee argues that they are ready to pay the duty through the PLA but a direction be given to the department to permit them to take back the Mod-vat credit already debited in the account. He also requested for a further reduction in the penalty.
3. Heard ld. DR Shri A. Jayachandran, who submits that they have not made this plea before the original authority or before the appellate authority and seeking such a direction and taking plea of permitting them to take back the Modvat credit already debited is not proper.
4. I have considered the rival submissions and the impugned order. The appellant-company is engaged in the manufacture of casting falling under Chapters 73 and 84. They are availing the facility of paying duty on fortnightly basis under Rule 49 read with Rule 173G. The lower authority vide letter dated 27-2-2001 forfeited the above facility and directed to pay duty on the consignment-wise through account current, as they have defaulted earlier on four occasions in making the payments on due dates. On verification of accounts, it was observed that during the period 16-2-2001 to 15-4-2001, the appellant paid duty utilising Cenvat credit to the tune of Rs. 5,38,681/- instead of paying through account current in violation of Rule 49 read with Rule 173G. A perusal of Rule 49 would indicate that the manufacturer shall discharge the duty liability by debiting through account current only, if they have defaulted in discharging the full payment of duty on the due date on which full payment of any one instalment is discharged beyond a period of thirty days from the date on which the instalment was due in a financial year, whether in succession or otherwise, the duty has to be paid only through account current and such duty cannot be paid through Cenvat credit account. On harmonised reading of the word ‘account current’ mentioned both under Clause (b) and under Clause (e)(ii) and account current means PLA account only. In view of this legal position, the defaulter not only forfeits the facility of fortnightly payment for the period of 2 months but he is also forbidden from making payments through Cenvat credit during this period. Therefore the order passed by both the lower authorities is legal and proper. However to remove any doubt and the apprehension on the part of the assessee, the appellant will be allowed to re-credit the Modvat credit already debited, in case they are able to prove that the duty has been paid in cash or by debit in the PLA. As regards their plea of reduction in the penalty, ld. Commissioner (Appeals) has already reduced the penalty to Rs. 30,000/-, which I find is very reasonable and I do not think it proper to interfere with the order of duty and penalty passed by the Commissioner (Appeals). The impugned order is, therefore, sustained by rejecting the appeal filed by the appellant-assessee. Ordered accordingly-
5. The operative portion of the order was pronounced in Open Court on 26-9-2003