Circular No. 28/ 2002/Cus
24th May, 2002

F.No.494/23/2000-Cus VI
Government of India
Ministry of Finance
Department of Revenue

Sub:- Effective date of payment of Government dues by cheque-regarding.

 I am directed to invite your attention to a case on the above mentioned subject in which the Assistant Commissioner, IATT, Air Cargo ,Complex, Delhi vide Order-in-Original No.9/98 dated 7.9.98 had imposed penalty of Rs. one crore on M/s Sahara Airlines and ordered realisation of interest of Rs 42,258/- from them for delayed deposit of IATT by cheque, since it was realized after the due date of payment. The Commissioner of Customs (Appeals) , vide Order, dated 7/4/99, upheld the Order-in-Original passed by the Assistant Commissioner .

2.Against the Order-in-Appeal, M/s. Sahara Airlines Ltd. had filed a Revision Application before the Joint Secretary (Revision Application) who vide Order dated 24.11.99, set aside the orders of the lower authorities on the ground that the party had tendered a cheque within the due date, and therefore, it may be taken that the party has deposited the dues within the stipulated time. The Joint Secretary ( Revision Application) had relied upon rules 6 and 7 of the Central Government Account (Receipt and Payments) Rules, 1983, and rules 79 and 80 of the Central Treasury Rules which stipulate that if a cheque is honoured on presentation, the date of payment shall be deemed to be date on which the cheque was tendered to the bank.

3.The matter has been examined in consultation with the Controller General of Accounts(CGA). It has been stated by the CGA that after departmentalisation of accounts , in terms of rule 1-A, CTRs are applicable to only a few categories of transactions, such as: (a) Union Territories of Chandigarh, Lakshadweep , Dadra and Nagar Havelli; (b) Payments of pensionary benefits to the Government pensioners in the Central Government & Union Territories and (c) an office authorised to hold and operate on a Departmental Treasure Chest. Most of the remaining transactions of the Union Government ( including collection of tax revenue) are governed by CGA( R& P) Rules, which came into effect from 1st June ,1983. The CGA has, as such, clarified that collection of tax revenues is governed by Central Government Accounts (Receipt & Payment) Rules ,1983, and as per the rule 20 of the same , government dues shall be deemed to have been paid in the case of cheques and drafts tendered to the bank on the date on which it is cleared and entered into the receipts scroll. In other words, the date of payment shall be the date on which cheque is cleared/realized by the bank.

4. The above instructions may be brought to the notice of all concerned . Difficulties, if any, in the implementation of above instructions may be brought to the notice of the Board.

5.Kindly acknowledge receipt of this Circular.

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