1. Manner of payment of duty.
1.1 Rule 8 of the said Rules provides that duty relating to removals during a month can be discharged within five days of the following month. In case of a manufacturer availing an exemption based on value of clearances during a financial year, the duty for a month may be discharged by fifteenth day of the succeeding month except that for month of March, the duty has to be discharged by 31st March in both the circumstances.
If the assessee fails to pay the amount of duty by the due date, he shall be liable to pay the outstanding amount along with an interest @ 2% per month or Rs.1000/- per day, whichever is higher, for the period starting with the first day after due date till the date of actual payment of the outstanding amount:
However, the total amount of interest payable shall not exceed the amount of duty which has not been paid by due date.
Where such duty and interest are not paid within a period of one month from the due date, the consequences and the penalties as provided in Rule 8 shall follow.
After the completion of one month, the amount of duty outstanding and the interest payable thereon will be treated as ‘recoverable arrears of revenue’ and all permissible action under the law including the action under Sec.11 of the Central Excise Act, 1944 and under Sec.142 of the Customs Act, 1962 shall be taken.
On the issue of availment of credit by the user-manufacturer, action against the consignee to reverse /recover the CENVAT credit availed of in such cases need not be resorted to as long as the bonafide nature of the consignee’s transactions is not in dispute.
In order to ensure proper monitoring of such recoveries and taking up time bound action against the defaulters, Range Supdts. should be asked to maintain a separate register and identify and record the cases of default, immediately on receipt of E.R.-1/E.R.-2/E.R.-3 returns. The Divisional Deputy/Assistant Commissioner should check the registers regularly minimum once in two months period.
(Circular NO. 766/82/2003 -CX, Dated 15.12.2003)
1.2 National Calamity Contingent Duty (NCCD) on Crude Petroleum Oil should be charged only on the total quantity of Crude Petroleum Oil produced and supplied from the oil field to the refineries.
(Circular No. 769/2/2003-CX. Dated 09.01.2004)
1.3 The duty can be discharged by debiting an account current (also referred to as Personal Ledger _Account –[PLA] ) -and debiting the CENVAT Credit Account maintained by the assessee under the provisions of CENVAT Credit Rules, 2002.
1.4 No format for CENVAT Credit Account has been specified. The assessee has to maintain this account in his own format. This account is a credit-debit account wherein the admissible credit in respect of inputs and capital goods received by the assessee in his factory is taken and debit is made for payment of any duty.
1.5 In account current [Personal Ledger Account], credit is taken by depositing money in the banks on T.R.6 Challans. The guidelines regarding account current are mentioned in subsequent paragraphs.
2. Account current and procedures relating thereto
2.1 Omitted (Circular No.662/53/2002-Cx. Dated 17.9.2002. Common no. for registration adopted, no need of ECC no. now.)
2.2 The manufacturer working under the procedure shall maintain an account current (Personal Ledger Account) in the Form specified in Annexure¬6.
2.3 Each credit and debit entry should be made on separate lines and assigned a running serial number for the financial year.
2.4 The account current must be prepared in triplicate by writing with indelible pencil and using double-sided carbon – original and duplicate copies of the account current should be detached by the manufacturers and sent to the Central Excise Officer in charge along with the monthly/quarterly periodical return in form E.R.-1/E.R.-2/E.R.-3.
3. Credit and debit in account current
3.1 The assessee may make credit in the account current by making cash payment into the Treasury/or Authorised Bank. If allowed by the Commissioner, In exceptional cases, such as sudden strike in bank, natural calamity, riot etc., the credit can be taken after sending by Registered A.D. post or by a messenger a cheque for the requisite amount to the Chief Accounts Officer of the Commissionerate, provided procedure specified in this regard are followed.
3.2 Deposit into the Treasury of the authorised bank should be made in a Challan in form TR 6 under the correct Head of Account. The Assessee’s Registration number No. should also be indicated in the challans. A copy of each Treasury Challan bearing Treasury/Bank seal and the signature of the authorised officer of the Treasury/Bank which is received back from the Treasury/Bank in token of having made the deposit, should be sent by the assessee to the Central Excise Office along with the monthly periodical return in E.R.1/E.R.2/E-R.3
3.3 There is an `Explanation’ to sub-rule (1) of rule 8 that the duty liability shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the specified date. It is being interpreted that it refers to deposit of duty amount by the focal point banks into the account of Government. This is not the intention. Once the assessee has deposited a cheque in the bank designated by the Central Board of Excise and Customs, the date of presentation of the cheque shall be deemed to I be the date on which the duty has been paid subject to realisation of the cheque.
3.4 No restriction exists with regard to any minimum amount, which should necessarily remain in balance to the credit of an assessee in his PLA. With the monthly payment system, there should be enough credit at the time of payment of duty for the month.
3.5 Mutilations or erasures of entries once made in the PLA are not allowed. If any correction becomes necessary, the original entry should be neatly scored out and attested by the assessee or his authorised agent.
4. Payment of rents, fines or penalties
4.1 In case where miscellaneous dues like rents, fines or penalties are to be paid by the holder of account current he may be advised to make payments of such accounts directly into the authorised bank under Challan in form T R 6 supported by order of demand, if any. Such challans need not be counter-signed by the Departmental Officer but should indicate the particulars of penalties, rent etc, deposited. If, however, the account holder desires that such miscellaneous dues should also be paid through an account current, he may be permitted to open a separate account current for this purpose under the group minor head “E-Miscellaneous-1 Miscellaneous”.
5. Account Code Directory
5.1 Regarding the Account Code Directory for the purpose of computerisation, separate instructions have been issued by the Principal Chief Controller of Accounts C.I3 E.C,, which may be referred to
6. Procedure for deposit of Central Excise duties during bank strikes, natural calamities etc.,
6.1 This procedure is to be followed only when all the banks nominated to collect revenues within a Commissionerate are unable to transact business, due to strike of banks or sudden closure of banks due to riots, imposition of curfew or natural calamities such as flood, cyclones, etc.
6.2 Normally in all cases of closure of bank business due to strike by bank employees, the Public gets advance intimation either through the press, or otherwise. In all such cases, the assessees should make advance arrangements to deposit money into the banks and keep sufficient amounts in their account current [PLA] so that they do not face any difficulty in the clearance of the goods during the period of the strike.
6.3 In cases, where the strike of bank employees is without notice, or where the strike called for after due notice is prolonged beyond a reasonable time (say over 3-4 days) or where there is sudden closure of banks due to riots, imposition of curfew or natural calamities such as flood, cyclones, etc., the Commissioner may adopt the procedure specified hereinafter in partial relaxation of the provisions contained in the “Manual for collection of Revenue and payment of refunds etc.(hereinafter referred to as `Manual’)” only for the duration of the strike or the sudden closures: –
6.4 The Commissioners should issue a Trade Notice stating that during the days of the closure of bank business due to such strikes (specifying the dates wherever possible), the assessees can send their cheques by registered post, acknowledgement due (R.P.A.D.) or special messenger, with the TR-6 challans (in quadruplicate) duly filled in, to the Chief Accounts Officers of the Commissionerates, with a clear declaration that they have sufficient balance in their bank account.
(i) They should be advised to send a copy of the letter forwarding • the cheque, to the concerned Range Officer also.
(ii) On the strength of a cheque so sent, they may take credit in the account current.
(iii) On receipt of the cheque in his office, the Chief Accounts Officer will immediately intimate the concerned Range Officer about the name of the assessee, the number and date of the cheque and its amount.
(iv) Immediately after the strike is over, all such cheques should be deposited by the Chief Accounts Officer into the Focal Point Bank/State Bank of India at the Headquarters or Reserve Bank of India, as the case may be, through TR-6 challans (in quadruplicate) according to the procedure prescribed in the Manual.
(v) The Chief Accounts Officer will send the Duplicate/Triplicate copies of the receipted challans to the assessees and the quadruplicate copy to the R.Os. concerned to enable them to exercise necessary checks and prepare the monthly statement of revenue.
(vi) Bank commission or collection charges, if any, chargeable by the banks should be debited in the account current of the assessees by the Chief Accounts Officer under intimation to them as also the R.Os.
(vii) If any of the cheques sent by the assessees are dishonoured, the Commissioners shall take appropriate penal action as prescribed under the rules.
(viii) The Chief Accounts Officer should maintain a suitable record in regard to receipt and disposal of such cheques.
7. Payment by cheque when not permitted
For removal of doubts and to ensure uniformity of application of the procedure it is clarified that the payment of duty/other dues through cheques should not be permitted in the following cases: –
(i) If there is a strike in or closures of only one nominated bank of the Commissionerate and the assessee still remains in a position to deposit money in the other nominated banks or Departmental Treasury (wherever they exist) – unless the assessees’ bank is the only nominated bank in the Commissionerate.
(ii) In the case of declared Bank holidays because such holidays are known well in advance.
(iii) Where the Public has been given advance intimation of a strike, unless the strike is unduly prolonged (say over 3-4 days).
(iv) Where Bank employees adopt “go-slow” tactics.