M/S. JAYASWAL NECO LTD. versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR

Citation: [2015] 9 S.C.R. 360 · Decided: 06-08-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2015] 9 S.C.R. 360 
A 
MIS. JAYASWALNECO LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, RAIPUR 
(CivilAppeal No.1468 of2004) 
B 
AUGUST 06, 2015 
[A.K. SIKRI AND N.V. RAMANA, JJ.] 
Central Excise Rules, 1944 - r. 173G(1)(e) - Dues of 
excise duty- Late deposit- Demand of interest - On facts, 
C non-payment of excise duty on time by assessee- Order by 
the Revenue suspending the facility of clearing goods of 
paying the duty every fortnight and direction to the assessee 
to make the payment of duty on consignment basis for a 
0 
period of two months - Thereafter, assessee while making 
payment of excise duty utilized the Cenvat Credit - On 
objection by the authorities that assessee could not have 
utilized the credit from the account, assessee paid the amount 
in cash -As a result imposition of 24% interest p.a. for the 
E belated payment - Challenge to - Utilization of Cenvat 
Credit during the said period of two months when facility for 
payment of duty fortnightly u/r. 173G was suspended, if 
permissible - Tribunal held that payment of duty by debiting 
the Cenvat Credit was not permissible during the said period 
F of two months, thus, amounted to non-payment of duty and 
interest was to be paid till the date duty was actually paid 
through cash - On appeal, held: Even when the facility is 
withdrawn for making payment in instalments, the excise duty 
can be paid through Cenvat Credit- Thus, the order passed 
G by the tribunal set aside. 
Allowing the appeals, the Court 
HELD: 1.1 The tribunal was not correct in observing 
H 
360 
JAYASWALNECO LTD. v. COMMNR. OF CENTRAL 
361 
EXCISE, RAIPUR 
that merely because the appellant paid the said portion A 
of duty subsequently in cash, it had accepted the legal 
position that payment of duty through Cenvat Credit 
Account was not permissible under the provisions of 
Rule 173G(1)(e) of the Central Excise Rules, 1944. There 
is no estoppel against law. Merely because the appellant 
had yielded to the demand of the Revenue to pay that 
portion of duty also in cash, would not mean that the 
appellant was precluded from taking a stand that such 
mode of payment through Cenvat Credit Account even 
during the period when facility of payment of duty by C 
instalments had been withdrawn for two months, was 
permissible. It had taken a specific defence in this behalf 
and, therefore, the tribunal was required to examine the 
matter in.the light of the said Rule. [Para 13] [371-C-F] 
B. 
D 
1.2 Rule 173G(1) enables the authorities to forfeit the 
facility to pay the dues in instalments for a period of two 
months in case the assessee commits default of the 
nature specified therein. Thus, the main purport of this 
Rule is to withdraw the facility of payment of dues in E 
instalments and calling upon the assessee to pay the 
duty during the said period on clearing each 
consignment, i.e., on everyday basis. In sub-para (b) of 
Rule 173G, a duty has been ~ast on the manufacturer to F 
maintain an account current with the Commissioner for 
the purpose of discharging his duty liability by debiting 
such account current. This sub-rule also provides that 
duty can be discharged by utilising Cenvat Credit in the 
manner mentioned in the said sub-rule. Thus, insofar as G 
mode of payment is concerned, it can be through 
account current or by utilising Cenvat Credit. Both the 
methods are permissible. The mode of payment of duty 
through Cenvat Credit is as good as making payment 
through account current. even during the period when H 
362 
SUPREME COURT REPORTS 
[2015] 9 S.C.R. 
A the facility of payment of excise duty in inst~lments on 
fortnightly basis is not available and remains suspended 
for a period of two years, the only obligation for the 
assessee is to pay the duty on each clearance and not 
on deferred basis. At the same time, insofar as manner 
B of duty is concerned, it can be either through account 
currentorCenvatCredit. [Paras 14, 17, 18] [372-F-G; 373-
H; 374-A-C; 375-C, D] 
1.3 In clause (e) of Rule 173G(1) the words "during 
C this period the manufacturer shall be required to pay 
excise duty for each consignment by debit to the account 
current referred to in Clause (b) ... ".It is on the basis of 
this language used in Clause (e), the submission that 
the only mode or manner of payment of duty during this 
D period was through account current, cannot be 
accepted, in the absence of specific prohibition 
contained in the said sub-rule (e) coupled with the fact 
that the 

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