Central excise rules, 2002

This query is : Resolved

Dhaval (Querist)
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05 August 2011 Does rule 4 & 8 of above rules override each other? As one says no goods should be removed without payment of duty and the other says that duty of the goods sold during the month should be paid in the next month?Please specify how to interprete this?

U S Sharma

U S Sharma (Expert)
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08 August 2011 No

both rules are independent and does not over ride.

if the assesee has balance in his credit or PLA then the duty liability is discharged on clearances itself,

if the assessee has to pay the duty in cash then also the duty liablity is discharged on the date of clearance, only the debit balance is paid by next month 5th.

such as

if the assesee has 6000/- balance in his hand and cleares goods involving duty 7500 during the month, then 6000 get auto adjusted and 1500 get debit balance in his duty account on the date of clearance, which is to be paid by 5th of next month.

for PLA balances 5th of next month should be considred good for the current month, except march where 31st is the date of payment.

Dhaval

Dhaval (Querist)
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09 August 2011 Thank you for reply.I also want to know if assessee fails to pay debit balance by 5th of next month (or late payment) then what are the consequences?

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S.P.Mahanta

S.P.Mahanta (Expert)
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12 August 2011 Under Rule 4 of CEx: rule'2002, no excisable goods are to be removed from place of removal without duty payment, & duty payment shall be as per rule 8 of CER'2002.In case of manual payment, on or before 5th & in case of electronic payment on or before 6th of subsequent month of removal.
Hence, both rule do not override other but are complimentary.
Now coming to second part, if assessee fails to pay duty liability on or before 5th or 6th of subsequent month, shall have to pay interest on total duty @ 18% from the date on which it was due till date of actual payment.