JUDGMENT [ENTITY], J.
1. The source of this petition is the order dated 28th August, 2002 passed by the Deputy Commissioner of Central Excise, Pune VII Division, Pune, forfeiting the facility of making payment of excise duty on fortnightly basis, in exercise of powers conferred on him under [SECTION] of the [ACT] (the '[ACT]' for short), framed under [ACT] (the '[ACT]' for short).
THE FACTS :
2. The facts giving rise to the present petition are in a narrow compass. They are; The petitioners are the public limited Company engaged in business of manufacturing steel and Alloys with other allied products which attract payment of excise duty under the provisions of the [ACT].
3. The petitioners were enjoying facility of payment of excise duty payable by them on their products on, fortnightly basis under [SECTION] of the [ACT], which respondent No. 2 has forfeited by his impugned order dated 28th August 2002 passed in exercise of powers under [SECTION] of the said Rules, alleging breach thereof by the petitioners. STATUTORY PROVISIONS :
Before proceeding further it may be proper to notice relevant rule, to appreciate the issues involved.
Relevant [SECTION] of the said Rules reads as under : [SECTION]. Manner of Payment :
(1) The duty on the goods removed from the factory or the warehouse during the first fortnight of the month shall be paid by the 20th of that month and the duty on the goods removed from the factory or the warehouse during the second fortnight of the month shall be paid by the 5th of the following month:
Provided that in the case of goods removed during the second fortnight of the month of March, the duty shall be paid by the 31st day of March:
Provided further that where an assessee is availing of the exemption under a notification based on the value of clearance in a financial year, the duty on goods cleared during a calendar month shall be paid by the 15th day of the following month.
Explanation For removal of doubts, it is hereby clarified 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.
(4) If the assessee defaults -
(i) (ii) in payment of instalment by the due date for the third time in a financial year, whether in succession or otherwise.
then, the assessee shall forfeit the facility to pay the dues in instalments under this rule for a period of two months, starting from the date of commencement of the order passed by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in this regard or till such date on which all dues are paid, whichever is later, and during this period the assessee shall be required to pay excise duty for each consignment by debit to the account, current and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow."
4. The above provision lays down that if the assessee commits 3 defaults in one financial year, whether in succession or otherwise, then the assessee shall forfeit the facility to pay the dues in instalments for a period of two months starting from the date of communication of the order passed by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise as the case may be, in this regard, or till such date on which all dues are paid, whichever is later, and during this period the assessee shall be required to pay excise duty for each consignment by debit to the account current and in the event of failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow.
THE ISSUES :
5. Based on the above Rules, in the case at hand, firstly, what is required to be seen is whether the conditions required to be followed under [SECTION] of the above Rules have been followed by the petitioners and secondly, whether the above condition precedent required under [SECTION] of the Rules has been established by the respondent No. 2 on the date when impugned order was parsed holding that 3 defaults were committed by the petitioners.
UNDISPUTED DATA :
6. In order to appreciate the above questions, it is necessary to reproduce undisputed data on the basis of which action is sought to be challenged by the petitioners and the same is sought to be sustained by the Revenue.
Sr. No. Period Involved Due date Amount Due Date of actual payment Amount Paid No. of default.
1. 16-10-2001 to 30-10-2001 5-11-2001 15900000 15900000 +3031.89 Interest I
2. 1-1-2002 to 15-1-2002 20-1-2002 9000000 Interest not paid II
3. 1-3-2002 to 15-3-2002 20-3-2002 13300000 19-4-2002 vide TR6 ch. No. 1, 2 dated 18-4-2002 ch. No. 3,4,5,6 dated 19-4-2002 13300000 +196767 Interest III
7. Perusal of the aforesaid undisputed data would clearly show that in respect of excise duty payable on 16th October 2001 to 30th October 2001, the same was to be paid on the due date i.e. 5th November 2001. The petitioners could not make payment of the same by the due date and made a payment of the said dues on 4th December, 2001 along with interest @ 24% p.a. as stipulated in [SECTION] of the said Rules. This was the first default committed by the petitioners during the financial year 2001-2002, is not in dispute.
In respect of excise duty payable for the period 1st January 2002 to 15th January 2002, the same was required to be paid on due date falling on 20th January 2002, which was a Sunday; when the office of Bank of Maharashtra was shut. Payment was thus made by the petitioners on the following day i.e. on Monday, the 21st January 2002.
In respect of excise duty payable for the period 1st March 2002 to 15th March, 2002, the same was paid on due date i.e. on 20th March 2002. Petitioners could not make payment by the said date. The said payment was made on 19th April 2002 with interest @24% on the said amount as stipulated under [SECTION] of the Rules. According to the petitioners, admittedly this was a second default committed by them during the financial year 2001-2002.
8. The 3rd respondent treating the non-payment of excise duty on due date i.e. 20th January 2002 (Sunday) and payment thereof on the next following day i.e. on Monday, the 21st January 2002, as default, issued a show cause notice to the petitioners inter alia calling upon the petitioners to show cause as to why the facility to pay duty in instalments enjoyed by them under the rules should not be forfeited for a period of 2 months in exercise of powers given under the provision of [SECTION] of the said Rules. Thus action was based on the premise that the petitioners have contravened the provisions of the above rule; inasmuch the petitioners had defaulted thrice in payment of excise duty on due dates in the financial year 2001-2002.
9. On being served with the notice dated 14th May 2002, the petitioners by their reply-cum-letter dated 29th May, 2002, inter alia; submitted that payment of excise duty on 20th January 2002 could not be made it being a Sunday, a bank holiday. Consequently, payment thereof could only be made by them on the next working day i.e. on Monday, the 21st January, 2002, as such it cannot be said that there was a default in payment of excise duty on due date. In other words, there was no default in payment of duty as per [SECTION] of the Rules of 2001. At any rate, such payment did not constitute default in payment of excise duty on due date within the meaning of [SECTION] of the Rules, consequently, facility to pay duty on fortnightly instalments could not be forfeited under the said Rules of 2001. The petitioners had pressed into service [SECTION] of the [ACT] in support of their submission and prayed for grant of personal hearing before any decision is taken in the matter.
10. The 2nd respondent by notice dated 31st July 2002, called upon the petitioners to appear before it on 19th August, 2002 to make their oral submissions. On that day petitioners prayed for an adjournment on the ground that the representative who was conversant with facts of the case was going out of town. The request was thus made to hear the matter after 26th August 2002. However, the said request was turned down and impugned order dated 28th August 2002 came to be passed ex-parte by the 2nd respondent, rejecting the submission of the petitioners on the ground that the petitioners did commit 3 defaults in terms of [SECTION] of the said Rules during the financial year 2001- 02, which included default in making payment of duty for the period 1st January 2002 to 15th January 2002, which was due on 20th January 2002, which could not be paid on 20th January 2002 being a Sunday, though it was paid on the next working day i.e. 21st January 2002 (i.e. Monday). The aforesaid order dated 28th August 2002 passed by the 2nd respondent is the subject matter of challenge in this petition filed under [SECTION] of the [ACT]. THE ARGUMENTS :
11. Shri [ENTITY], learned Senior Counsel appearing for the petitioners took us through entire material on record and contended that the 2nd respondent failed to appreciate that the petitioners had defaulted only twice in payment of excise duty during the financial year 2001-2002 and not thrice as held by 2nd respondent in the impugned order. He contended that payment of excise duty on the next working day for the period 1st January 2002 to 15th January 2002 could not have been treated as a default as the petitioners could not have made payment on due date i.e. on 20th January 2002, it being a bank holiday though it was prescribed as due date for payment of excise duty. He further submitted that in terms of [SECTION] of the [ACT], petitioners made payment of excise duty on the next working day, previous day being a bank holiday, it was, therefore, not open for the respondent No. 2 to hold that the payment on 21st January 2002 was a default on the part of the petitioners.
12. Shri [ENTITY] brought to our notice the judgment of the Apex Court in the case of [PRECEDENT], wherein the Supreme Court ruled that the object of [SECTION] is to enable a person to do what he could have done on a holiday, on the next working day. Wherever, a period is prescribed by statute for the performance of an act in a Court or office, and the period expires on a holiday, then according to [SECTION] of the [ACT], the act should be considered to have been done within that period, if it is done on the next day on which the Court or office is open. For that; section to apply, all that is requisite is that there should be a period prescribed, and that period should expire on a holiday. In that judgment [SECTION] of the [ACT] was pressed into service while interpreting [SECTION] of the Rules framed under [ACT].
The Apex Court in the case of [PRECEDENT] also ruled that the rules framed under [SECTION] of the [ACT], though made by the State Governments, were rules made under a Central Act as such the provisions of the [ACT] were very much applicable to such rules. On the basis of this judgment, Shri [ENTITY] reiterated that respondent No. 2 could not have ignored sweep of [SECTION] of the [ACT] while interpreting [SECTION] of the [ACT]. He therefore, contended that the alleged second default cannot be said to be a default within the meaning of [SECTION] of the said Rules in the light of [SECTION] of the [ACT].
13. Shri [ENTITY] brought to our notice judgment of this Court in the case of [PRECEDENT] dated 26th November 2002 (unreported) wherein this Court had an occasion to interpret [SECTION] of the [ACT] and to hold that the requirement of payment of excise duty on due date is mandatory as such on the due date payment of duty must have been credited to the account of Revenue. The following were the observations made in that judgment :
"Thus, keeping in view the aforesaid judicially recognised principle in mind, if one turns to [SECTION] of the Rules of 2001, in general and [SECTION] followed by [SECTION], it would be clear that the non-compliance of the rule in question is made penal. It, therefore, has to be treated as mandatory. As such, the payment of duty ought to have been made by the petitioner either before the due date or on the date specified. In other words, payment ought to have been credited to the account of the Revenue at least by the due date."
Shri [ENTITY] in order to bring his case in tune with the above view taken by this Court, brought to our notice a certificate issued by the Bank of Maharashtra dated 12-12-2002; wherein the Bank has certified that the payment deposited by the petitioners vide their cheque No. 366234, drawn on the Bank of Maharashtra against TR6 [ENTITY] dated 21-1-2002 was credited to the account of the Central Government on the same day i.e. 21-1-2002, both accounts being in the same branch. According to Shri [ENTITY], this certificate having been issued by the Bank of Maharashtra, who are the Bankers of the Revenue as also that of the petitioners, is sufficient to demonstrate that the amount was actually credited to the account of the Central Government on the next working day i.e. on 21st January 2002, as such it cannot be said that there was a default in payment of excise duty for the period 1st January 2002 to 15th January 2002.
14. Per contra, Shri [ENTITY], learned Counsel for the respondent tried to support the impugned order. However, he could not take his submission to the logical end and found it difficult to counter the submissions advanced on behalf of the petitioners.
CONSIDERATION :
15. Having considered the well researched submissions advanced by Shri [ENTITY], the challenge to the order is based on the refusal on the part of the Deputy Commissioner of Central Excise to interpret [SECTION] of the Rules of 2001 in the light of the provisions of the [ACT] whose object is to state explicitly certain convenient rules for the construction and interpretation of Central Acts, and to guard against slips and oversights by importing into every Act certain common form clauses, which otherwise ought to be inserted expressly in every Central Act. Central Acts also include Regulations and Ordinances and statutory instruments made under Central Acts, Regulations and Ordinances. If one turns to the provisions of [ACT] and the interpretation assigned to legal phrases it is clear that [SECTION] of the [ACT] is not only applicable to Central Acts and Regulations but unless the context otherwise requires the same rule of construction is required to be applied to the statutory rules as held in the case of [PRECEDENT], . The two judgments of the Apex Court one in the case of [PRECEDENT]. in [PRECEDENT] (cited supra) in no uncertain ruled that the provisions of the [ACT] are very much applicable to the statutory rules.
16. If one turns to provisions of [SECTION] of the [ACT], it would be unequivocally clear that the section enables the person to do on the next working day what he could have done on as previous day, had it not been a holiday. We therefore, hold that time prescribed by statute for doing any act if expires on a holiday should be treated to have been done within period prescribed if done on the next working day. Consequently, payment of excise duty made by the petitioners on the next working day i.e. on Monday, the 21st January 2002 has to be treated to have been made on due date i.e. within the period prescribed as 20th January 2002 was a Sunday when office of the Bank of Maharashtra was closed and payment could not have been made on that day. In the above backdrop, the finding recorded by the 2nd respondent that the petitioners had committed 3 (three) defaults in payment of excise duty is misplaced and cannot be sustained in the eye of law.
17. It is also a well settled principle of law that the law does not compel a man to do that which he cannot possibly do and the said principle is well expressed in legal maxim "lex non cogit ad impossibilia" which is squarely attracted to the facts and circumstances of the present case. The unforeseen circumstances beyond the control of the petitioners if resulted in non-payment of excise duty, such circumstance cannot be construed to mean that it failed to pay the excise duty on the due date.
18. In the above view of the matter, payment of excise duty on 21st January 2002 has to be treated as payment made on the due date as per the rules applicable in this behalf. The impugned order is, therefore, set aside.
In the result, the petition is allowed. Rule is made absolute in terms prayer Clauses (a) and (b) with no order as to costs.