CHAPTER 3

ASSESSMENT, CLASSIFICATION, VALUATION, PROVISIONAL ASSESSMENT,
MANNER OF DUTY PAYMENT, ACCOUNT CURRENT, SCRUTINY

Part V

Manner of payment of duty and Account Current
1. Manner of payment of duty

1.1 Rule 8 of the said Rules provides that duty relating to removals during a fortnightof a month can be discharged within five days of the close of that fortnight, except thatin the last fortnight of the month of March, the duty has to be discharged by the last dayof the month. In case of a manufacturer availing an exemption based on value ofclearances during a financial year, the duty for a month may be discharged by fifteenthday of the succeeding month.

1.2 An assessee may also exercise the option of payment of duty consignment-wise.

1.3 There is no specific provision in the new Rules for clearance of goods withoutpayment of duty for storage outside the factory. However, considering that there maybe genuine difficulties for sugar industry i.e. sugar has season production , but its off takeis through out the year, and that large quantity of the off take (sale) sugar is controlledby government [levy sugar], the manufacturer may not be in a position to clear thegoods on payment of duty. Storage of such huge quantities within the factory will beburdensome. Accordingly, it has been decided to allow storage of non-duty paid sugaroutside the factory, under such bond and securities/sureties and such conditions andlimitations as the Commissioner may specify for a manufacturer on case to case basis.
(Note:- see Cir. No.610/01/2002-CX, dt. 01/01/2002)

1.4 The duty can be discharged by debiting an account current (also referred to asPersonal Ledger Account [PLA]) and debiting the CENVAT Credit Account maintainedby the assessee under the provisions of CENVAT Credit Rules, 2001.

1.5 No format for CENVAT Credit Account has been specified. The assessee has tomaintain this account in his own format. This account is a credit-debit account whereinthe admissible credit in respect of inputs and capital goods received by the assessee inhis factory is taken and debit is made for payment of any duty.

1.5 In account current [Personal Ledger Account], credit is taken by depositingmoney in the banks on T.R.6 Challans. The guidelines regarding account current arementioned in subsequent paragraphs.

2. Account current and procedures relating thereto

2.1 In order to open a new Personal Ledger Account, the manufacturer, quotinghis registration number, shall obtain the New Excise Control Code Number (New ECCNumber), which is a Permanent Account Number (PAN)-based number. OnceDepartment adopts ‘common number’ for registration and accounts, separate ECCnumber shall not be required.

2.2 The manufacturer working under the procedure shall maintain an accountcurrent (Personal Ledger Account) in the Form specified in (Annexure-8).

2.3 Each credit and debit entry should be made on separate lines and assigneda running serial number for the financial year.

2.4 The PLA must be prepared in triplicate by writing with indelible pencil andusing double-sided carbon - original and duplicate copies of the PLA should be detached by the manufacturers and sent to the Central Excise Officer incharge along with the monthly/quarterly periodical return in form E.R.1.

3. Credit and debit in account current

3.1 The assessee may make credit in the PLA by making cash payment into theTreasury/or Authorised Bank. If allowed by the Commissioner, In exceptional cases,such as sudden strike in bank, natural calamity, riot etc., after sending by RegisteredA.D. post or by a messenger a cheque for the requisite amount to the ChiefAccounts Officer of the Commissionerate, provided procedure specified in thisregard are followed.

3.2 Deposit into the Treasury of the authorised bank should be made in a Challanin form TR 6 under the correct Head of Account. The Assessee’s ECC No. shouldalso be indicated in the challans. A copy of each Treasury Challan bearingTreasury/Bank seal and the signature of the authorised officer of the Treasury/Bankwhich is received back from the Treasury/Bank in token of having made thedeposit, should be sent by the assessee to the Central Excise Office along with themonthly periodical return in form E.R.1/E.R.2.

3.3 There is an ‘Explanation’ to sub-rule (1) of rule 5 that the duty liability shall bedeemed to have been discharged only if the amount payable is credited to theaccount of the Central Government by the specified date. It is being interpretedthat it refers to deposit of duty amount by the focal point banks into the account ofGovernment. This is not the intention. Once the assessee has deposited a cheque inbank and the same is honoured or pays in cash/drafts and the bank gives receiptstamp on TR-6 Challans, the same shall be treated as ‘credited to the account of theCentral Government’.

3.4 No restriction exists with regard to any minimum amount, which shouldnecessarily remain in balance to the credit of an assessee in his PLA. With thefortnightly/monthly payment system, there should be enough credit at the time ofpayment of duty for the fortnight.

3.5 Where an assessee is required/chooses to pay duty consignment wise (for thereasons of defaults earlier):

(i) Duty on each clearance should be paid by the assessee bymaking debit entry in the PLA prior to the removal of the goodsoutside the factory premises or for being taken into use inside thefactory premises. If any goods are removed from the factory withoutsuch debit entry they will be treated as non-duty paid.

(ii) Duty on clearances of any excisable goods as samples in such smallquantities as the Commissioner may approve in respect of anycommodity may be paid on the last working day of the month bya single debit in the account current.

3.6 Mutilations or erasures of entries once made in the PLA are not allowed. Ifany correction becomes necessary, the original entry should be neatly scoredout 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 bepaid by the holder of account current he may be advised to make payments ofsuch accounts directly into the authorised bank under Challan in form T R 6supported by order of demand, if any. Such challans need not be counter-signedby the Departmental Officer but should indicate the particulars ofpenalties, rent etc, deposited. If, however, the account holder desires that suchmiscellaneous dues should also be paid through an account current, he may bepermitted to open a separate account current for this purpose under the groupminor 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 AccountsC.B.E.C., which may be referred to.

6. Procedure for deposit of Central Excise duties during bank strikes, naturalcalamities etc.,

6.1 This procedure is to be followed only when all the banks nominated to collectrevenues within a Commissionerate are unable to transact business, due to strike ofbanks or sudden closure of banks due to riots, imposition of curfew or naturalcalamities such as flood, cyclones, etc.

6.2 Normally in all cases of closure of bank business due to strike by bankemployees, the Public gets advance intimation either through the press, or otherwise.In all such cases, the assessees should make advance arrangements to depositmoney into the banks and keep sufficient amounts in their account current [PLA] sothat they do not face any difficulty in the clearance of the goods during the periodof the strike.

6.3 In cases, where the strike of bank employees is without notice, or where thestrike 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 ornatural calamities such as flood, cyclones, etc., the Commissioner may adopt theprocedure specified hereinafter in partial relaxation of the provisions contained inthe “Manual for collection of Revenue and payment of refunds etc.(hereinafterreferred to as ‘Manual’)” only for the duration of the strike or the sudden closures: -6.4The Commissioners should issue a Trade Notice stating that during the days ofthe closure of bank business due to such strikes (specifying the dates whereverpossible), the assessees can send their cheques by registered post,acknowledgement due (R.P.A.D.) or special messenger, with the TR-6 challans (inquadruplicate) 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 thecheque, to the concerned Range Officer also.

(ii) On the strength of a cheque so sent, they may take credit in theP.L.As.

(iii) On receipt of the cheque in his office, the Chief Accounts Officer willimmediately intimate the concerned Range Officer about the nameof the assessee, the number and date of the cheque and its amount.

(iv) Immediately after the strike is over, all such cheques should bedeposited by the Chief Accounts Officer into the Focal PointBank/State Bank of India at the Headquarters or Reserve Bank ofIndia, 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 ofthe receipted challans to the assessees and the quadruplicate copyto the R.Os. concerned to enable them to exercise necessary checksand prepare the monthly statement of revenue.

(vi) Bank commission or collection charges, if any, chargeable by thebanks should be debited in the P.L.A of the assessees by the ChiefAccounts Officer under intimation to them as also the R.Os.

(vii) If any of the cheques sent by the assessees are dishonoured, theCommissioners shall take appropriate penal action as prescribedunder the rules.

(viii) The Chief Accounts Officer should maintain a suitable record inregard to receipt and disposal of such cheques.

7. Payment by cheque when not permitted

7.1 For removal of doubts and to ensure uniformity of application of theprocedure it is clarified that the payment of duty/other dues through chequesshould not be permitted in the following cases: -

(i) If there is a strike in or closures of only one nominated bank of theCommissionerate and the assessee still remains in a position to depositmoney in the other nominated banks or Departmental Treasury (whereverthey exist) – unless the assessees’ bank is the only nominated bank in theCommissionerate.

(ii) In the case of declared Bank holidays because such holidays are knownwell in advance.

(iii) Where the Public has been given advance intimation of a strike, unless thestrike is unduly prolonged (say over 3-4 days).

(iv) Where Bank employees adopt “go-slow” tactics.

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