Manner of Payment of Duty and Procedures relating thereto Credit and Debit in Account Current, Payment of Rents, Fines or Penalties.

Manner of payment of duty
Account current and procedures relating thereto
Credit and debit in account current
Payment of rents, fines or penalties
Account Code Directory
Procedure for deposit of Central Excise duties during bank strikes, natural calamities etc.,
Payment by cheque when not permitted

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 fortnight of a month can be discharged within five days of the close of that fortnight, except that in the last fortnight of the month of March, the duty has to be discharged by the last day of the 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.
   
   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 without payment of duty for storage outside the factory. However, considering that there may be genuine difficulties for sugar industry i.e. sugar has season production , but its off take is through out the year, and that large quantity of the off take (sale) sugar is controlled by government [levy sugar], the manufacturer may not be in a position to clear the goods on payment of duty. Storage of such huge quantities within the factory will be burdensome. Accordingly, it has been decided to allow storage of non-duty paid sugar outside the factory, under such bond and securities/sureties and such conditions and limitations as the Commissioner may specify for a manufacturer on case to case basis.
   
   1.4 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, 2001.
   
   1.5 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 In order to open a new Personal Ledger Account, the manufacturer, quoting his registration number, shall obtain the New Excise Control Code Number (New ECC Number), which is a Permanent Account Number (PAN)-based number. Once Department adopts ‘common number’ for registration and accounts, separate ECC number shall not be required.
   
   2.2 The manufacturer working under the procedure shall maintain an account current (Personal Ledger Account) in the Form specified in Annexure-8.
   
   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 PLA must be prepared in triplicate by writing with indelible pencil and using double-sided carbon - original and duplicate copies of the PLA 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.
   
3. Credit and debit in account current
   
   3.1 The assessee may make credit in the PLA 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., 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 ECC 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 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 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 bank and the same is honoured or pays in cash/drafts and the bank gives receipt stamp on TR-6 Challans, the same shall be treated as ‘credited to the account of the Central Government’.
   
   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 fortnightly/monthly payment system, there should be enough credit at the time of payment of duty for the fortnight.
   
   3.5 Where an assessee is required/chooses to pay duty consignment wise (for the reasons of defaults earlier):
   
   1.  Duty on each clearance should be paid by the assessee by making debit entry in the PLA prior to the removal of the goods outside the factory premises or for being taken into use inside the factory premises. If any goods are removed from the factory without such debit entry they will be treated as non-duty paid.
   2. Duty on clearances of any excisable goods as samples in such small quantities as the Commissioner may approve in respect of any commodity may be paid on the last working day of the month by a single debit in the account current.
      
      
   3.6 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.B.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.
   1. They should be advised to send a copy of the letter forwarding the cheque, to the concerned Range Officer also.
   2. On the strength of a cheque so sent, they may take credit in the P.L.As.
   3. 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.
   4. 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.
   5. 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.
   6. Bank commission or collection charges, if any, chargeable by the banks should be debited in the P.L.A of the assessees by the Chief Accounts Officer under intimation to them as also the R.Os.
   7. If any of the cheques sent by the assessees are dishonoured, the Commissioners shall take appropriate penal action as prescribed under the rules.
   8. 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
   
   7.1 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: -
   1. 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.
   2. In the case of declared Bank holidays because such holidays are known well in advance.
   3. Where the Public has been given advance intimation of a strike, unless the strike is unduly prolonged (say over 3-4 days).
   4. Where Bank employees adopt "go-slow" tactics.