HDPE/PP circular Woven Socks

The petitioner is engaged in the manufacture of HDPE/PP circular Woven Socks and articles of plastics falling under Chapter 39 of the Central Excise Tariff Act and is eligible to avail the benefit of CENVAT credit of duty paid on the inputs and capital goods for the period 2000-2001 and the assessee was as par Rule 8 of Central Excise Rules permitted to pay the duty on fortnightly basis. As there was some default on the part of the petitioner to pay duty, the petitioner is by order dated 31-1-2001 passed by the Deputy Commissioner of Central Excise, barred from availing the facility of payment of duty on fortnightly basis and he was directed to pay the duty in Account-Current. According to the petitioner, he is as per Central Excise rules permitted to utilise CENVAT credit for the payment of duty on clearance of the final product and as the petitioner was during the relevant point of time in acute financial problem the demand was complied with from and out of CENVAT credit account and not through personal ledger account. However, the petitioner was issued with show cause notice under Rule 8 of Central Excise Rules thereby treating the payment of duty out of CENVAT credit account as in contravention of Central Excise duty rules and treating the petitioner as defaulter in payment of duty and the petitioner was demanded to pay duty of Rs. 13,74,365/- paid through CENVAT credit account.