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2014 (9) TMI 684 - CESTAT MUMBAIDuty of excess clearance of goods beyond SSI exemption - Benefit of MODVAT Credit - benefit of abatement towards sales tax paid on the sale of goods - Computation of duty - Penalty u/s 11AC - Held that:- From the records, the appellant themselves have admitted to a duty liability to ₹ 6,27,728/- in their reply dated 26-3-1999 and a reduced liability of ₹ 5,21,149.25 in their reply dated 24-9-1999. Thus, the appellant have been adopting changing stands in their replies, but the fact remains that the appellant did exceed the exemption limit of ₹ 30 lakhs and did not discharge the excise duty liability. In the absence of any evidence to the contrary led by the appellant, the only conclusion that can be reached is that the duty demands computed by the lower authorities are correct. It is on record that during material period, the appellant was not registered with the department nor were they following any of the statutory procedures prescribed for availing of Modvat Credit. Modvat scheme as it stood at the relevant time envisaged filing of declaration, maintenance of records showing receipt of the goods, consumption of goods for manufacture, filing of returns indicating the amount of duty paid through the credit account and other statutory requirements. When none of these requirements have been complied with by the appellant, we do not understand how he can claim the benefit of Modvat Credit. In view of the above legal and factual position, we are of the considered view that the appellant is not eligible for the benefit of Modvat Credit on the inputs used in the manufacture of pipes which was manufactured and cleared by them clandestinely, without payment of duty. Whether the appellant is liable to penalty under Section 11AC of the Central Excise Act especially when the said provision came into the statute book only with effect from 28-9-1996 - In the show cause notice the proposal is for imposition of penalties under Section 11AC read with Rule 173Q of the Central Excise Rules, 1944. Rule 173Q as stood at the material point of time provided for imposition of penalty up to five times the value of the goods clandestinely removed. However, in the impugned order penalty has been sought to be imposed only equal to the duty sought to be evaded. Since penalty has been imposed within the limits prescribed by the law as it stood at the material point of time, the same cannot be faulted. Therefore, imposition of penalty equal to the duty for the period prior to 28-9-1996 can be clearly sustained under Rule 173Q and for the period on or after 28-9-1996, the same is sustainable under Section 11AC of the Act. - Decided against assessee.
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