2003 (4) TMI 477 - AT - Central Excise

Summary

Issues:
Challenge to penalty imposed on M/s. Daewoo Motors India Ltd by the Commissioner under the impugned Order.

Analysis:

Issue 1: Challenge to Penalty Imposed
- The appeal focused on challenging the penalty imposed on M/s. Daewoo Motors India Ltd by the Commissioner.
- The Appellants did not contest the disallowance of Modvat credit but challenged the penalty, arguing no mala fide intention in availing the credit.
- Rule 173Q(1)(bb) of the Central Excise Rules, 1944 allows for penalty imposition on a manufacturer for incorrectly availing Modvat credit.
- The Supreme Court precedent in Zunjarrao Bhikaji Nagarkar v. Union of India supports penalty imposition for wrongly availing credit.
- The Tribunal found penalty imposition warranted as the Appellants did avail the credit incorrectly.
- However, considering that the Appellants promptly reversed the entire amount upon audit party's notification, the Tribunal deemed a nominal penalty of Rs. 2 lakhs sufficient, reducing the original penalty amount.
- The appeal was partly allowed, with the penalty reduced to Rs. 2 lakhs.

This detailed analysis of the legal judgment from the Appellate Tribunal CEGAT, New Delhi highlights the issues involved, the arguments presented by both parties, the legal provisions applied, and the final decision rendered by the Tribunal regarding the challenge to the penalty imposed on M/s. Daewoo Motors India Ltd.